On September 22nd, 2022, senior decision-makers from private equity, financial institutions, advisory firms and holding companies gathered at the CMS headquarters in Amsterdam to discuss industry trends and exchange opinions. 

The panel was moderated by Mark Ziekman – Partner, Corporate/M&A, CMS and Poul Pedersen – Executive Chairman of Pedersen & Partners. Lively debate insights were provided by the panel members: 

• Joost Heeremans – Partner, Rivean Capital
• Erwin de Jong – Partner, Dutch Mezzanine Fund
• Peter van Leersum – Partner, H2 Equity Partners
• Jeroen Lenssen – Senior Director, Riverside
• Taco Rietveld – Partner, RB Family Capital
• Yvonne Rooijakkers – Head of Fund & Co-investments, Rabo Investments

Pedersen & Partners summarised the key takeaways from the debate as follows:

• The Benelux M&A market has slowed down in the last quarter.
• The deal environment is difficult due to multiple external factors including inflation, supply chain issues, the war in Ukraine, and a talent shortage which impact both portfolio firms and new investment activities.
• Valuations are going down, and deals are not being concluded at the usual speed.
• There is lot of dry powder left from earlier fundraising, so markets will improve in the future.
• Banks have become reluctant to provide leverage. This is an opportunity for debt funds.
• Exit is getting more difficult, but US-based buyers seem to be interested in buying European firms supported by the strong dollar.
• It has become harder for technology firms and technology-focused funds to raise money in recent months, and valuations have come down significantly. 
• Portfolio management continues to grow more professional, including well-structured plans for ESG, internationalisation, etc.
• The Benelux PE market is crowded, with lots of funds operating in a small market. A certain amount of consolidation can be expected, as new fund managers find it hard to raise money right now.
   

On May 17th, 2022, approximately 100 senior decision-makers from private equity, financial institutions, advisory firms and holding companies gathered at the CMS Reich-Rohrwig Hainz headquarters in Vienna to discuss industry trends and exchange opinions.

The event had been postponed twice due to COVID-19, so participation was enthusiastic and energised.

The panels were moderated by Alexander Rakosi, Partner, CMS Reich-Rohrwig Hainz and Poul Pedersen, Executive Chairman of Pedersen & Partners. Lively debate insights were provided by the panel members:

• Markus Lang – Partner, Speedinvest
• Pekka Mäki – Managing Partner, 3TS Capital Partners
• Farsin Yadegardjam – Partner, Co-Investor/EVP Capital
• Philipp Freyschlag – Director, Bregal Unternehmerkapital
• Gernot Hofer – Board Member, Invest AG;
• Karl Lankmayr – Managing Director, AG Capital
• Niklas Pichler – Managing Partner, BlackPeak Capital
• Klaus Vukovich – Managing Partner, Alantra Austria & CEE

Katharina Kaiser, Client Partner & Country Manager for Austria at Pedersen & Partners summarised the key takeaways from the debate as follows:

• While there is potential for further growth, the last 12 months have seen very positive developments for Austrian private equity funds. New funds have been raised, and large deals have been completed by local PE players.
• The M&A and private equity market has been active in 2021 and Q1 2022, but most experts now forecast a slowdown.
• It has become harder for technology firms and technology-focused funds to raise money in recent months, and valuations have come down significantly. However, well-funded portfolio firms can take advantage via add-on acquisitions.
• Fund managers and portfolio firms are skilled at adapting to external events, such as the war in Ukraine, supply chain issues, inflation, and interest rates. For example, there is a preference for investing in firms that have the bargaining power to increase prices.
• Portfolio management continues to grow more professional, including well-structured plans for securing the best leadership team, ESG, digitalisation, internationalisation, etc.

On May 3rd, 2022, senior decision makers from private equity, financial institutions, advisory firms and holding companies gathered at the Hotel Principe di Savoia in Milan to discuss industry trends and exchange opinions.

The keynote address was given by Anna Gervasoni, Chief Executive, AIFI (Italian Private Equity, Venture Capital and Private Debt Association). Ms. Gervasoni described the current PE sector in detail, with incoming funds from foreign and domestic LPs, and from newcomers such as pension funds, insurance companies, family offices, wealth management, and retail banks.

The panel was moderated by Paolo Scarduelli CMS Partners and introduced by Duncan Weston, CMS Executive Partner and Poul Pedersen, Executive Chairman of Pedersen & Partners. Contributors included:

• Arabella Caporello – Partner, L Catterton Europe
• Gianpaolo Di Dio – Chief Investment Officer, Senior Partner, Fondo Italiano d’Investimento
• Raffaele Legnani – Managing Director, H.I.G. European Capital Partners
• Guido Lorenzi – Partner, QuattroR
• Marco Samaja – Managing Director, Lazard
• Constantin Terzago – Managing Director, Mutares
• Massimo Trentino – Partner, CMS.

Bruno Pastore, Client Partner & Country Manager for Italy at Pedersen & Partners summarised the key takeaways from the lively debate as follows:

• The M&A market registered record numbers in 2021, although 2022 and beyond could see a slowdown with less IPO and more PE-secondary.
• Small is no longer beautiful. “Buy & Build” is now the way to create value, and to improve the image of PE in the eyes of entrepreneurs – as partners rather than vulture funds.
• A new Private Equity way forward is to invest in companies with financial stress and high debts, as a sort of de-leverage MBO.
• Holding companies are investing in distressed companies and creating value through "ad-hoc" interventions.
• The paramount importance of the human factor and the need for correct management assessment – where possible, this should happen before the investment, not after it.
• New normative requirements will influence due diligence and target company management.
• A more institutional approach is needed for “Buy & Build” value creation and compliance to ESG.

Despite many uncertain external factors such as the war in Ukraine, CV19, supply chain issues, inflation and a recent slowdown in deals, the entire panel had an optimistic outlook for 2022 and beyond.

At the beginning of March 2021, the Pedersen & Partners Private Equity Practice Team and the Healthcare & Life Sciences Practice Team had the pleasure of jointly welcoming Andrew Thompson, a Silicon Valley entrepreneurial leader who has been a frequent presenter for the World Economic Forum.

Recognised as a thought leader in Healthcare and Technology, Mr. Thompson has raised over $750 million in private, public and corporate capital over the course of his career in his capacity of Founder and Chief Executive.

The team enjoyed a lively and inspiring discussion, and discussed several topics at length, including Mr. Thompson’s insights on bridging the potential of technology with the practice of healthcare.

We share a summary of the findings below, while expressing our sincere gratitude to Mr. Thompson for his valuable insights.

The healthcare challenge

At least half of the world’s population do not have access to basic healthcare. Every year, about 100 million people are pushed into extreme poverty due to out-of-pocket health expenses. Population growth, an increasing number of patients with chronic diseases, and the need to provide new, innovative and affordable treatments are just a few hurdles countries must overcome. Achieving global access to healthcare will require a fundamental shift in the way resources are allocated.

Technology drives a fundamental change

More technologists are working today than they have been over the rest of history combined, so change is happening fast. If you want to know what is going to fundamentally shift the allocation of resources over the next 10 years, it’s a good idea to look back at the last 100 years. The mobile internet and associated digital technologies are a transformative shift; these technologies are remaking all our lives socially, politically, economically, and militarily. They are an opportunity to create a fundamental shift in the way resources are allocated.

The tech industry has created a fundamental shift in the way computing resources are allocated. There are three keys to making this happen:

• Consumerise – a cell phone, not a workstation; more computing power is now owned by consumers than by governments and corporations combined
• Systematise – tech ecosystem that enables a seamless experience; all the complexity is dealt with by producers, not by consumers
• Globalise – sell to everyone, not just rich people in rich countries; most people who own a mobile device make less than $10 a day

Changing the healthcare business model to serve customers Different approaches: US, Europe and Emerging Economies

The key to a fundamental shift in healthcare is what happens in the USA – the most advanced and expensive system, serving as a benchmark for the rest of the world. We don’t have a healthcare system. We have a sick care system. The system was designed in the last century to deal with the major problems of the time: acute disease and trauma. It does the job for which it was designed quite well, and it uses the best technology of the 20th century. It is driven by revenue: producers, payers, providers, and politicians all like healthcare inflation. The only people who would like healthcare to cost less are patients, but they are not part of the healthcare business model in the USA.

Covid may accelerate the creation of a healthcare system that makes use of the best technologies we have today. The potential of a building where you plug in to electricity can be magnified by the power of a mobile device where you log on to the internet. The capacity and expertise of people with knowledge in their heads is potentially massively extended by software and servers with intelligence in the cloud. Products designed to be safe in everybody and work in somebody could become services – tailored to you, your genes and your lifestyle, delivered where you live, work, and play, in ways that you see, measure and understand, at a price you can afford to pay.

European healthcare is also a sick care system, largely government-funded, where the key economic drivers are cost saving and budget compliance. The challenge is again incumbency and creating a change in purpose (from sick care to healthcare) in scaled human systems that is very hard to achieve.

Then there are emerging markets – will people in China see things differently? Potentially, but only if they don’t use business models that are based on the tools of the last century. The problem with healthcare and how it works in many emerging markets (India for instance) is that they try to replicate the US healthcare system in many ways, and thus create another magnificent dinosaur-style system that no one can afford. The opportunity for India is to leapfrog into a very different healthcare market that is consumer-driven, based on mobile phones, and addresses the basic and most obvious healthcare needs. The opportunity is not so much about China versus America or India, but about a generation of young, smart people who see the discontinuity, and who see new business models that can fundamentally change the way in which large industries work. Alongside that, governments can contribute through smart regulatory policy that makes it possible for these new companies to succeed.

Adding value as a VC

It is important to figure out what questions you are going to ask and in what order: Does this make a difference for a patient? Will this make money? Adding value as a VC is backing technology that makes a difference for patients, and then working to ensure there is a business model that will make money. It is not backing technology that will make money, and then working to ensure it makes a difference for patients.

Raising Money

Raising money for an early-stage company requires a strong narrative – a story. VCs are some of the most patient, open-minded and least opinionated people you will ever meet. With that in mind, I always encourage folks to realise they have 30 seconds to get them engaged. A great healthcare pitch is:

• This is what I’ve got: a unique technology, a great team, a massive market opportunity, and a fast path into the market
• This is why it’s important: it meets a major clinical need and we have figured out how to align economic incentives for patient, provider, and payer
• This is why you should invest now: we are executing rapidly and we will hit these value driving milestones soon.

Guest Speaker:

Andrew Thompson,

Managing Director and Co-Founder, Spring Ridge Ventures

Moderator:

Alvaro Arias,

Partner, Global Head of Private Equity Practice Group

Guest speaker introduction:

Lydia van der Meulen,

Client Partner, Global Head of Life Sciences & Healthcare Practice Group

Guest speaker introduction:

Beryl Chu,

Client Partner, Private Equity Practice Group

Riga, Latvia – Evita Lune, Partner for Global Digital Economy at Pedersen & Partners interviewed Marili Merendi, Associate at Karma Ventures.

"We believe that one can only scale by hiring great people that bring true value and know-how on scaling and making a company stronger and better.”

 

Evita Lune is a Partner who drives the firm’s Global Digital Economy. She has completed over 50 senior level assignments in 29 countries within this practice, out of her total portfolio of over 600 assignments. Ms. Lune works extensively with FinTech clients from the Baltic sea region (Scandinavia, Baltics, Poland) and supports their global expansion plans in all continents by providing effective executive search solutions. As a team leader and regional director, she manages Pedersen & Partners teams in Poland, Baltics and Belarus. Her previous experience includes three years with the Stockholm School of Economics in Riga as the Executive MBA Program Director and six years with Shell in international and regional marketing management functions in Riga, Budapest, and Brussels.

Ms. Lune was a speaker at the CEE FutureTech congress in Warsaw - one of the most important business summits in Central and Eastern Europe and participated in Blockchain Pre-Accelerator Program at University of Latvia. She is also a blogger for RigaTechGirls, a Jury Member of CEE Capital Markets and FinTech Awards and a Contributing Advisor at the Digital Freedom Festival. Ms. Lune was recognized by Forbes as one of the top 25 most influential women in Latvia for two years in a row.

If you would like to conduct an interview with a representative of Pedersen & Partners, or have other media-related requests, please contact: Anastasia Alpaticova, Marketing and Communications Manager at: anastasia.alpaticova@pedersenandpartners.com

If you would like to conduct an interview with a representative of Pedersen & Partners, or have other media-related requests, please contact: Anastasia Alpaticova, Marketing and Communications Manager at: anastasia.alpaticova@pedersenandpartners.com

Private Equity Practice Group