My best investment - Urs Wietlisbach, Manager, Princess Private Equity

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One of our best investments in recent years was the buyout of Bartec, a German-headquartered, leading global provider of explosion protection and safety technology products used by the oil-and-gas, energy and industrial players in hazardous environments. Our investment rationale for Bartec was based on its strong position in a niche market with targeted strong long-term growth of 8-9% p.a. The business had an impressive sales record, having achieved compound annualised sales growth of 13.7% p.a. from 1997 to 2008. Increasing regulation – a trend that showed few signs of slowing - also proved supportive for the investment case. For Bartec’s customers, safety was of paramount importance resulting in inelastic demand for the company’s products, while operating in a highly regulated business environment also created significant barriers to entry for competitors.

Princess, alongside other Partners Group-managed funds, acquired the business in partnership with Capvis in August 2008. During our period of ownership we undertook several strategic initiatives to enhance value, leveraging our global network to help develop new client relationships and identify suitable acquisition targets. Bartec made two bolt-on acquisitions in Britain and Norway, further internationalising the business. We supported the set-up of a new sales organisation in China and strengthened the company’s positioning in the fast growing region of the Middle East. We also assisted with the refinancing of the business, using our industry network to syndicate the mezzanine debt tranche in just four weeks. During our period of ownership, earnings almost doubled. Bartec was sold to another private equity firm in July 2012, generating a healthy return for our investors.

The Bartec deal typifies our approach to direct investing, focusing on market-leading global small/mid cap private companies where we see further potential to grow the business. Typically, this involves international expansion and operational initiatives to enhance value. It’s an approach that has proved very successful in the past, and is still evident in the current Princess portfolio, which contains a number of investments in market-leading, high-growth small/mid cap companies.