Our investment strategy*
Seafort’s strategy is to support and enhance the core drivers of the individual business plans. We developed a strategy that incorporates multiple value drivers thus ensuring that upside can be achieved through several different measures for each portfolio company and without solely relying on market growth.
The invested companies operate in unrelated industries with uncorrelated dynamics. In summary, they form a well-balanced buy-out portfolio of established businesses.
Seafort has a differentiated, balanced strategy which is designed to deliver reliable growth with a low risk of capital loss whilst providing constant liquidity to investors. Substantial strategic interest makes the companies attractive for larger corporations trying to grow in the respective areas or to get a footprint in the D- A- CH market.
Seafort approach*
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Supportive investors with entrepreneurial spirit
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Distinctive investment management approach
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Conservative investment approach
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Focus on key value drivers
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Seafort is familiar with the mindset of German entrepreneurs, ranging from dynamic serial entrepreneurs to experienced “Mittelstand” managers
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Characterized by a relatively conservative, or low-beta, effort to seize opportunities in core industries with the aim to add substantial value to the portfolio
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Returns based on investing in a portfolio of companies with good growth and cash flow prospects, and backing motivated and experienced management teams, but not through the extensive use of debt
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Significant effort working closely with the portfolio companies to facilitate implementation of effective operational controls - add value to the fund’s investments
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Post-investment value build*
Seafort believes that the portfolio companies will benefit from following post investment action:
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Entrepreneurial partnering
Seafort believes in the importance to focus on the selection of top-quality entrepreneurs and management teams. Seafort’s involvement is an integral part of the investment strategy, supporting the portfolio company in its overall business development. It also enables Seafort to anticipate and resolve arising issues early and quickly. Seafort will usually require management to keep a significant financial stake in their company in order to ensure that interests are aligned.
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Continuous strategic review
Seafort creates monthly or quarterly reports including financial statements and strategic reviews of all portfolio companies in order to monitor progress and provide on-going support. These strategic reviews allow us to monitor progress at an appropriate rate.
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Focus towards exit
Seafort analyzes each portfolio company on a frequent basis to determine the appropriate exit timing and method. The exit strategy may, in most cases, take the form of a sale to a strategic or financial buyer. Exits will be sought when there has been a significant increase in value in companies through revenue growth, margin expansion and increase in profitability.
Exit management*
Seafort team members have executed in total more than 20 exits in the past years and know how to increase the appetite of potential buyers and how to manage a 1-on-1 sale or a complex auction with several parties involved. The challenge is to find the right strategic fit which will help the company in the future and to gain the support of our management teams to operate under a new owner. Only if all stakeholder views have been anticipated and are taken into consideration a successful sale will be executed. We constantly sound the market for buyers’ appetite and build up reference data through a broad advisor network.
Investment criteria*
Well-established Sectors
Seafort prefers well-established companies in services/trade/ IT/ engineering, consumer goods, industrial goods and health care/ pharmaceutical products.
Majorities
Competitive advantage
Seafort prefer regional champions and global niche market leaders and companies with highmarket entry barriers for the competitors
Risk avoiding
Seafort avoid companies with single product, strong customer concentration or unsecure legal
Competent management
We invest in experienced manager. To search or change essential members of the management after the acquisition increase the risk to fail.
Growth opportunities
The company needs to have excellent growth opportunities in its market with proof of concept.
Value added
Seafort’s network needs to provide value creation opportunities
Bankable
The company should be in a position to bear a moderate acquisition financing to increase the leverage effect. Growth however should not be constrained.
Strong Cash flow
Growing and constant cash flow are crucial for growth, capex programs and deleveraging.
Exit oriented
At the time of a positive investment decision the company needs to be sellable. Who could potentially buy the business and why will the company be even more attractive after the holding period of Seafort.
