The ins and outs of Gilde Investment Management 18 organization What'S NewS Issue 11 December 1997 Last year's acquisition of Gilde Investment Management - one of the pioneers in the Dutch venture capital market - was seen as both a coming- of-age for the company as well as an important new phase in Rabobank's strategie commitment to Gilde's high-yield investment strategy. What's NewS reports on what has been achieved since the deal was unveiled. Former Rabobanker Bert Steketee Leendert van Driel, founder of Gilde and one of its five partners. Gilde - now capitalized at NLG 1.6 billion - has been steadily intensifying its involvement both in the restructuring of high performance medium-sized European enterprises as well as in niche sectors of the global information technology (IT) business. Through a widening networlc of correspondents (and investors), its geographical reach has also been spreading from the Netherlands and Europe to the United States, the Middle East, and Asia. Gilde is presently comprised of a management company - which provides an essential core of expertise and contacts - and four individually-capitalized funds. The company's continuing ambitions will be highlighted later this month with the expected announcement about the formation of a new investment vehicle, Gilde Food Fund BV, to be capitalized at roughly NLG 150 million. TOTAL PACKAGE Of the four existing funds, the first, with capital of NLG 800 million, focuses on equity-type financings for management buy- out (MBO) and buy-in (MBI) investments involving mid-sized and occasionally larger companies in Europe. Known as the Gilde Buy Out Fund, it can offer a total package of financing services that include equity, mezzanine or subordinated debt (via R1 Corporate Finance), and senior debt (via Corporate Banking). This fund's close links with Rabobank are reflected in the fact that it has generated a loan volume of roughly NLG 100 million, as well general cross- fertilization that has led to Rabobank's involvement in several recent IPO's. Outside investors in the Buy Out Fund include AXA, a French institutional investor, the Dutch metal industry pension funds, and Interpolis. This investor base makes it possible for the Buy Out Fund to commit as much as NLG 150 million equity to a single deal - and has provided the muscle to power Gilde's thrust towards larger and more geographically diversified deals. STABLE CANDIDATES The fund's ideal buy-in/buy-out candidates are European-based companies with stable market positions, annual earnings of over NLG 5 million, strong historical and projected cash flows, and an ability to remain on the crest of the technological wave in their given business sectors. In 1996, for instance, Gilde structured, led and arranged the NLG 46 million management buy-out of Vendor, the Dutch paper-based hygiene systems company. It has also been instrumental in financially supporting the company's plan to expand through a policy of pan-European acquisitions. PARTNERS IN SOFTWARE Gilde's IT Fund boasts a capital of NLG 200 million and is oriented towards fast- growing high-tech innovators. Its aim is to help entrepreneurs move beyond their initial home markets in the Netherlands or elsewhere in Europe and develop a true global base: it can invest as much as USD 10 million in the latter phase of a young companies' growth. 'Some people think that IT is too narrow a focus,' laughs Leendert van Driel, a Gilde founder and one of its five general partners. 'In fact, it is an immense field in which it is dangerous to spread yourself too thin. One has to concentrate on a few specialities; ours include advanced software, wireless technology and lnternet-enabling applications.' The companies that Gilde IT has supported to date - which include Baan, Insignia Solutions and Uniface - have helped to put Europe on the world software map. Indeed, Gilde IT Fund investments have helped unleash a growing flow of listings by non-US technology companies on the NASDAQ exchange. MEETING SHORTFALLS A third fund, Gilde Participaties, was explicitly designed to expand in the all- important middle market sector. This fund, of particular importance from our perspective at Rabobank, is capitalized at NLG 300 million. However, 'there was an expectation that Gilde could be counted upon to meet any shortfall in risk capital for smaller clients to which Rabobank wished to extend a loan,' says van Driel. 'We have been obliged to clarify the fact From seed to erop - Gilde too provides all elements for growing investments.

Rabobank Bronnenarchief

blad 'What's news' (EN) | 1997 | | pagina 18