Earning Growth
Growth is at the heart of what we do. We recognize that growth is the real engine for value
creation.
With the tough economic climate and volatile finance markets presenting real challenges to growth
in the near future, we also believe operational improvement will remain crucial for our
portfolio companies.
Operational Investing
Our approach is hands-on. With over 160 investment professionals based across 17 offices
worldwide, we proactively source investments in our five chosen sectors and then work in close
partnership with our management teams, our operating partners and our functional experts to
drive earnings growth. Our strategies are broad and frequently innovative. We seek revenue
growth through attractive sub-sector selection, market share gains and add-on acquisitions. We
take pricing initiatives where we see products are under priced, improve product mix, and make
operating efficiencies. As we reposition companies for long-term growth, our portfolio companies
build strategic value which materializes through higher exit multiples. Using our operational
expertise, we identify a host of initiatives and then work hard with the management teams to
realize them. Through working capital management, margin improvement and non-core disposals we
strive to generate cash flows and to achieve a better multiple at exit.
Creative Expertise
We believe the key to our success is our entrepreneurial and collaborative culture. We encourage
our global deal teams to be creative and energetic in exploring their markets within the
supportive framework of our coordinated organization. Through this process, we identify
attractive sub-sectors which provide outperformance potential, often due to structural changes
in the industry, and then actively source multiple investment opportunities. In value retailing,
for example, we achieved this with the acquisitions of Poundland (UK), Takko (Germany), Dollar
Express (US) and Five Below (US).
Understanding that each of our portfolio companies requires different strategies and approaches
to investment, we deploy the expert resources of our portfolio support team and operating
partners as and when they are needed. With Takko, our strategy was to drive sales by opening 150
new stores each year; with Sophis we grew revenues through increased customer focus and the
introduction of key account management in broader geographies in North America and Asia.
Our portfolio companies’ activities are also early indicators of market and consumer trends. We
use this powerful information to shape our thoughts for new investments. Between 2004 and 2010,
we supported 48 major acquisitions for 19 of our portfolio companies, allowing many of those
companies to grow revenues by between 40% and 160%.
Transforming Performance
Between 2005 and 2011, we saw a combined increase of over 50% in revenues across our portfolio
companies. Where our objectives for the long-term success of our businesses have been achieved,
we have actively pursued opportunities to sell investments. Despite 2011’s challenges, we have
been able to realize $2.3 billion of gross proceeds from full and partial exits.
We believe this attention to detail along with our committed focus on profitable revenue growth
and working in partnership will help us to continue creating sustainable earnings growth for our
portfolio companies.
