Wealth & Finance International - Fund Awards 2016

Fund Awards 2016 26 Most Innovative German Private Equity Firm 2016 & Private Equity Deal of the Year: Best in Class for Proprietary Deal Sourcing Brockhaus Private Equity is an independent private equity firm specializing in buy-outs and expansion/replacement financings, with a focus on the German-speaking regions. Founder and Managing Director Marco Brockhaus talks us through how the firm differentiates itself in the competitive financial industry. Company: Brockhaus Private Equity GmbH Website: http://brockhaus-pe.com As the current ultra-low interest rate environment shows no sign of abat- ing, investors are increasingly seeing the need to widen their approach and look beyond standard assets if they want their portfolios to perform. Against this background, attention has shifted to Germany’s Mittelstand, the world-beating small and medium-sized manufacturing firms that form the backbone of the German economy. These companies have shown themselves to be exceptionally robust and resilient in the face of turmoil in the global economy, and it is largely due to their strength that Germany continues to be more competitive than most other countries in the EU. Significantly, out of a worldwide total of some 3,000 companies recog- nized as global leaders in their respective industries, around half are German Mittelstand firms. Mostly family-owned and often little-known abroad, these companies are fuelled by a distinctive business culture based on perpetual innovation, long-term strategic thinking and respon- sible management. Harnessing the Mittelstand’s powerful dynamism through buy-outs, however, requires special capabilities and skills. Brockhaus Private Equity meets this challenge through its strength in proprietary deal sourcing. The firm has been a key player in Germany’s small- and mid-cap buy- out market for more than 15 years. Brockhaus manages and advises funds with more than € 285 million in total of capital raised and makes equity and equity-related growth capital investments in the range of € 5 million to € 25 million per transaction. In our daily business, we benefit from our independence as well as our solid investor base which includes, among others, pension funds, savings banks, insurance companies, family offices and a public separate estate managed by the German Federal Ministry of Economic Affairs and Energy. A highly attractive annual return rate in line with top PE industry benchmarks highlights our history of achievements, now in its third chapter since last year’s closing of the most recent fund, Brockhaus Private Equity III. LA16030 All our investments are clearly focused on medium-sized innovation and technology leaders. Representing an elite group within the Mittelstand, these companies are characterized by highly innovative products and cutting-edge technologies that often set global standards, enabling them to achieve significant double-digit growth rates and EBITDA margins. Typically, they enjoy leading market positions in Germany and have embarked on successful expansion abroad, but still have some way to go before they can reach their full potential. For investors, gaining access to these “hidden champions”, frequently tucked away in small towns far removed from Frankfurt, Munich or Berlin, is no easy task. Identifying and reaching out to those firms is at the core of our business. Our institutionalized sourcing process - incor- porating many different channels of information, including a close-knit network of cross-industry contacts - provides us with the best and most comprehensive Mittelstand insight available, enabling us to spot Germany’s most promising small and mid-cap firms at an early stage. As a result, we benefit from a steady stream of first-class investment opportunities provided by wholly proprietary deal situations. Bypassing middlemen and M&A advisors helps us maintain pricing discipline and protects us from unreasonable valuations. Successful investments in Wirecard and 360 Treasury Systems are perfect examples of what our proprietary deal sourcing technique can achieve. Following the same pattern is our most recent MBO, IHSE GmbH, a global leader in high-performance KVM (keyboard, video and mouse) technology suitable for a wide area of applications, ranging from broad- casting, air traffic control and control rooms to manufacturing, medicine and government. IHSE is a typical Brockhaus Private Equity portfolio firm: With its cutting-edge products for secure data connections be- tween IT consoles and computer servers, the company is well posi- tioned in a highly attractive and extremely dynamic niche market with minimal competition. Access to the resources provided by Brockhaus