Download - Volksbank AG

Assistance in the
acquisition and
disposal of corporates
Difficult market
conditions for private
equity/venture capital
Market position
strengthened with
10 transactions in
2001
Pioneer in the field of
mezzanine financing
now aims at further extending these instruments with a focus on quality. For the future, it is planned
gradually to expand the regional concentration on the extended European core market.
EUROPA CONSULT. Europa Consult GmbH saw higher demand for corporate finance services among
medium-sized companies. Europa Consult is a wholly-owned subsidiary of Investkredit, which specialises
in consulting on M&A transactions. In the year under review, the company had advisory mandates
in all fields of business, from the acquisition and disposal of corporates to the solution of the
problems of finding successors to family businesses and the structuring of financing transactions.
In 2001, a total number of 19 projects were supported. The customers of Europa Consult
include typical medium-sized companies as well as public sector entities seeking advice in relation to
privatisation projects. Europa Consult is becoming increasingly successful at winning business in to
large-scale transactions, for which attractive performance fees may be negotiated. This serves as
impressive proof that the company has been able to strengthen its position and now enjoys an excellent
reputation in its relevant market environment. In the near future, Europa Consult’s strategic focus
will also be on a well-targeted extension of its management buy-out activities, which provide
an ideal field to demonstrate the company’s know-how in the structuring of financing transactions.
INVEST EQUITY GROUP. The INVEST EQUITY Group consists of venture capital and private equity
companies with international investors and an Austrian investment focus. The group is one of the
three largest independent market players in this field. INVEST EQUITY acquires stakes in companies
that are not listed on the stock market and provides them with risk capital. Specialist teams cover a
broad investment spectrum ranging from knowledge-based early stage enterprises to spin-offs of
groups in the traditional sphere of industry. On the whole, INVEST EQUITY has in many important
respects strengthened its position in Austria despite the difficult conditions on the capital market.
Thus, the early stage team is now fully integrated. In the year under review, the INVEST EQUITY Early
Stage Fund acquired stakes in two life-science companies and hence successfully documented its
future emphasis. Furthermore, with KfW, Frankfurt, the Group was able to gain a renowned investor
for the endowment of a parallel investment fund complementing the funds managed by INVEST
EQUITY Beteiligungs-AG.
In the reporting year, the Group has effected three investments and seven subsequent financings.
Taking over the Austrian market leader in rotary printing in December 2001 not only raised the number
of portfolio corporates to 15 but also completed the transaction spectrum from high-tech growth
financings to spin-offs of consolidated subsidiaries and privatisations. The year under review was
characterised by heavy drops in the European stock markets which mainly affected information and
communication technology issues and new economy corporates. The resulting stagnation in new
issues thus had a strong impact on the venture capital industry and led to a prolongation of the
targeted and realisable market introductory phases. A significant easing of the tension may not be
expected in the next two quarters. In consequence, 2001 recorded a considerable decrease in the
volumes of new investments in venture-capital funds. However, the backlog in demand with respect
to venture-capital instruments, which still exists in Europe, gives reason to expect a considerable rise
in the inflow of funds from venture capitalists as mid-2002.
INVEST MEZZANIN. With a volume of EUR 40 m INVEST MEZZANIN is the first fund for mezzanine
capital in Austria. This innovative financing instrument offers Austrian corporates access to a form of
financing that has proved itself over many years at the international level. It is chiefly regarded as
subordinated debt and assumes equity-like functions (equity mezzanine capital). Mezzanine capital
has a higher risk than loans but is serviced before equity and thus occupies an intermediate position
between equity and borrowing in the financing structure. In the reporting year 2001, three investments
amounting to more than EUR 6.3 m were realised, so that the portfolio now comprises
eight corporates. With the exception of one fraud-related default, the investments generate potential
Corporates
THE BANK FOR CORPORATES
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