Graphite Capital, Activa Capital, ECM and MCH have launched a group, called the Private Equity Network, to share expertise and local knowledge to help the international expansion of each other’s portfolio companies.
The four EU-based firms will assist each other with buy-and-build-projects, promote portfolio companies, share expertise and find opportunities for cross-border co-operation, the group said in a statement. They will share sector knowledge, suppliers, local advisors and intermediaries in Europe, North America and emerging markets, they added.
Graphite Capital operates in the UK, Activa Capital is a French buyout firm, ECM is a German firm and MCH is active in Spain.
“None of us has overseas offices, so it made sense to get that help from the firms that are based in the local markets. It’s very much leveraging our firms’ knowledge in their local area and to use it for the benefit of our own portfolio work,” Markus Golser, a senior partner at Graphite Capital, told Private Equity International.
Members of the Private Equity Network will meet up on a regular basis. “It will be interesting to talk about industry sectors as a number of our portfolio companies are overlapping and to make sure that any best practise is really shared across the network.”
As the four firms are not direct competitors, sharing knowledge is not a concern Golser said. “Since they are operating in different markets, there is a genuine willingness and desire to be helpful in that context because we are not competing with any of them”, he added. “If we come across a business that competes directly with another business then we have to be quite careful. But it’s more about parallels in sectors that exists across countries or businesses that operate in the same space but don’t compete with each other,” Golser added.
For now, information sharing will be the key priority, but Gosler does not rule out further co-operation between the firms. “We have to see how it comes. If there are opportunities for [sharing managers in operational teams] I am sure we will look at them. We have to start with the information and move it from there, but I would be very surprised that if genuine opportunities arose we would not pursue them quite vigorously,” he said.
PEN has no membership fees and the costs of any meetings will be paid by the firms themselves. “If there were any initiatives that had a cost to them – shared resources in the Far East for example – we would formalise that if and when it arises,” Golser said.
The network could be expanded within Europe, but also into other continents, Golser said. “We have to make it work for the four of us to begin with, but there are areas where we have no partners in Europe, such as Scandinavia, Italy and Eastern Europe. It’s quite possible that we will look at partnering there if the right firm presented itself.”