Mr. d’Elia, Xeon fund Sif Sicav is the Private Equity fund of Xeon International: which investment strategy has the company?
GdE: The investment strategy of Xeon Fund is focused on 3 Asset Classes through it’s dedicated 3 Sub-Funds called RECAP (Real estate), ENERCAP (Alternative Energies) and SEACAP (Water Fund).
We concentrate our efforts on specific industries such as BioFuel, Wind, Hydro and WEE (Electronic Waste) for ENERCAP (Alternative Energy Capital). In the Real estate we look at listed buildings in Germany and niche Hospitality opportunities and for SEACAP we look for Water Manufacturing projects.
What are the top three industries Xeon Fund is targeting?
GdE: We look at investing in sectors such as:
– Consumer & Retail
but there are a number of other industries that will become palatable to Private Equity investors in the near future: from Education to Agricultural, from Renewable Energies to Financial and Business Services.
How do you assess the instability of the financial markets and the impact on the investor community?
GdE: The instability is a factor going to become endemic in our markets, so all investors are expected to come to terms with that.
As regards the impact on the Private Equity industry we reckon that it is less exposed to the volatility because of the long term approach of investors: this enables to avoid putting the focus on short terms profitability in favour of future growth.
What are the key success factors for Private Equity funds to succeed?
GdE: Allow me to summarize it as follows:
1. Working capital management
2. Strengthening management of the company
3. Financial and control system implementation
To that I would also add that an efficient capital allocation based on capital needs and priorities plays a primary role.
What’s your view on exit strategies?
GdE: In our target regions the typical exit strategies are IPOs and trade sales: in some markets strategic and trade sales are dominant given limited domestic IPO markets.
Thank you and good luck for the future.
GdE: My pleasure.