Cinven's Portfolio team consists of a growing team of experienced executives based in our London, Hong Kong, and New York offices. They focus on creating equity value across the lifecycle of our investments, working alongside our Board representatives and with management across Europe, Asia and the Americas.
Our Lifecycle concept revolves around four core areas:
- Functional expertise: we have developed in-depth in-house expertise across six core functions: Pricing, Salesforce Effectiveness, Internationalisation, Digital Disruption, Buy and Build and Cash. A senior portfolio team member has responsibility for leading each of these areas of expertise to enable our investment teams to better identify value drivers in the pre-investment due diligence phase and to fast-track implementation of these during our ownership.
- Value Creation Plan (VCP): we have significantly improved the 100 day review framework which we now term the VCP. For each investment, within the first six months we create an exit-oriented value bridge around specific value creation initiatives. For each of these, we develop a detailed business plan including forward looking operational indicators enabling us to predict financial performance before it is apparent in the P&L. We assign an individual project 'owner' internally and define clear milestones and outcomes. Management assessments form a standard component of our VCPs and the VCP is "refreshed" two to three years into the investment.
- Enhanced monitoring: the portfolio team ensures VCP delivery by monitoring not only financial performance but also forward looking key performance indicators (KPIs) for each portfolio company. These might include - market share, order book and customer satisfaction or Net Promoter Score (NPS) by brand.
- Interventions: we have created an intervention model - taken from our past experiences. This can be applied in the few cases where the forward looking KPIs give early indicators of underperformance, ensuring that the financial performance of the investment remains on track.
Across these four areas, the Cinven Portfolio Review Committee (PRC) considers how to best deploy the team and monitors progress against agreed objectives.
Asia's economic development provides Cinven's portfolio companies with outstanding opportunities for the development of low-cost sourcing and sales in new and growing markets. Cinven's Portfolio team in Hong Kong serves as a catalyst and enabler for our companies, helping them to capture these opportunities. Our Portfolio team in Hong Kong has provided knowledge and insights that have proved invaluable for new European investments, differentiating Cinven in the eyes of sellers of businesses and enhancing our reputation with management teams.
The European team concentrates more on emerging market development opportunities outside Asia and portfolio company process enhancement. They also provide valuable assistance to portfolio companies facing unexpected challenges and market downturns.
The portfolio team in New York supports the growth of Cinven's European portfolio companies expanding into the United States, Canada and Latin America.
Capital Markets team
Cinven's Capital markets team adds value in three key areas:
- structuring and executing acquisition financing for new investments;
- working with our portfolio companies to help them manage their debt facilities and treasury strategies; and
- managing Cinven's relationships with banks and other lending institutions.
A member of the Capital markets team works with the Cinven board members and the senior financial managers of each of our portfolio companies to:
- provide advice on debt management and treasury strategy, such as interest rate or foreign exchange hedging; and
- for significant corporate actions like acquisitions or disposals, to provide advice on financing options and implications for existing loan agreements.
Cinven's strong relationships with banks and other lending institutions gives us a competitive edge when we are looking at potential acquisition financing. The Capital markets team coordinates with Cinven investment teams to develop the optimal financing strategy for each new investment, based on market conditions and the objectives and preferences of different lenders.
The Capital markets team's depth of experience in the debt capital markets is particularly valuable in current market conditions, which have made banks and other lenders much more selective. Our reputation in the debt capital markets is an important asset, helping us to protect and create value in our current portfolio as well as to source debt capital for new investments on the most competitive terms.