Oktober 27, 2023
Switzerland is a global leader in private equity and the mid-cap segment is where the real opportunity lies. Swiss mid-cap companies are typically world-class leaders in their respective industries with strong track records of growth and profitability. They are also well-positioned to benefit from the country’s stable economy, favorable business environment and skilled workforce. One of the leading Swiss mid-cap private equity firms is Winterberg Group. Founded by Fabian Kroeher, Winterberg has quickly established itself as a significant player in the Swiss market. The firm profoundly understands the Swiss mid-cap landscape and has a proven track record of success investing in and growing these businesses.
As one of the leading private equity firms focused on mid-market deals in Switzerland, Winterberg Group focuses on a promising private investment region – Switzerland’s thriving mid-cap companies. According to Fabian Kroeher, Co-Founder and Executive Director of Winterberg Group, there are several competitive advantages fueling opportunities in this private equity niche. „We see Switzerland as one of the most resilient and attractive countries in Europe for mid-cap buyouts given stable regulations supporting businesses, low inflation, available debt financing, and an environment conducive to growth.“ said Fabian Kroeher.
Why Mid-Cap Swiss Private Equity?
There are several reasons why mid-cap Swiss private equity is such an attractive investment proposition:
Protecting Local Businesses. Switzerland places a high priority on safeguarding local small and mid-sized businesses. The government realizes these companies are the economy’s lifeblood and a significant source of job creation. As a result, policies are designed to nurture entrepreneurship and minimize risks for business owners. This stable regulatory environment gives Swiss mid-caps better long-term viability than other European nations.
Resilient GDP Growth. Despite facing many of the same global challenges as other countries, Switzerland has consistently shown significantly more substantial GDP numbers year over year. Even during the pandemic, Switzerland only saw a modest decline followed by a rapid rebound. Private equity deals thrive in periods of economic growth. The resilience of the Swiss GDP makes mid-cap companies excellent investment opportunities with more significant upside potential.
Low Inflation Environment. Switzerland has a long track record of keeping inflation rates very modest. This dampening effect stems from a strong currency, limited money printing, and prioritizing fiscal stability. Low and predictable inflation for private equity means better accuracy when modeling future cash flows and return metrics for portfolio companies. It eliminates one source of uncertainty that can throw off financial projections.
Available Debt Financing. The Swiss banking industry is world-renowned for its conservative practices and high standards. This means mid-sized firms have solid access to available debt financing through the local banks. Interest rates are low, and terms are reasonable. Combining a private equity investment with strategic leverage allows buyers to get more enormous company stakes and increase the overall deal size for the same upfront capital. This boosts investment returns.
Strong Swiss Franc. The Swiss franc has long been considered a haven currency. Even during global market turmoil, the franc tends to hold its value or appreciate against currencies like the euro and the US dollar; for private equity investors based in other countries, deals made in Swiss francs provide an added layer of currency diversification and insulation from weakening foreign exchange positions back home. Appreciation of the franc results in valuation boosts for portfolio companies.
Attractive Tax Environment. Tax rates for businesses and individuals are moderate in Switzerland compared to other large Western economies like France or Germany. The tax system also incentivizes entrepreneurial risk-taking and private investment in companies. From a private equity perspective, mid-sized Swiss companies become more profitable investments given the ability to retain more earnings rather than paying them all out in taxes each year. This enhances key metrics like IRRs over the investment period.
Winterberg Group’s Approach
Winterberg Group takes a hands-on approach to investing in mid-cap Swiss companies. The firm works closely with its portfolio companies to develop and implement growth strategies. Winterberg Group also provides its portfolio companies with access to its network of resources and expertise. Winterberg Group focuses on investing in mid-cap companies with strong growth potential. The firm has a proven track record of working closely with management teams to implement value-creation plans. Winterberg is a highly selective investor who typically invests in only a few companies annually. This allows the firm to focus its resources and expertise on helping its portfolio companies succeed.
„We believe that mid-cap Swiss companies offer the best combination of growth potential and downside protection,“ said Fabian Kroeher, Co-Founder and Executive Director of Winterberg Group. „These companies are typically at a stage of growth where they have a proven track record of profitability but still have significant potential for future growth.“
Final Words
Mid-cap Swiss private equity is a compelling asset class for investors seeking attractive returns. Several factors support the sector, including the strong performance of mid-cap Swiss companies, the increasing availability of capital and the growing expertise of Swiss private equity firms.
Winterberg Group is a leading mid-cap Swiss private equity firm with a strong track record of success. The firm’s investment strategy is focused on identifying and investing in well-managed mid-cap Swiss companies with a strong track record of profitability and growth potential. Fabian Kroeher believes that mid-cap Swiss private equity is a particularly attractive investment opportunity at the current time. „The Swiss economy is strong, and the country’s business environment is favorable to private equity investment.”, says Fabian Kroeher.
