DACT seminar 7 April Funding of growth using governmental instruments Robert Ian Oei, NIBC Mezzanine & Equity Partners

Transcription

1 DACT seminar 7 April 2016 Funding of growth using governmental instruments Robert Ian Oei, NIBC Mezzanine & Equity Partners 1 1

2 Macro Economic & investor trends 2 2

3 mrt-07 aug-07 jan-08 jun-08 nov-08 apr-09 sep-09 feb-10 jul-10 dec-10 mei-11 okt-11 mrt-12 aug-12 jan-13 jun-13 nov-13 apr-14 sep-14 feb-15 jul-15 dec-15 mrt-07 aug-07 jan-08 jun-08 nov-08 apr-09 sep-09 feb-10 jul-10 dec-10 mei-11 okt-11 mrt-12 aug-12 jan-13 jun-13 nov-13 apr-14 sep-14 feb-15 jul-15 Macro Economic Drivers Consumer Confidence and Spending fueling corporate investments and GDP growth Consumer Confidence GDP Growth NL US EU Consumer Spending Corporate Investments

4 EUR billion European Private Equity Trends Fundraising and dry powder on the rise European Private Equity Fundraising, Investments & Divestments Private equity activity including fundraising is growing; dry powder is increasing Market statistics are still below pre-crisis years but improving rapidly Source: EVCA Funds raised Investment Divestment 4

5 The Investor Landscape Due to Basel III banks are becoming less important Fund Investor Landscape % of total investments Since 2011 banks are becoming a less important fund investor with the main cause being Basel III The spending of government agencies increased after the crisis started, as a result of stimulation programs Pension funds are the largest provider of sources of funds 40,00 35,00 30,00 25,00 20,00 15,00 10,00 5,00, Banks Fam Offices & HNWE Fund of funds Government agencies Pension funds Source: EVCA Banks are Moving Out % funding for highly levered loans Banks are moving out of highly leveraged deal and fund landscape, focussing on less risky transactions Since 2008 the participation rate of banks in equity and highly (unsecured) debt deals has lowered, in line with Basel III capital requirements NIBC is stepping into this vacuum by providing principal investments, with a focus on mezzanine Source: S&P Capital IQ LCD 5

6 Positioning of different financing sources Company Size versus risk/return profile of Capital 6

7 Positioning of different financing sources New financing initiatives focusing on SMEs most initiatives are still awaiting first loans to be originated Bank Mezzanine & Equity Partners 7

8 NIBC in the news in cooperation with RVO Quotes from a recent article in Banking Review magazine 8

9 RVO Groeifaciliteit Situation company (International) growth Management buy-out Management buy-in Company takeover Reorganisation Conditions Risk bearing capital (mezzanine loans or equity capital) For banks max EUR 5M per company For PE max EUR 25M per company Fresh Money (new capital for the company) Enough profitability and continuity perspective for the company Company is established in The Netherlands and mainly active in The Netherlands No cash distribution to shareholders in the last 12 months Not active in; agriculture, fishery, health care, real estate or financial institution (suppliers of these sectors are not excluded). Source: 9

10 Process RVO and NIBC Company approaches NIBC Bank with an Investment Proposal NIBC contacts RVO when they want to apply for the Groeifaciliteit RVO checks the guarantee application and gives their feedback on the proposal Close collaboration between RVO and NIBC enabling swift response NIBC can invest in their client proposal under the RVO guarantee plan 10

11 Example case Noordlease RVO guarantee supported the MBO of car leasing company As part of a strategic review Noordlease s shareholder, BMW Holding B.V. divested the Company. Company s management initiated a MBO Initial equity partner stepped out during the transaction process NIBC involved RVO to increase its possibilities NIBC offered Noordlease a package of equity and mezzanine financing to enable the MBO Thanks to the RVO Groeifaciliteit, NIBC enabled management to achieve their once in a life time opportunity 11

12 Acquisition Structure Noordlease Managemen t NOM NIBC Co- Investments NewCo Common Stock Preferred Stock MidCo NIBC Shareholder Loan RVO guarantee d Noord Lease NIBC Shareholder Loan ABN Amro Senior Loan ABN Amro Lease SPV 12

13 Other recent deals with RVO 13

14 Thanks for your attention! 14

15 Appendices 15

16 Direct Lending landscape We have identified seven distinctive private debt strategies in the mid-market Direct Lending landscape: 1. Mid-cap Private Placements 2. Traditional senior debt 3. Unitranche 4. Story credit unitranche 5. Subordinated (Mezzanine/PIK) 6. Growth capital 7. Structured equity There is a limited number of alternative Lenders operating in the L+450bps to L+600bps pricing territory. A number of large funds are now actively raising capital to target this part of the market. Direct Lenders approach the mid-market with either a niche strategy (mainly new entrants) of a broad suite of Direct Lending products to cater for a range of financing needs. The latter is mostly the approach of large asset managers. Source: Deloitte 16

17 Direct Lending landscape Source: Deloitte 17