December 2018: Renowned magazine reports on VMS-REB 3
Following the successful launch of the funding of VMS-REB 3 Private Equity Fund in the fall of 2018, media attention has continued to rise. Now the well-known magazine Institutional Money reports on the activities and strategies of VMS. “Special situations can be restructuring and consolidation processes, but also financial and personnel bottlenecks, as well as a challenging corporate succession”, explains VMS partner Paul Niederkofler the focus of VMS-REB 3.
Download the Institutional Money article (German only).
December 2018: Special situations private equity with the highest expected returns
Source: NEPC Endowments & Foundations Survey
A survey, published on December 11, 2018 was conducted in November 2018 by NEPC, an American consulting firm serving more than 100 institutional endowments with assets totaling more than $60 billion. According to the survey, US foundations plan to continue investing in private equity. More than half of the 45 respondents said that this asset class will outperform other investments over the next twelve to 24 months.
A number of elite universities recorded double-digit profits in the 2018 financial year, driven by strong returns from private equity and alternative investments. According to respondents, over the next five to ten years it is expected that strategies specializing in special situations will operate in niche markets and have specific regional knowledge for which the highest returns are expected.
November 2018: Special situations create sustainability
VMS-REB 3 is the first restructuring fund in Austria to incorporate the principles of sustainability into its investment guidelines and has already acquired experience and results in its predecessor funds REB 1 and REB 2.
A good example of how sustainable economic activity works in the form of a complex succession situation is the personnel service provider Völker, which is meanwhile represented in six Austrian states. Following the entry of the VMS-REB 2 fund, the internal structures including the company’s processes were reorganized and subsequently trimmed back to sustainable expansion: the number of branches increased from 5 to 15, and the number of employees rose from 600 to approximately 2,000, in parallel, five competitors were taken on the market, partly from bankruptcies.
The result: sales could be increased from €20 million to approximately €75 million will be almost quadrupled. And also the exit has succeeded for the owners: Due to the good development of the French listed personnel service provider Synergie SA, with over €2.3 billion turnover, the number five in Europe, 80% of the peoples shares.
VMS Partner Lukas Euler-Rolle comments: “A regional Austrian provider was catapulted into the European Champions League by the entry of VMS-REB 2”. VMS Partner Paul Niederkofler: “Through the transaction, added value was created for all involved: Investors could generate profits, jobs were created, the tax revenue for the state flows; In short: Sustainability was ensured” and further: “That’s why we decided to explicitly commit ourselves to Sustainability Guidelines in our new fund VMS-REB 3”.
November 2018: Special situations allow decorrelation
More and more professional investors are seeking to increase their private asset allocation as they begin to realize that in the zero interest environment, the traditional benefits of diversification and decorrelation between equity and debt capital investments (stocks and bonds) have been lost. Making a profit from traditional portfolio allocations is thus difficult, in some cases even counterproductive. A diversification of a portfolio not only by private equity, but increasingly also by investment in infrastructure, private debt, commodities, agricultural land, art and other tangible assets are the result. After all, the development of the risk and return contributions of traditional listed asset classes is more difficult for many investors to carry out and, moreover, it is not sustainable enough or profitable.
However, investors can now professionalize their allocations, taking into account their individual investment objectives, by taking advantage of access to the specific advantages of the universe of private equity.
“What makes private equity funds so attractive, especially in the current stock market phase, is that their profits flow, assuming successful management, regardless of the mood on the stock markets.” Thus, the doyen of Austrian financial reporting Franz C. Bauer describes in the new TREND-premium the advantages of investing in private equity capital.
Download the TREND article (German only).
October 2018: Special situations generate performance
In an interview with the Börse Express, VMS managing directors Paul Niederkofler and Lukas Euler-Rolle describe the new fund REB 3, which, like its predecessors (REB 1, REB 2), invests in medium-sized companies in the DACH region who are in a special situation. “Such special situations can be restructuring and consolidation processes, but also financial and personnel bottlenecks as well as an unsolved corporate succession”, explains Paul Niederkofler. In these companies, Value Management (VMS) generally gains a majority share through its REB funds, reorganizes or restructures the companies and keeps them on course for growth. Once a significant increase in value has been achieved, the companies are usually sold to industrial competitors. Niederkofler: “As the only existing private equity fund, we now have a unique position in Austria. We do not count the few existing bank investment companies among our competitors, as they take a different approach.”
So far, this concept has worked very well: the funds REB 1 and REB 2 have doubled the capital invested for investors, which compared to the duration of the fund yields between 11% and 23% p.a. (IRR-Net). “In addition to decades of experience, a key success factor is our clear investment focus”, emphasizes Lukas Euler-Rolle. “We only buy production and service companies that have a significant market position in their market segment. There are either clearly identifiable causes for the decline in profitability or complexity in the ownership or stakeholder structure. With our specific know-how and our experience, we can often cut the Gordian knot in difficult or unbridgeable constellations of those involved. At the same time, we have the necessary capital to settle the special situation. This gives you good conditions at the negotiating table.”
October 2018: Digital Austria – Where does the capital for the technical revolution come from?
From left: VMS-REB 3 Chairman of the Advisory Board Christian Maier, THINK AUSTRIA Chair Antonella Mei-Pochtler, AVCO President Rudlof Kinsky, VMS-REB 3 IR Manager Matthias Scheiblauer (Photo: ©Christian Mikes)
Under this motto, the AVCO Annual Meeting 2018 was held in collaboration with the SENAT DER WIRTSCHAFT. In the second half of the year, Austria took up the presidency of the EU, and the Austrian Venture Capital Organization (AVCO) took the opportunity to focus this year on “Best Practice Europe” and to look beyond Austria’s borders. AVCO makes the central demand for a strong “Austrian private equity fund of funds”, based on the Danish model (Danish Growth Capital I and II) to the central theme of it’s Annual Meeting 2018.
VMS Managing Director Lukas Euler-Rolle presented a success story from the VMS REB 2 fund realized in 2017 with the title “Völker GmbH – Rise of a SME from the regional league to the Champions League”, and named the “Identification and consistent further development of value drivers as a central success factor”.
October 2018: Private equity beats public equity
Source: J.P. Morgan Asset Management
The global stock markets have yielded high returns to investors in recent years. Even better, on average, private equity investments were used. An overview of the “Guide to the Markets” by J.P. Morgan Asset Management shows: Over a five-year period, the MSCI ACWI global stock index is up 11.4% a year. By contrast, the Global Buyout & Growth Equity Index returned 14.3%.
Longer periods offer the same picture: Private equity (+9.0%) beats the global stock markets (+5.2%) for over ten years as well as over 20 years (private equity: +12.6% / stock markets: +6.6%).
September 2018: Permission Financial Market Authority
The Austrian Financial Market Authority (FMA) has granted permission to VMS-REB 3 Beteiligungen GmbH as Alternative Investment Fund Manager (AIFM) pursuant to Section 1 (5) AIFMG and as administrator of qualifying venture capital funds pursuant to Article 14 of Regulation (EU) No 345/2013, as external administrator of VMS-REB 3 EuVECA GmbH & Co KG, a qualifying venture capital fund within the meaning of Regulation (EU) No 345/2013 with its registered office in Vienna.
Download the OTS Press Statement (German only).
August 2018: Small is beautiful 2.0
VMS is convinced that the small and mid-market continues to be the most interesting and attractive private equity segment. This conviction has been confirmed by the recent study conducted in cooperation with Professor Oliver Gottschalg, associate professor at HEC Business School Paris in cooperation with Unigestion SA. The following conclusions can be drawn:
- Small is still beautiful – for private equity an optimally diversified global small-cap portfolio should outperform a more concentrated large-cap portfolio
- An optimally diversified global small-cap portfolio should deliver a similar performance, with less risk, to a comparable regional portfolio
- Historically, an optimally diversified private equity portfolio did not lose money
- Diversification and selection skills reduce volatility
- A diversified global small-cap portfolio can optimize the J-curve
Read further details in the Unigestion study.
July 2018: New Corporate Design
A network of successful entrepreneurs and financially strong personalities, who together invest private finance as equity capital in medium-sized companies – that is the VMS Group today around Paul Niederkofler and Lukas Euler-Rolle. Since 1999, the company has been active in the investment market and to this day has accompanied numerous reorganisations with complex equity transactions and managed the capital of the co-investors in two very successful funds (REB 1, REB 2). “In the future, we want to make a name for ourselves not just in Austria, but in the entire DACH region as a specialist for direct investment in SMEs”, explains Paul Niederkofler, founder and managing director of VMS, the modernization of the corporate identity. The aim is to shape the future growth of the company and to professionalise our communication with investors. “In the market, we see a very strong demand for private equity investment opportunities. The VMS Group as a specialist for restructuring and special situations has been successfully offering solutions for over 20 years and we want to signal that this will continue to be so in the future,” adds Lukas Euler-Rolle, founder and managing director of VMS.
June 2018: VMS supports the initiative of the Federal Minister of Finance in the area of venture capital and private equity
VMS Managing Director Lukas Euler-Rolle, Federal Minister of Finance Hartwig Löger and VMS IR Manager Matthias Scheiblauer (Photo: ©BMF)
At the end of 2017, the European Investment Fund, together with Austria, initiated a new equity investment program, the Central Europe Fund of Funds (CEFoF). “Initiatives like the CEFoF are an important step in the direction of a growth strategy for the private equity market”, explains Löger during the event at the Federal Ministry of Finance. The CEFoF has set itself the goal of increasing the volume of private equity investments in the region, especially in small and medium-sized enterprises and midcaps. The fund has a fund volume of €97 million, with the EIF itself being the strongest investor in CEFoF. “Our goal is to improve the financing conditions for companies. We want to ensure seamless corporate financing at all stages of development. With an investment in the CEFoF, Austria contributes to the promotion of a growing private equity market. The CEFoF supports the deepening of a sustainable, creditworthy and robust financial infrastructure in this sector. The implementation of high investment standards will attract new institutional investors as well as fund managers to this market segment in Central Europe.”
November 2017: Sale Kufner & Ploucquet
The REB II investment companies (“REB 2”) advised by VMS Value Management Services GmbH have sold their 85% shareholding in the technical textile companies Kufner and Ploucquet. The transaction has already been approved by the antitrust authorities. The new, industrial owners want to promote the long-term development of the company through a focused expansion of the technical textiles product group.
September 2017: Sale Völker
The REB II investment companies (“REB 2”) advised by VMS Value Management Services GmbH and the Völker Privatstiftung have sold 80% of the personnel service provider Völker GmbH to a leading European competitor, 20% of the shares remain with the Völker Privatstiftung. The buyer is Spanish Synergy International Employment Solutions SL, a 100% subsidiary of Synergie SE listed in France. The transaction is subject to the approval of the competition authority. With Synergie SE, the company Völker is getting a strong partner from the industry with a European orientation. Martin Völker will remain CEO of the company and will continue the company’s successful strategy.