Private Equity � Venture Capital Partnership for Success

							Private Equity – Venture Capital Partnership for Success
BI Bachelor in Entrepreneurship September 26, 2006

Erik Berger
Investment Director CapMan Tech
17 January 2009 1

Schedule
• • • • • Background The PE/VC Earnings Model The PE/VC Investment Model Closing Remarks Q&A

17 January 2009

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Schedule
• • • • • Background The PE/VC Earnings Model The PE/VC Investment Model Closing Remarks Q&A

17 January 2009

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CapMan – the Nordic private equity house
• Full Nordic presence and market coverage
– established in 1989 – offices in Helsinki, Stockholm, Copenhagen and Oslo – listed on Helsinki Stock Exchange since 2001

• Unique listed asset manager
– manages specialised third party private equity, venture capital and real estate funds – dedicated teams in each investment area

• Funds under management approx. €2.3 billion
– in addition assets managed/advised by Access Capital Partners approx. €1.3 billion*

* CapMan owns 35% of affiliated company Access Capital Partners.
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Four investment areas in four Nordic countries
CapMan Private Equity, €1.8 billion
CapMan Buyout • All industries • Middle market equity investments approx. €10-50 million/company • CapMan funds make both equity and mezzanine investments in Nordic buyouts CapMan Technology • Expansion and later stage technology companies • Equity investments approx. €3-15 million/company CapMan Life Science • Medical technology • Equity investments approx. €2-7 million /company

CapMan Real Estate €500 million
• Commercial properties • Investments €5-50 million per real estate

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CapMan’s Vision

Our vision is to be the preferred Nordic private equity partner for investors and entrepreneurs

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CapMan’s values
• Industrial hands-on approach
– We concentrate on enhancing our portfolio companies’ business by taking actively part in developing their operations. We provide more than just financial support. – We believe in integrity and transparency. We are a reliable partner and we respect our stakeholders. – We are committed to reaching our objectives. We are innovative and aim to be the trendsetter for the industry. Employees are our most important resource. – We aim for profitability and rise in share value without forgetting our other values. We strive for profitability through successful investment activities, growth and cost effectiveness. – We take our decisions independently and are not part of any financial group.
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• High ethics • Dedication

• Profitability

• Independency

Schedule
• • • • • Background The PE/VC Earnings Model The PE/VC Investment Model Closing Remarks Q&A

17 January 2009

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Earnings model
Investment objects Portfolio companies Real estates capital + profit = realised gains Management fee and carried interest to CapMan

Private equity investment

CapMan manages

Private equity funds managed by CapMan

Commitments to funds

Investors • approximately 100 Finnish and international investors have invested in CapMan’s private equity funds.

• investors include insurance
companies, pension funds, banks and other institutional investors.

capital + profit - management fees and carried interest for CapMan = returns to investors

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Earnings model
• Fund structure • Committed Capital vs. Called Capital • Management Fee
– 1,5%-2% (PE) 1,75%-3% (VC) VC Typical 2,25%

• Hurdle
– Typical 8%

• Carry Split
– Typical 20/80

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Fund Life Span
• • • • • • Closed End Fund 10 year fund (1+1) Initial Investment Period 5 years Prospecting 0-5 years Development of Investment 3-5 years Divestment (Exit) 3-5 years

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Schedule
• • • • Background The PE/VC Earnings Model The PE/VC Investment Model Q&A

17 January 2009

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CapMan’s Technology Investment Criteria
• Favourable market development
– Market growth – Consolidation opportunity

• Competitive technology
– Proven with real customers

• A scalable business model with strong growth and profitability potential • Clear value drivers • Realistic exit potential • An experienced management team

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Investment Model
• • • • Prospecting Term Sheet Due Diligence Investment Agreement IM (or Share Purchase Agreement SPA) • Shareholders Agreement (SHA) • Companies Act (Aksjeloven/Allmenaksjeloven) • Bylaws (Vedtekter)

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Investment model
Venture Capital = Risk Capital • Typical Terms and Conditions
– Preferred Shares (Latest Money In has the Highest Value) – Anti-Dilution – Liquidation Preference – – – – Pre-Emption Right (Right of First Refusal) Tag Along Drag Along Forced Exit

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Schedule
• • • • • Background The PE/VC Earnings Model The PE/VC Investment Model Closing Remarks Q&A

17 January 2009

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Closing Remarks
• Right Capital for the Right Phase • Management, Management & Management • A Balanced Deal gives Predictability on both the Ownership Side and the Operational Side • You don’t get what you deserve, only what you negotiate!

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Q&A

Thank you!

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