In a recent fireside chat, Matthias Wilcken, Senior Partner and Member of the Executive Committee at Rivean Capital, shared his expertise on private equity, digitization, and the current market landscape. Here’s a summary of the key topics discussed:
Background and Investment Focus: Wilcken introduced himself and Rivean Capital, a mid-market private equity investor with a focus on entrepreneurial-led founder-led businesses in Europe. The firm specializes in business services, advanced industrial tech, and sustainability, with a typical investment size of €250-300 million.
Pre-Assessment Phase and Digitization: Wilcken emphasized the importance of pre-assessment in identifying potential investment opportunities. Rivean Capital’s experience in the bike leasing sector, for example, allowed them to understand the market and engage in meaningful discussions with founders. Digitization is a key theme in their investment approach, particularly in business services and industrial tech.
Data Storage and Organization: When asked about data storage and organization, Wilcken highlighted the importance of scenario planning and understanding potential risks in an investment. While data collection is essential, it’s equally crucial to recognize the limitations of data in predicting crises.
Coaching and Developing Teams: Wilcken shared his approach to coaching and developing teams, emphasizing the importance of humility, experience, and a willingness to learn from mistakes. He believes people should be encouraged to think critically and develop their skills, rather than relying solely on data or assumptions.
Entrepreneurial Spirit and Risk Assessment: When assessing investment opportunities, Wilcken looks for entrepreneurial spirit, risk tolerance, and a willingness to adapt to changing market conditions. He emphasized the need to understand the motivations and risk profiles of entrepreneurs and management teams.
Criticalities and Macro-Level Risks: Wilcken identified succession planning as a critical issue for private equity firms, as well as the need to balance portfolio risks and returns. He also highlighted the importance of understanding macro-level risks, such as interest rates and economic downturns.
Fundraising Environment: Wilcken observed that the fundraising environment is challenging, with many private equity houses struggling to raise the next fund. He emphasized the need for a strong team, critical debate structure, and an open approach to risk assessment.
Key timestamps:
00:09: Introduction and Background
01:18: Rivean Capital’s Investment Focus
02:42: Differentiation and Approach
04:56: Pre-assessment and Due Diligence
08:33: Data Management and Predictive Analytics
10:44: Scenario Planning and Risk Assessment
12:17: Experience and Evolution in Investment
16:11: Coaching and Training in Private Equity
18:40: Understanding Entrepreneurs’ Needs
20:02: Assessing Risk and Solutions
21:57: Partnership and Credibility
22:49: Challenges for Specialized Businesses
23:13: Succession and Team Stability
24:26: Portfolio Stability and Market Challenges
25:33: Critical Factors for Private Equity Success
26:39: Industry Outlook and Competition
28:09: Investment Landscape and Differentiation
29:04: Investment Preferences