Trials and Tribulations of Founding a Private Equity Business
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Imperial College PE&VC Club event on 19th Feb, 2014
Transcript of Trials and Tribulations of Founding a Private Equity Business
WHEBp
Sustainability focused multi-asset class investment firm covering Private Equity, Listed Equities and
Infrastructure (acquiring renewable energy assets).
Total AuM around €480m of which some €250m (£210m) across three VC/PE funds.
WHEB PE Funds
• Fund 1 (2004 vintage) – “WHEB Ventures”: £24 million; invested in 8 companies and closed for new
deals. Investors are nearly all family offices. Focused on venture stage.
Fund 2 (2008 vintage) – “Green Growth Fund 1”: £105.million; invested in 12 companies to date.
Investors are around 70% family offices and 30% institutions. Focused on growth stage.
Fund 3 (2014 vintage) – “Green Growth Fund 2”: first closing in Feb 2014 at €95m with eventual
target of €200m. Likely investor base 15% family offices, 85% institutions. Focused on growth
stage.
Location
2 offices (London, Munich).
Team Size
20 investment professionals across WHEB Group of which 8 plus 3 special advisors involved in
the PE funds.
The Company
friedola TECH supplies tough, lightweight patented plastic components, for
automotive and logistic applications (used by Daimler, VW, others).
Products made from recycled materials derived at friedolaTECH‘s own
plastic waste recycling facilities.
Investment Thesis
Acquired 90% of the Company’s equity for an extremely low EBITDA
multiple.
Significant growth potential in new market segments, applications and
regions.
Fund 1
– Venture Stage
– 2008 financial crisis and world stopped
– Portfolio took longer to reach breakeven hence needed more money
– Fund too small so had to find co-investors (£25m since 2010)
– Changed business model to low cost licensing
Boom and Bust 4 year fee cycle
– Management fees drop dramatically once 4 year investment period over – from fees committed to being based on what’s left
– Can’t raise new fund until investment period over
– Getting to first close can take at least a year
– Makes planning very difficult
LP squeeze
– Fees under pressure
– GP commitment increases
Carry
– For new PE firm carry hasn’t happened yet!
www.whebgroup.com
CONFIDENTIAL
London Munich
