How do long-term investors develop their companies?

On the one hand, we receive offers via an estab­lished network of consul­tants, asso­cia­ti­ons and medium-sized insti­tu­ti­ons; on the other hand, we also conduct inten­sive scree­ning of indus­tries and regi­ons and are incre­asingly actively approa­ching entre­pre­neurs or compa­nies. Deca­des of expe­ri­ence, our estab­lished “brand” and indus­try focus help us achieve this. “Hidden cham­pi­ons” for us are estab­lished, tech­no­logy-driven medium-sized compa­nies that hold a leading posi­tion in their market segment. The follo­wing applies: niches are better than mass markets, and tech­no­logy leader­ship is better than price leader­ship. Of course, the compa­nies should not only have a successful history, but also have the poten­tial to deve­lop posi­tively under the GESCO umbrella.

Under the umbrella of a listed corpo­ra­tion, compa­nies can usually act much more dyna­mi­cally in terms of (growth) finan­cing than in the hands of a private indi­vi­dual. The respec­tive mana­ging direc­tors are respon­si­ble for the day-to-day busi­ness, but beyond that the holding company provi­des support, for exam­ple, in stra­te­gic decis­i­ons and major invest­ments, in inter­na­tio­na­liza­tion and in M&A. Very importantly, being part of an indus­try group with simi­lar “brot­hers and sisters” breaks down the isola­tion in which many sole proprie­tors operate. The much-vaun­ted networ­king has been part of our DNA since our foun­ding 26 years ago.

Buy-and-build in the clas­sic PE sense — buying toge­ther value chains, merging compa­nies, lever­aging syner­gies — is not our busi­ness. The compa­nies will remain inde­pen­dent “speed­boats” after the take­over by GESCO. So buy-and-hold is more like it, but sounds too passive. We certainly strive for active further deve­lo­p­ment of the compa­nies. This applies to orga­nic growth, but can also include M&A at subsi­diary level, for exam­ple the acqui­si­tion of a compe­ti­tor abroad. When we think of dive­st­ments, it is not for the sake of exit profit, but at best for stra­te­gic reasons. The exit is deci­dedly not part of the busi­ness model, and we do not want to damage our repu­ta­tion as a long-term inves­tor. But the world is chan­ging, and we must retain flexi­bi­lity in stra­te­gic matters. 

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About GESCO AG:

As an invest­ment company, GESCO AG acqui­res profi­ta­ble, stra­te­gi­cally inte­res­t­ing medium-sized indus­trial compa­nies. Since its foun­da­tion in 1989, a strong group of hidden cham­pi­ons, market and tech­no­logy leaders has been built up. In terms of diver­si­fi­ca­tion, the custo­mer indus­tries are broadly diver­si­fied. Espe­ci­ally in terms of sustaina­bi­lity the company wants to clearly distin­gu­ish itself from clas­sic finan­cial inves­tors: “Deeply ancho­red in GESCO’s ‘DNA’, it deter­mi­nes our actions: We conti­nue to imple­ment proven busi­ness models and deve­lop them further. Our central task is to exploit growth poten­tial and secure the Group’s long-term future viabi­lity.” — GESCO went public on 24 March 1998.

About Chris­toph Borges

After his studies at the RWTH Aachen (mecha­ni­cal engi­nee­ring) he worked in a tech­ni­cal-orga­niza­tio­nal consul­ting company in the field of mecha­ni­cal and plant engi­nee­ring. He then became mana­ging direc­tor and head of logi­stics for various inter­na­tio­nal produc­tion plants at an Evonik subsi­diary in the power plant sector. In 2000, change to the private equity busi­ness, since then active in various private equity compa­nies (mino­ri­ty­/­ma­jo­ri­ty­/­buy-out/­suc­ces­sion). Active in commit­tees (advi­sory board/supervisory board) in addi­tion to opera­tio­nal acti­vi­ties. Since Septem­ber 2014, he has been respon­si­ble for M&A.die Börse as Head of Acqui­si­ti­ons at GESCO AG.