Olympia Capital
General Approach When evaluating private equity opportunities, we look for the following criteria:
- Industrial Expertise: We need to have a thorough understanding and experience in a particular industry, either in-house or through a co-investor, in order to be ready to deploy capital on a given asset
- Solid Industry Fundamentals: Not every industry in which we happened to have gained knowledge over the years is a candidate for investment. We focus only on segments which are healthy, growing and have a sustainable future. In turn, the companies, which we analyze in such industries, must be well placed to benefit from such fundamentals, either now or in the foreseeable future
- Uniqueness of Deal/Asset: The proposed transaction or investment opportunity must have an attractive risk/return profile and have a non-market element to it, providing us with an edge over the competition or the general market
- Meaningful Involvement: Opportunity to invest our partners’ own capital and to bring on additional co-investors, if necessary, in order to obtain both a significant equity stake in the business, as well as a meaningful role in its future operations and development
- Strong Management: Although we take a very active role in overseeing our portfolio companies, they must have strong and independent management teams, who are able to carry out our usually ambitious growth and development plans
- Liquidity: There needs to be a clear path to liquidity either through a strong and recurring dividend stream or through an ability to exit via a sale/IPO
Sourcing & Execution In the search for attractive investment opportunities, we add significant value through the following steps:
- Sourcing: Leveraging of strong relationships within various industrial, financial and political spheres of interest to source and identify unique, non-market opportunities
- Analysis: Thorough and insightful due diligence and modeling work utilizing top industry experts and obtaining valuable political color to provide us with an edge versus the competition
- Structuring: Engaging a mix of Western law and accounting firms, as well as specialized, niche Russian advisors to provide maximum downside protection
- Risk Management: Making sure that the transaction structure and post transaction arrangements insure us against “opportunistic behavior” on the part of management/co-shareholders
- Financing: Identifying proper local banks/lending parties to determine optimal capital structure for the transaction’s SPV or to recapitalize the operating company itself to obtain a better return
- Capital Pools: Resources to pool like-minded co-investors who will bring additional long term value, as well as capital, to the asset
- Oversight: Subsequent implementation of all investment management functions outlined on the following slide
Development of Assets For assets already in our portfolio, we are engaged in the following activities at all stages of the investment’s life cycle:
- Monitoring: Constant interaction with management teams, co-investors, key suppliers and customers, relevant government entities and other stakeholders to protect and grow the value of the asset
- Reporting: Improving corporate governance, transparency, transitioning to IFRS audit, management accountability, preparing the company for strategic due diligence/capital markets transaction
- Business Optimization: Utilizing our wide network of industry contacts to offer strategic value creation opportunities for non-performing/underutilized businesses
- Operations: Improvement of operational efficiency through our expertise and active involvement of our advisors, improving the management team quality and motivation
- Capital Structure: Leveraging our network to improve terms of existing debt facilities, including covenant package renegotiation, bringing a strong and reputable financial partner, if required
- Strategy: Putting in place a concrete strategic growth plan, including possible acquisitions of assets or entering new product/business lines
- Local Expertise: Experience in resolving the principal-agent problem or potential shareholder conflicts, identification of and effective communication with the relevant groups of interest
- Exit Considerations: Close monitoring of market conditions and regular interaction with potentially interested parties for optimal exit conditions and timing