Private Equity

Understanding Private Equity

Private Equity is a type of investment opportunity that involves the purchase, management, and eventual sale of ownership stakes in privately held companies. The private equity process can be broken down as follows:

Fundraising: We raise funding from various sources such as institutional investors (Irish Strategic Investment Fund, pension funds, endowments, etc.) and  high net worth individuals.

Investment Appraisal: We identify potential investment opportunities in various industries and sectors. Typically, we look for companies with growth potential, operational inefficiencies, or other factors that can be improved to increase the company’s value.

Acquisition: Once a suitable investment is identified and approved by the investment committee, Renatus acquires a significant stake in the company and obtain a say in its management decisions and strategy.

Operational Improvement & Value Creation: We work with the management teams of portfolio companies to implement operational changes, improve efficiency, and enhance profitability. This in turn should increase the value of the company over the holding period.

Exit Strategy: Once we believe that value has been maximised (typically following a 5-7 year holding period), we look for ways to exit the investment and realise returns. This often involves selling the company to another investor or a larger competitor.

How Private Equity Creates Value

Private equity firms create value for their partner companies through a combination of strategic, operational, and financial actions.

Operational Improvements: This includes measures such as process streamlining, supply chain optimisation, increased manufacturing productivity, and general productivity improvement may all be part of this.

Cost Rationalisation: This might involve consolidating operations, renegotiating supplier contracts, or implementing more efficient resource allocation.

Strategic Initiatives: This can entail entering new markets, introducing new goods or services, looking into global possibilities, or making acquisitions to bolster and complement the business’s operations.

Management Expertise: Private equity firms can help bring in experienced professionals and industry experts to work alongside the existing management team.

Financial Engineering: They can also help optimize the company’s capital structure by refinancing existing debt, securing more favourable credit terms, or raising additional financing to support growth initiatives.

Sales and Marketing Enhancements: This may entail rebranding, enlarging the distribution network, starting focused marketing initiatives, and enhancing customer relationship management.

Governance and Reporting: This involves establishing better reporting systems, enhancing financial controls, and ensuring compliance with industry regulations.

Renatus specific value-adds:

Renatus is backed by a collective of self-made entrepreneurs who are experts in their respective industries, passionate about business and love to work with and share their experience with our partners.

We have access to a pool of co-investing experts across a diverse range of industries. This pool can be tapped to strengthen the board with individuals that have extensive industry experience and are deeply passionate about the industry.

We have a network of top-class talent across the various functional areas of a business. If a gap exists, this talent can be “plugged in” as a part-time/full-time executive or as a non-executive to boost business performance.

Having spent many years in advisory & operational roles, each of Renatus’ Directors brings with them a unique blend of strategic, commercial and operational expertise to our partner companies that significantly enhance strategy formulation and decision-making.

We act as an in-house corporate finance & consulting team for our partners, providing thorough market research, strategy review & assisting in its formulation as well as evaluating and executing potential bolt-on acquisitions and negotiating with banks.

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