Yudu - Finance Monthly October 2012

Global Expert Guide German Private Equity and Nick Money-Kyrle - Managing Partner

Steadfast Capital Group Myliusstrasse 47, 60323 Frankfurt am Main, Germany

Tel: +49 173 656 72 65 Email: nmk@fynamore.com Website: www.steadfastcapital.de

Please introduce yourself, your role and your firm.

My career in the German private equity business began in 1994. Until 2001 I held investment and management responsibilities with 3i Deutschland GmbH, GE Capital and BHF-BANK AG. Prior to private equity, I worked eight years for KPMG in Edinburgh and Du

We are currently raising our third fund (Fund III), and have so far raised just under EUR 130m. We aim to continue fundraising until the year-end.

Q ̈ sseldorf, moving to Germany in

1989. In 2001 I founded BHF Private Equity (renamed Steadfast Capital in 2005) and led the management buyout from BHF-BANK AG. In addition to strategy, I am responsible for advising on transaction and management of portfolio investments, as well as fund-raising and investor relations. In addition I am Managing Partner of Fynamore Advisers which advises the Steadfast Capital Funds on investment decisions and I serve as non-executive director of Falk & Ross Group, Dahlback and the Passport Fashion Group. I am a member of the Institute of Chartered Accountants in Scotland and also hold degrees in Finance and Accounting from Leeds Metropolitan University and the Bremen Business College. Funds managed by Steadfast Capital focus on midmarket buyouts in German-speaking Europe and Benelux, and focus on deals in the range of EUR 25m – EUR 150m purchase price.

Our strategy is to invest in high margin businesses, and we aim at least to treble the money we put in over a five to six year period.

Can you tell us about any recent cases/projects you have worked on that were particularly interesting?

I have spent most of the last 18 months or so fundraising. The most interesting project for me during this period was not a straight investment project, but rather the placement of a large investor (Limited Partner) position in Steadfast Capital’s fund. This ‘stapled secondary’ transaction involved raising EUR209m, half of which we used to buy out the old investor and the other half came in the form of commitments to our new fund. In that particular deal, we effectively placed the old investor’s stake among ten different investors. It was a complex transaction with us sitting in the middle between the vendor investor and a large group of investors. Fortunately, it conducted successfully to the satisfaction of all parties.

On the investment side, we have been following several buy and build strategies: for example we did a major add-on acquisition for our bakery business called Dahlback, and acquired a slightly bigger company called Lila Bäcker. With this we increased the size of the business from 130 outlets to 350, making it the fifth largest and one of the most profitable bakeries in Germany.

In another case we acquired Falk & Ross, Europe’s largest distributor of promotional textiles in 2009 and thereafter enlarged the business with an add-on acquisition of BTC, a UK distributor.

As a team, we have completed a few interesting exits recently; we sold Cetelon to the Swiss Berlac Group, making three times the money we invested, as well as selling FEP Fahrzeugelektrik Pirna tothe US Amphenol Group which returned over four times money.

What caught your attention most about them?

In the case of our stapled secondary transaction, we were able to achieve a fast First Close on our new fund. Fundraising is an inherent part of Private Equity; every few years we have to go to the market and approach institutional

investors and

persuade them to make commitments to the Fund.

We generally have a five year period to invest the money that’s been committed. Due to our history of having only been funded initially by one investor (BHF Bank, which became part of ING) and later by predominantly secondary investors; when we were coming to raise our third Fund we needed to widen our investor base. ING Banking was not in a position to support future funds, since many banks are being forced to dispose of their Private Equity arms.