Why Permanent Capital is ideal for value creation in the Mittelstand
What is our approach to family businesses that we acquire?
We invite the sellers of family businesses to re-deploy 25-50% of the purchase price into our holding company. In this way, the investor group is permanently expanded with new shareholders from the family business owners who have know-how and contacts that likely have a very positive influence in the development of the portfolio.
What influence do technology and product development have in mid caps?
The German hidden champions have not established themselves globally through short-term sprints, but through sustainable technology and product development. Only with more long-term strategic technology and product development can a new era be opened up. As founders, we implement this “new era approach” with the ARQET investment company.
Is the Permanent Capital a proven instrument?
In the Permament Capital segment, the volume of money invested has increased disproportionately strongly since 2018, including well-known financial investors.
In the mid-market, new investment vehicles with long maturities are emerging, especially with the participation of family offices.
Are there enough mid caps in Germany available for acquisition? And do we have access to hidden champions?
There is no gap in investment opportunities in the mid caps in Germany – our screening this year has revealed 250 plus companies that fit the shortlist.
What does the opportunity and risk profile look like?
ARQET is benefiting disproportionately from the energy transition and decarbonisation in the green tech sector, from the future requirements for digitalisation and automation in the smart technology sector, and from the strong growth in demand in healthcare and nursing in the health care sector.
With regard to the risks, it should be noted that the following factors are putting the German economy under pressure to act: Energy transition, pressure for decarbonisation, supply bottlenecks and fluctuations in demand. Only the best companies will be able to emerge stronger from such crises. Given our Permanent Capital, we are in a very good position to take advantage of such situations and to monetise the market opportunities that arise.
What does the participation structure look like for the investors?
Our investors participate as limited shareholders in ARQET Beteiligungsgesellschaft, based in Munich.