Bringing in Gilde
Hockey
16
short news
WHAT'S NewS Issue 7 July 1996
MBO FOCUS
A second fund will be devoted to medium^
sized MBOs. It will be 100 percent fundecH
by Rabobank and it will focus on clients
of the local Rabobanks. Meanwhile, a
third fund will concentrate on investments
in early-stage technology-based
companies, with a special focus of
information technology and food
processing. There will also be a 'special
fund' which will invest in foreign
investment companies, and thus serve as a
'window' onto dynamic markets abroad.
CULTIVATING ENTREPRENEURS
The Gilde acquisition marks a new
strategie approach by Rabobank to the
venture/MBO field. Many banks rushed
into this market in the late 1980s, but very
few actually made money: the risk/reward
ratios proved entirely unsatisfactory. 'We
had a long steep climb up the learning
curve,' concedes Willem van 't Hooft of
Corporate Finance. 'Like most of the
banks, our initial excursion in venture
capital was unattractive in terms of risk
and reward. But, of course, we learned
our lessons. One is to focus on steady-
state companies with proven
managements, where the risk reward
ratios are far more attractive. Another is
that you mustn't view MBO financing
from a strictly banking perspective. You
have to cultivate an entrepreneurial
outlook and focus on factors like cash
flow. Because it can be hard for traditional
bankers to reinvent themselves in this way,
and because the roles of equity provider
and corporate lender are frequently in
essential conflict with each other, we
decided that the best thing was to position^
our venture capital and MBO activities
outside the bank itself. This was the basic
thinking behind the Gilde acquisition and
its present reorganization.'
Rabobank has consummated a new strategie relationship through its
acquisition of Gilde Investment - a private equity investment fund devoted to
investing in and developing new business potential.
Strategie relationship - Van 't Hooft outlines MBO potential.
Gilde's objective is to select businesses
capable of realizing an overall cash return
for its investors that is at least equal to the
return on a 10 year bond, plus a risk
premium of 10 percent compounded
annually. Gilde is comprised of a
management company - with all of its
expertise - which will oversee four
separate investment funds that are now in
the process of being formally constituted.
International, this fund will offer a total
service that includes equity provision (via
Gilde), mezzanine or subordinated debt
(via Corporate Finance), and senior debt
(via Corporate Banking). Outside
investors like Aegon, ABP and other big
institutions and pension funds are being
invited to participate as shareholders in
this fund.
DEDICATED FUNDS
The first, a corporate fund with capital of
NLG 1 billion, will focus on management
buy-out (MBO) and buy-in (MBI)
investments valued at approximately NLG
25 million. Closely linked to Rabobank
GILDE VENTURE
FUND
Deze nieuwe loot aan onze
stam houdt zich bezig
met participaties in bedrijven via drie fond
sen. Zij richten zich op (middel) grote MBO's
en MBI's. Het zijn op techniek gebaseerde
bedrijven (met name op het gebied van IT en
voedselproductie. Het vierde fonds gaat
investeren in buitenlandse investment funds.
As of July 1 of this
year, Rabobank
International is the
official sponsor of
the Dutch Royal
Hockey Federation
(KNHB).
We proudly present
the men 's team in
their brand new
'Rabobank
International' shirts.
