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INVESTMENT PHILOSOPHY

VALUE CREATION

  • We focus on companies where our capital either resolves bottlenecks to unlock potential or creates the means for capital expansion. We have a growth orientation and seek to implement corporate transformation by active management and a focus on good corporate governance and partnership

SME FOCUS

  • We target primarily SMEs in export focused growth industries or domestic champions. We focus on helping businesses institutionalize their procedures and operations in preparation for the next phase of the corporate lifecycle by understanding the challenges they encounter throughout their growth and development

FLEXIBLE AND CREATIVE STRUCTURING

  • We adopt a creative and flexible approach to structuring our investments, recognizing the unique challenges posed by SMEs and private ownership. We have a creative and bespoke structuring approach to each opportunity to ensure that access to capital is not an impediment to the growth of the business. Each investment we make is tailored to the facts and circumstances of the transaction in order to maximize operational flexibility

HANDS-ON BUT CONCENSUAL APPROACH

  • We have a hands-on and operationally focused investment approach targeted at strengthening management, operational improvements, and the improvement in the environmental and social practices of investee companies. We develop strong relationships with our stakeholders and believe that it is important to align the interests of all parties to secure the optimum outcome for everyone

STRONG EMPHASIS ON CORPORATE GOVERNANCE AND SOCIAL, ENVIRONMENTAL AND ECONOMIC DEVELOPMENT

  • We are experienced in helping businesses institutionalize their procedures and operations in preparation for the next phase of the corporate lifecycle. We believe that good social and environmental development practices are critical to the growth and development of our portfolio companies and we work with our companies to implement the appropriate actions and changes where required. We believe that growth at the corporate level results in employment growth which in turn results in wealth creation and improvements in local communities

DISCIPLINED APPROACH TO EXITS

  • Our investments are structured in order to align all parties to our exit within a defined period of time, agreed at the time of investment. This is achieved through incentives built into our structures that encourage our partners to work with us for the shared target. Since 2005, the CEECAT team has overseen 18 full and partial exits from investments in the CEECAT Region generating EUR412mm exit proceeds 

CO-INVEST OPPORTUNITIES FOR LPs

  • We generate co-investment opportunities for LPs or other strategic partners in order to meet the financial and strategic goals of investee companies. To date, we have realized co-investments of over EUR247mm
 
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INVESTMENT VALUE ADD

REVENUE

  • We dedicate regional/global industry experts towards accelerated revenue growth strategies, including new markets, customer or contract acquisitions, geographic and vertical expansion, new product and service offerings, pricing strategies, customer analytics, and sales force build-outs

STRATEGIC ACQUISITIONS

  • We build an M&A capability to source, execute and integrate strategically significant acquisitions to consolidate or grow market share

RESOLVING SHAREHOLDER / OWNERSHIP TRANSITION ISSUES

  • We understand that an owner’s business represents the most important financial, emotional, and professional investment she or he has made, and the decision to sell is one of the most important decisions an owner will make for his or her family. We recognize that the need to grow often conflicts with the capital structure of smaller companies and therefore the resolution of this conflict is critical to unlock potential. We have worked with owners to resolve these conflicts in different ways such that the correct balance is found between these often conflicting goals

CAPITAL FOR GROWTH

  • We identify companies with significant potential but impaired access to liquidity where capital expenditure can unlock growth by unlocking dormant capacity or unblocking operational bottlenecks

WORKING CAPITAL SUPPORT

  • Degraded capacity utilization due to limited access to working capital is one of the biggest issues facing SMEs. We always combine our investments with a focus on working capital requirements to complement the impact of new investment. This is one of the most overlooked areas in the investment cycle

BALANCE SHEET RESTRUCTURING

  • We focus on the capital structure of each company looking to match its asset/liability profile and reduce the potential risks from short term financial crises within the industry or country. We actively seek access to debt markets to optimize the capital structure and lower the cost of financing for each company we invest in. The CEECAT team has sourced and/or restructured €288mm of senior debt for its portfolio companies  

COST AND OPERATIONAL IMPROVEMENT

  • We identify upfront opportunities for operational improvement, including supply chain optimization, lean initiatives, technology efficiency, and establishing new distribution channels. We work with management to implement or augment KPI monitoring and bolster financial systems and controls. Margin improvement is always a key KPI and this is implemented throughout each of our investments

TALENT AND HUMAN CAPITAL

  • We introduce new relationships that can accelerate the achievement of strategic goals, including the recruitment of senior executives, board members, industry advisers, and specialist service providers. In addition, we help management develop corporate governance best practices and design compensation programs that align employees with strategic goals
 
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OUR APPROACH

COMPANY CHARACTERISTICS

  • EBITDA of EUR2.0 million and above
  • Stable and growing market demand
  • Diversified customers, markets and suppliers
  • Sustainable free cash flow
  • Proven management team

INVESTMENT STRUCTURE

  • Preferred and common equity
  • Credit

INVESTMENT AMOUNTS

  • Equity: EUR10mm to EUR30mm
  • Credit: EUR7mm to EUR20mm
  • Able to accommodate larger investments through co-investments from Limited Partners and strategic partners

INVESTMENT HORIZON

  • 4 to 8 years

GEOGRAPHY

  • CEE / SEE and Turkey
  • Kazakhstan / Central Asia

INDUSTRY FOCUS

  • Manufacturing
  • Food Processing
  • Consumer Goods
  • Business Services
  • Energy / Infrastructure
  • Telecommunications, Media and Technology
  • Transport and Logistics
  • Healthcare

 

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IMPACT

CONTROL AND ACTIVE PARTICIPATION TO DRIVE CHANGE

  • Improvement in corporate governance

  • Strong focus on control via affirmative and negative rights

JOB CREATION

  • Access to capital generate growth, increased employment and improves social standards for labor

  • CEECAT Capital’s involvement attracts fresh talent to SMEs

INCREASED COMPETITIVENESS

  • Improved capital structure leads to better working capital and reduced costs

  • Third-party advisors help improve strategy and operational excellence

  • Focus on improving management reporting, KPI tracking and increased efficiencies

ESG & IMPACT

  • CEECAT Capital is committed to striving towards the “International Finance Corporation’s Performance Standards on Social and Environmental Sustainability”

  • CEECAT Capital has a disciplined approach in identification of risks during ESG screening at early stages of investment and further evaluate and scope of risks during detailed due diligence. Together with the investment, CEECAT Capital looks to build capacity at the Company level for controls and mitigation of certain potential risks as well as the improvement in company's ESG policies and practices

  • We believe all these practices will benefit the local community, as well as ultimately improving business efficiency and performance so that we can achieve our ultimate goal of attaining the maximum returns for our investors. CEECAT Capital’s ESG Policy is aligned with the UN’s Sustainable Development Goals, conform to the IFC, EBRD, EIB/EIF Exclusion List, meet local and international laws and respective practices and In compliance with local environmental, labor, health, safety and business laws

  • CEECAT Capital is a signatory to the Principles of Responsible Investment (PRI)

    As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios. We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we are implementing the following Principles:

    i) We will incorporate ESG issues into investment analysis and decision-making processes.

    ii) We will be active owners and incorporate ESG issues into our ownership policies and practices

    iii) We will seek appropriate disclosure on ESG issues by the entities in which we invest

    iv) We will promote acceptance and implementation of the Principles within the investment industry

    v) We will work together to enhance our effectiveness in implementing the Principles

    vi) We will each report on our activities and progress towards implementing the Principles