eNewsletter no. 519

03 April 2020
   

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Dear Reader

In a dramatic time for the public equity markets, private markets such as private equity and venture capital, private debt and secondaries could be set to outperform.

Research from Cambridge Associates shows that during the financial crisis, the S&P 500 was down 40% from peak to trough, while U.S. private equity fell only 25%, late-stage venture funds were down 15%, and early-stage venture funds were down less. One caveat: There was a V-shaped market and economic recovery in 2009. Without that, private funds could move lower. On the other hand, countries such as China, Taiwan, Japan and Singapore exit the lockdown. Many venture businesses aren't cash-positive and are assessing how to stay afloat during the crisis. Many fund managers will certainly support investee companies through 2021. Maybe we can also arrange that they get access to the federal rescue package.

The pandemic will increase investor interest in health-care-related investments such as telemedicine and virtual health. SECA members such as HBM Partners see many opportunities. Don‘t forget as an investor: A crisis is always a great investment period. So please keep your pocket open!

Have a nice weekend,
Maurice Pedergnana

 
 
 

SECA

 
   

SECA asks CMS von Erlach Poncet Ltd.

Stefan Brunnschweiler, Global Head CMS Corporate/M&A, CMS von Erlach Poncet AG, Zürich.

  • What are your highlights of the year 2019?
    2019 today feels like a lifetime ago: a very different context and mood… As far as CMS Switzerland is concerned, we are proud to have again advised on a number of prestigious transactions in 2019 and ending the year as No. 2 by deal count in Switzerland. With offices in Geneva and Zurich, totalling more than 100 lawyers, we were happy to see a continuation of the sustained deal activity registered in previous years. Our year started with a highlight transaction we advised on, namely the sale of a majority stake in agta record to the Swedish group Assa Abloy based on a valuation of EUR 933 million. Private Equity and Venture Capital deals kept us busy in 2019. To give two examples, we advised German investor Halder on two acquisitions and continued to advise capiton on the expansion of the CymbiQ group, namely on the acquisition of Koch IT. Technology, pharma and chemicals were further focus sectors in 2019: we supported Bruker on the acquisition of PMOD Technologies GmbH, IMCD on the acquisition of DCS Pharma AG, Syncona on an investment in Anaveon AG, Showa Denko on the acquisition of the ILAG group and Conzzeta on the sale of the Schmid Rhyner group. Throughout the year, our M&A related work for long-standing industrial clients like ABB saw a natural continuation. If we move the discussion to broader geographies, I will have to say I was positively surprised that political instability around Brexit and US trade wars did not significantly impact European M&A. As I am also acting as Global Head of CMS Corporate/M&A, I can share that in 2019 we supported globally on more than 450 deals and CMS has been  ranked as number one by deal count in Europe, the UK, Germany, CEE and DACH, maintaining a performance set in the years before. We continued the tradition of analysing data from deals we worked on, and published our sought-after European M&A Study. As we just launched its freshest edition, here is the link to the 2020 publication: Link

  • What where you expectations for the Mergers & Acquisitions market in 2019 and how are things looking now?
    In the 2019 edition of the “European M&A Outlook”, we were drawing attention to the 'somewhat faltered optimism' amongst dealmakers for the future of European M&A and the beginning of a downturn in dealmaking activity. We were cautioning that executives feared the European climate would worsen, and whereas the outlook for M&A was broadly negative, an upsurge in distressed M&A and restructurings was expected: 'Respondents almost unanimously (95%) expect distressed M&A to rise, with 94% believing that restructurings will increase in number.' What we were predicting then is certainly happening, although catalysed by a conjecture we could not have seen coming. We are now facing an understandable apprehension for both the short-term and the longer run. Businesses are looking to adapt to the new. Different scenarios unfold now at the same time, ranging from optimization of processes (that in some cases should have already been adjusted a while ago) and cash flow to stabilization programs or, in some cases, bankruptcy. In the not so distant future we will witness more distressed M&A that we have ever seen and some companies will look for targets which are put up for sale at lower prices. When this context comes to a close, those who will be standing are those to have proven their adaptability, which will be key and make all the difference.

 
 

Invest Europe - Newsletter

Welcome to Invest Europe's new weekly newsletter. Now more than ever, we are here to speak for our members and provide the resources you need to carry out your business, support your portfolio companies and plan for the future.

 
 

SECA Training Romandie

La SECA (Swiss Private Equity and Corporate Finance Association) et France Invest s’associent pour proposer un cycle de formations en français facilitant la montée en compétences des professionnels intéressés par le capital-investissement (private equity) en Romandie. Nous offrons aux membres et non-membres un cycle de sept formations conçues pour un large public, allant des nouveaux entrants dans les métiers du private equity aux pro-fessionnels plus établis, mais aussi aux chargés d'affaires et acteurs du middle et du back office souhaitant approfondir leurs connaissances, professionnels de la finance, de la banque, des assurances et des caisses de retraites.

 
 

3. SECA Workshop Venture Capital

Bitte beachten Sie, dass der 3. SECA Workshop Venture Capital auf Grund der aktuellen Lage in den Herbst 2020 oder Frühling 2021 verschoben wird. Die neuen Daten werden so bald wie möglich bekannt gegeben.

Wir zeigen auf, was Venture Capital im Unterschied zu anderen Assetklassen ist, welche Märkte es gibt, wie Venture Capital funktioniert, welches die wichtigsten Marktplayer und deren Geschäftsmodelle sind, wie VC reguliert ist, welche Gründe für Venture Capital sprechen, wie ein Investor investieren kann und was die Erfolgsfaktoren für Investments sind. Neben diesen Themen dürfen Erfolgsgeschichten aus der jüngsten Vergangenheit aus den Bereichen Innovation, Unternehmertum und Venture Capital nicht fehlen. Zur Verknüpfung von Theorie und Praxis gestalten namhafte Referenten aus der Industrie sowie aus der Forschung und Entwicklung den Workshop mit.

 
 

SECA Seminar: Private Markets

Diverse Daten - Bern, Genf, Rotkreuz, Zürich

Institutionelle Investoren können Private Markets nutzen, um ihre Rendite zu steigern und durch zusätzliche Diversifikation ihr Risiko zu optimieren. Doch wie funktionieren Investitionen in Privatmarktanlagen? Das SECA Seminar gibt einen Einblick in diese breite, vielfältige Anlageklasse.

Sollte es zu gegebener Zeit nicht möglich sein, das Seminar physisch anzubieten, werden wir ein verkürztes Webinar durchführen.

 
 
 
 

Venture Capital

 
   

btov Newsletter: March 2020

Read the latest news from btov in their Newsletter March 2020.

 
 

Die Zukunft gehört den mutigen Macherinnen und Machern

Positive Neuigkeiten von Schweizer Firmengründungen: Trotz Corona-Krise bleibt die Anzahl an Neueintragungen ins Handelsregister im ersten Quartal 2020 auf einem hohen Niveau. Die nationale Analyse des IFJ Institut für Jungunternehmen zeigt, dass in den ersten drei Monaten 11’358 neue Firmen gegründet wurden.

 
 

Support actions for startups in times of coronavirus

A big thank you to 660 founders who participated in our survey about COVID-19 bank loans for startups. For 70% the current loan concept of the federal government does not work. We will continue to work on a solution that covers the whole of Switzerland. In the meantime, however, individual cantons such as Zurich, Bern, and Schaffhausen have launched their own measures for startups. Discover the details on our coronavirus landing page.

 
 

Coronavirus: Politische Unterstützung für Startups

Startups können Fragen, Erfahrungen und Forderungen zu Kurzarbeit, Bürgschaften und anderen staatlichen Unterstützungsmassnahmen auf einer Webseite melden. Dahinter steht die Parlamentarische Gruppe Startups und Unternehmertum. Die Gruppe um Judith Bellaiche und Andri Silberschmidt will die Anliegen bündeln, Fragen klären lassen und Forderungen in den politischen Prozess einbringen.

 
 

CHF 150‘000 für epigenetische Tests und pflanzliche Proteine

In Corona-Zeiten, wenn Start-ups es am meisten brauchen, unterstützt und finanziert Venture Kick weiterhin Schweizer Start-ups ohne Unterbrechung. Genknowme und Planted Foods, ein Lausanner und ein Zürcher Unternehmen, wurden am vergangenen Mittwoch mit je 150'000 Franken ausgezeichnet.

 
 

150’000 CHF für ein Atemstimulationsgerät

Das Venture Kick Board freut sich, einen der Joker-Kicks an das Start-up STIMIT zu vergeben und somit die Entwicklung von Medizinprodukten für Patienten ohne natürliche Atemfunktion zu unterstützen, was in Zeiten von Corona von lebensentscheidender Bedeutung ist. Das Unternehmen mit Sitz in Nidau erhielt 150’000 CHF.

 
 

Grossartige Startups werden oft in schwierigen Zeiten geboren

Venture Kick investierte 40’000 Schweizer Franken in sein 700. Projekt und überschritt die 30 Millionen Franken an Investitionen in talentierte Forscher, um die Kommerzialisierung ihrer Erfindungen auf den Weltmärkten zu unterstützen. Dieser Meilenstein wird vor dem Hintergrund der Coronavirus-Krise erreicht, die an die Finanzkrise im Jahr 2008 erinnert, als das Programm Venture Kick gestartet wurde. Wie haben sich die ersten Venture Kick Startups entwickelt, die in schwierigen Zeiten geboren wurden? Ein Rückblick.

 
 

Spotlight Wenger & Vieli Rechtsanwälte: Prospektpflicht bei Start-up- Finanzierungsrunden

Bei einem öffentlichen Angebot zum Erwerb von Aktien und anderen Effekten ist ein Prospekt zu erstellen. Das gilt grundsätzlich auch für Finanzierungsrunden. Von der Prospektpflicht bestehen jedoch Ausnahmen, von denen Start-ups profitieren können.

 
 

Zukunftsfonds für institutionelle Investoren

Mit dem Alpha Future Fund, der von Alpha Associates verwaltet wird, steht institutionellen Investoren ein weiteres diversifiziertes und professionell geführtes Anlagevehikel zur Verfügung, der in aufstrebende und innovative private Jung- und Wachstumsunternehmen investiert. Es ist einer der ersten reinen Venture Capital Multi-Manager-Fonds, der in Unternehmen aus den Zielmärkten Europa und Schweiz investiert. Der Fonds tätigt direkte Fonds- und Co-Investitionen. Unterstützung erhält Alpha Associates von der Stiftung Pro Zukunftsfonds Schweiz, die sich seit Jahren für die Verbesserung der Rahmenbedingungen für Risikokapital und Jungunternehmen in der Schweiz engagiert.

Alpha Associates wurde 2004 im Zuge eines Spin-outs von Swiss Life gegründet und ist ein unabhängiger Private Equity, Private Debt und Private Infrastructure Manager und Berater mit Sitz in Zürich. Ein Team von 40 Fachleuten unterstützt institutionelle Investoren dabei, überdurchschnittliche Renditen zu erzielen. Mit mehr als EUR 5 Mrd. an verwalteten Vermögen ist Alpha Associates in mehr als 300 Zielfonds (Primärinvestitionen, Sekundärmarkt-transaktionen und direkte Co-Investitionen) investiert.

 
 

European VC Valuations Report

The 2019 Annual European VC Valuations Report covers trends shaping the valuations of venture-backed companies in the continent, slicing the data to examine each sector, venture stage and European region. We take a look at activity for European unicorns in particular, the number and aggregate value of which have never been greater on an annual basis. Our report also compares valuation trends between deals involving traditional versus nontraditional investors in VC, focusing on the growing influence of CVC arms. We conclude with a discussion of the year's liquidity and the impact that increasing availability of late-stage capital has had on exit valuations.

 
 

Numerous Cleantech Startups in the Top 16

16 startups are one lap further in the race for five coveted W.A. de Vigier Awards. The startups were selected from 60 young companies who presented their ideas to the foundation board, investors and invited guests on Selection Day in mid-February. Finally, five startups will receive CHF 100,000 each at the award ceremony on June 3, 2020.

 
 

Switzerland: #1 country for ease of starting and developing a business

Global Entrepreneurship Monitor’s (GEM) latest Global Report on the ease of starting and developing a business, has been published. Switzerland spearheads the rank of 54 countries that participated in the study. The country scored the highest in the framework conditions, physical infrastructure and R&D transfer. The area of entrepreneurship education at school level however remain weak.

 
 

Startup Guide Switzerland

With big money investing in big ideas, pioneering entrepreneurs across Switzerland are showing the world that impact startups aren’t just a trend – they’re the new norm.

 
 

Sequent Series A: 8M out of 16M CHF round committed!

Even though the times are hard for Startup financing (YoY Q1 VC/PE investment is already down by 26% globally at USD 62bn), Sequent has been able together with their partner global fundraise partner INDIGI already fill their round of CHF 16m with CHF 8m commit from investors.

 
 
 
 

Private Equity – Swiss News

 
   

Schroders Adveq: Private assets in 2020: What next?

Interest in private assets will continue to grow over the next year. Schroders Adveq’s experts across private equity, private debt, real estate, infrastructure and insurance-linked securities, highlight what to expect. Schroders’ latest survey of global institutional investors shows that private assets comprise around 10-15% of institutional portfolios. However, most expect the allocation to rise over the next three years. This makes sense to us. At a time when macroeconomic and geopolitical concerns are increasingly on investors’ radars, private assets can offer meaningful diversification and compelling returns.

 
 

«Wir erwarten schnelle Erholung des Healthcare-Sektors»

Stefan Blum & Dr. Christian Lach, Portfolio Management Healthcare Funds & Mandates, Bellevue Asset Management AG, Küsnacht ZH im Gespräch mit FUNDPLAT.

 
 

Partners Group reports strong 2019 financial performance

2019 was another strong year for Partners Group, supported by sustained demand across all regions from clients, who entrusted the firm with USD 16.5 billion in new commitments. North America, the UK and Switzerland represented the largest share of client demand, together contributing over half of the total inflows in 2019. In terms of investor types, institutional investors such as pension funds, insurance companies, sovereign wealth funds and asset managers, as well as family offices, continued to be the key contributors to AuM growth, representing 80% of total client demand during the period.

 
 

Partners Group 2019 Corporate Sustainability Report

Partners Group's 2019 Corporate Sustainability Report explains how Partners Group created positive impact from environmental, social and governance (ESG) factors throughout its investment portfolio in 2019 and provides updates on key corporate sustainability metrics, demonstrating Partners Group's strong commitment to both responsible investment and sustainable business practices.

 
 

Spice Releases Annual Report 2019

Spice Private Equity Ltd.: The Net Asset Value of the company reached USD 183.4 million as of 31 December 2019, compared to USD 202.0 million at the end of December 2018.

 
 
 
 

Private Equity – Int. News

 
   

Media Monitoring

 
 

IPEV Board, Special Valuation Guidance

The IPEV Valuation Guidelines provide the framework for delivering LPs the fair value information they need. Given the magnitude of the current crisis accompanied by significant uncertainty, the board highlights the following for all managers and investors applying the IPEV Valuation Guidelines (“the Guidelines”) at 31 March 2020.

 
 

BlackRock Private Markets 2020: Applying an outcome lens to today’s landscape

The BlackRock guide explores what this means in practice in the context of the current climate: Private investments play an increasingly important role in most institutional portfolios, and private markets have grown larger, more diverse and more dynamic. BlackRock believes it is time for investors to look beyond the asset-class view and take an outcome-based approach. This means comparing dissimilar investments to one another and evaluating them in terms of how well they support the goals of the entire portfolio.To make the case, BlackRock provides timely analysis of 13 private asset classes, organised according to three of the most common outcomes sought by investors. We also present a portfolio impact analysis for each outcome, showing the potential results of our approach.

 
 

CalSTRS commits USD 6.6bn to infrastructure in 2019 and rebalances portfolio

California State Teachers’ Retirement System (CalSTRS) made USD 6.6bn of infrastructure commitments in 2019 and is tilting its USD 4.1bn portfolio slightly in favour of higher-return, opportunistic strategies. According to a board meeting report, the USD 252bn pension fund has shifted the allowable range for opportunistic investments from 0-20% to 5-25% of the portfolio, while changing the allowable range for core from 45-75% to 40-70%. The balance is in value-add investments.

 
 

AVCO Newsletter March 2020

Die AVCO als Dachverband der österreichischen Private Equity und Venture Capital Industrie publiziert unter anderem auch einen regelmässigen Newsletter.

 
 

Global Private Equity Report 2020

The 11th annual report shows another great year for PE. But the game is getting harder as asset prices soar and 10-year public market returns match PE returns for the first time.

 
 

Draw Credit lines and focus on liquidität

Blackstone and Carlyle are sending a message to portfolio companies: Do whatever it takes to stave off a credit crunch. Businesses controlled by the firms are drawing down bank credit lines to help prevent any liquidity shortfalls amid signs of mounting stress in markets. At Blackstone, the focus is on sectors hurt by the coronavirus, such as hospitality and energy. At Carlyle, the firm has been having talks with management teams at portfolio companies and recommended drawing credit lines in certain instances.

 
 

Government infrastructure spending in UK

The UK government has set out a five-year plan to spend GBP 640bn (EUR 733bn) on infrastructure in its budget announcement recently. The Chancellor of the Exchequer Rishi Sunak said he expected the money to be pumped into developments including telecommunications, roads, railways, schools and hospitals.

 
 

Capital Dynamics Insight

Private equity co-investment funds present a number of attractive performance and risk characteristics. We thought it would be helpful to share with you our latest empirical study exploring their outperformance and risk mitigation versus single-manager primary private equity funds.

 
 

European PE Firms Put Sale Processes on Ice

EQT AB is deferring the sale of software maker IFS, people with knowledge of the matter said. It collected initial bids earlier this month from buyout funds valuing the business at more than EUR 3bn. Bridgepoint is also postponing the sale of Iberian agrochemical business Rovensa, initially expected to fetch more than EUR 1.2bn. the matter said. European firms have now put many of their pending M&A processes on hold until there is more clarity on the economic impact of the coronavirus pandemic. While they’re hoping to rekindle discussions when the market turmoil subsides, some of the deals may not be revived immediately or could ultimately be canceled, says Wolfgang Zürcher from Wenger Vieli.

 
 

Cinven, EQT Planning USD 438m Loan to Shore Up Travel Firm

The firms, which own the Spanish company, are proposing the new loan ranks alongside EUR 1.4bn of existing facilities. The cash injection will help ease a liquidity crunch and support working capital requirements throughout the crisis.

 
 

European Private Equity Firms Take Steps to Stave Off Cash Crunch

European private equity firms are preparing their portfolios for a potential liquidity crunch as the impact of the coronavirus roils markets and threatens global growth. Partners Group, EQT AB and Permira have urged some companies they own to draw down credit facilities to prevent shortfalls of working capital if economic prospects worsen. CVC Capital Partners is also discussing the potential of tapping unused credit lines for certain firms in the future. “Private equity funds have learned from 2008-2009, and they are trying to draw as much credit facilities and working capital facilities as they can,” said Wolfram Schmerl, a managing partner at advisory firm Alantra Partners SA in Germany.

 
 

Opportunities to buy

Buyout funds have been rushing to spend near-record amounts of dry powder, in many cases competing against each other and driving up asset prices. If the coronavirus triggers a global demand shock, it could force private equity firms to shift their focus from hunting for targets to managing their existing holdings and finding ways to weather the downturn.

 
 

Apollo Snaps Up Portfolio Company Debt

In an upbeat call with investors, Apollo Global Management Inc.’s co-heads of private equity investing said they are tracking more than 250 potential opportunities to scoop up distressed assets, and pursuing chances to enhance returns by snapping up its own portfolio companies’ discounted debt.

 
 

Temporary mark downs of 15 percent and more

Apollo expects to mark down its private equity portfolio by 15% to a “low 20%” figure in the first quarter. They predicted most markdowns may be temporary. The S&P 500 has tumbled about 24% so far this year. The dislocation of valuations in the leisure and travel sector has presented an opportunity that arises only once every 12 or even 50 years. Apollo, out of all the firms on Wall Street, is uniquely able to provide structured financing to gaming ventures, cruise operators, airlines and other companies, which may need billions of capital to weather the pending recession, they said. The private market firm is tracking more than USD 125bn of debt opportunities across 45 companies in the travel and leisure sector and already buying the debt of six. The firm’s credit fund already purchased a portion of a United Airlines Holdings Inc. loan.

 
 

PE & VC League Tables 2019

PitchBook's 2019 Annual Global League Tables is the comprehensive ranking of private equity, venture capital and service provider activity for the full year, worldwide.

 
 

Ardian secondaries fund with USD 18bn

The Paris-headquartered Ardian has reportedly hauled in about USD 18bn for its latest mammoth secondaries private equity fund (ASF VIII) and for co-investments. It is the sixth largest private equity fund ever raised.

 
 

Gilde Healthcare raises USD 450m for fifth fund

Remote monitoring and home care of patients will be a key focus for Gilde Healthcare V, following the outbreak of Covid-19.

 
 
 
 

Corporate Finance

 
   

Valuation Market Essentials and Practitioner's Guide to Cost of Capital

We are pleased to announce the Q4 2019 edition of the EY Valuation Market Essentials, the publication with relevant market data for Switzerland, incl. analyses for the banking and insurance industry. This publication gives an overview of market multiples and cost of capital components per industry and includes also relevant macro-economic data used in business and other valuations such as impairment tests or purchase price allocations.

 
 
 
 

Mergers & Acquisitions

 
   

Newsletter Oaklins, M&A-Beratung

Read the latest news from Oaklins Switzerland:

  • COVID-19: Finanzieller Quick Scan und Unterstützung beim Antrag für Überbrückungskredit
  • 25 Jahre M&A
  • Möbel Pfister sichert Zukunft mit XXXLutz-Gruppe
  • Bühler verkauft das Mehlzutatengeschäft in China an das Schweizer Unternehmen Bakels
  • Information Technology M&A Outlook 2020
  • Medien und Werbung M&A Report 2020
  • Medtech M&A Outlook 2020
  • Bewertung von immateriellen Vermögenswerten
 
 
 
 

Book of the Week

 
   

Goodbye «Fin»? Hello «Tech»!

Der Schweizer FinTech-Markt hat im Vergleich zum Vorjahr an Wachstumsgeschwindigkeit eingebüsst. Gleichzeitig ist die Branche aber reifer geworden. Das zeigt die «IFZ FinTech Studie 2020» der Hochschule Luzern. Ein Muster zeichnet sich bei den Akteuren der Branche ab: Tech-Firmen beginnen den Finanzunternehmen den Rang abzulaufen.

 
 

Typische Formen der Unternehmensnachfolge - Erkenntnisse aus der Praxis

Das in deutscher und englischer Sprache erschienene Buch "Typische Formen der Unternehmensnachfolge - Erkenntnisse aus der Praxis". bzw. «Typical forms of company succession – Practical insights» als Zusammenarbeit zwischen der Hochschule Luzern - Wirtschaft, Hitz & Partner Corporate Finance AG und Lex Futura AG befolgt das Ziel, die typischsten Formen von Nachfolgeregelungen auf anschauliche und kompakte Weise und unter Einbezug von finanziellen, rechtlichen und steuerlichen Aspekten darzustellen.

 
 
 
 

Jobs

 
   

How to publish a job ad

On this place your Job ad could be published.

If you are interested please send an e-mail with your job ad, the company logo and a short description about the Job and/or the Company to info@seca.ch.

  • for SECA Full Members
    free of charge
  • for SECA Associate and Individual Members
    CHF 100.- / 2 editions
  • for Non-Members CHF 200.- / 2 Weeks
 
 
 
 

Agenda

 
   

Startup Konferenz 2020 - What about Compliance?

Erfolgreiche Gründer/innen geben Praxistipps und teilen ihre Herausforderungen im Bereich Compliance bei der Gründung oder Aufbau ihres Unternehmens. Zudem pitchen Anbieter von digitalen Services, Rechtsberater/innen und Finanzierungsprogramme zu Compliance Themen.

 
 

Upcoming SECA Events - save the date

  • SECA Annual General Meeting
    Donnerstag, 28. Mai 2020, Online
  • Private Markets & Cryptovalley
    October 2020, Zurich
  • SECA Evening Event – VC’s on Stage (D/E)
    Mittwoch, 28. Oktober 2020, Zürich
     

SECA Education

More information will follow in due time. Please see also on www.seca.ch - Events.

 
 
 
 

Editor

 
   

Editor

SECA eNewsletter is a free online newsletter published by Maurice Pedergnana, Managing Director of the SECA Swiss Private Equity & Corporate Finance Association, received by more than 3'000 email addresses. More information: www.seca.ch or +41 41 757 67 77 (Andrea Villiger). The eNewsletter archive service is available only for SECA members.

 
 
 
 

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