Dear friends of capiton,
The onset of the Covid-19 pandemic across the globe has affected all of us both personally and professionally. While it is still too early to ascertain the full effects of this crisis, it is clear that the repercussions will be significant even if the spread of this virus can be mitigated in the near future.
Our portfolio has shown a resilient performance in recent months and we firmly believe that our positioning as a conservative, long-term investor will continue to serve us well going forward. With one exception (HR Group) our portfolio companies have shown no or only minor deterioration in current trading and order outlook. There have been no Covid-related funding requirements in portfolio firms to date and one company, GPE Group, has increased its forecast significantly given a strong increase in demand.
On a macro-level we are fortunate that the DACH region has enjoyed a balanced budget and low levels of debt over the past years, enabling the government to provide substantial financial support to stabilize the economy. A whole range of measures have been announced and implemented already and we have established an internal task force to identify suitable programs that can be used to support our portfolio companies where necessary and appropriate. Indeed, the application for such a loan guarantee will be critical for our portfolio company HR Group.
On a more personal note, we are also pleased to confirm that we have not had a corona case at capiton so far. We have implemented appropriate measures at the capiton office and at our portfolio companies to ensure that all social distancing guidelines are followed rigorously.
Despite the lockdown capiton remains very much “open for business” and we are currently working, albeit with caution, on a strong pipeline of discretionary transactions, with two potential new deals in exclusivity.
We are proud of what we have achieved in 2019 and 2020: We have already acquired three new companies (GPE, DEC, AlphaPet) for capiton V, realized two add-on acquisitions (Koch IT, Nicolay), one exit (LAP) and one recap (Raith). In 2019 we have also completed the successful and oversubscribed fundraise for the € 235 million capiton Omega fund, a single asset continuation vehicle involving one of capiton’s most promising portfolio companies, KD Pharma.
We are looking ahead with cautious optimism despite the volatile macro-economic environment. The partners of capiton have worked together during the global financial crisis and bring considerable experience in working with portfolio companies in challenging times. As previous crises have shown, attractive investment opportunities will emerge after a crisis. capiton is well positioned – with fresh money – out of a new fund to generate deals, especially in our focus sectors pharma, med-tech, industrial automation, and sustainable consumption, where we have a strong track record and network.
We are looking forward to creating new opportunities and realizing these together with you.
Stay well and healthy.