SECA Yearbook 2008

S y E y C y A Swiss Private Equity & Corporate Finance Association

I. Report from the President 3

II. SECA, Switzerland and Private Equity 15

III. Chapters and Working Groups 27 Reporting Seed Money & Venture Capital 28 Reporting Private Equity 51 Reporting Corporate Finance 85 Reporting Legal & Tax 124

IV. Events and Trend Luncheons 133

V. Financial & Audit Report 143

VI. Membership Reporting 147 Full Members 149 Associate Members 275 Individual Members 331 Listed Private Equity Funds 335

VII. Articles of Associations 348

VIII. Swiss Limited Partnership Model Documentation 352

IX. Code of Conduct for Private Equity Investments 370

X. Code of Conduct for Corporate Finance Professionals 396

XI. National Associations 400

XII. Index of Persons 408

Print run: 2,500 examples Publisher: SECA – Swiss Private Equity & Corporate Finance Association, 6304 Zug, Switzerland Conception: Maurice Pedergnana ([email protected]) Editor-in-chief: Philipp Dialer ([email protected]) Support: Andrea Villiger ([email protected]), Nicolas Bürkler ([email protected]) Layout: more! than words, Gero Wierichs, 33607 Bielefeld, Germany (www.more-than-words.net) Cover: Atelier Mühlberg, 4052 Basel, Switzerland (www.atelier-muehlberg.ch) Print office: Druckerei Odermatt AG, Erich Keiser, 6383 Dallenwil, Switzerland (www.dod.ch) Pictures credits: www.pixelio.de, www.yotophoto.com

S E C A Swiss Private Equity & Corporate Finance Association

Report from the SECA Chairman

Dear Members and Readers

In 2007, the SECA Board and Management continued its efforts to foster the interests of the venture capital, private equity and corporate finance industry in Swit- zerland and to make SECA a strong platform for the activities of its members. Several new initiatives were started to this effect.

Swiss Environment The exuberant climate of 2006 in Private Equity and Corporate Finance continued in 2007, but as we now know, peaked in the summer months. The often over- heated conditions worldwide were generally not reflected in Switzerland and most SECA members profited from the overall good climate in the first half without experiencing to its full extent the painful abrupt changes which took place else- where in the second half. The traditionally very weak Swiss sector of early stage venture financing improved in 2007 thanks to high quality entrepreneurial activity, increased involvement of “Business Angels” and new Swiss initiatives such as the launch of the early stage Redalpine Venture Fund. SECA is well aware that filling the pipeline with high growth start up companies is a critical success factor for the future of the Swiss economy and is very involved in this area through its newly structured “Seed Money and Venture Capital” chapter. The increasing interest in, but often erroneous use of the term “Private Equity” by the press, some government officials and by consequence of other circles remained an area of concern. The “locust debate” (so-called “Heuschreckenplage”) started in Germany in 2006 originated from the erroneous use of the term “Private Equity” for transactions which were not at all classical private equity financings. Unfortunately, the increasing greed in the area of LBOs – an area which is often borderline to PE transactions – blurred the situation even further to include under the term “PE” any transaction involving an alternative financing fund such as hedge funds. Although Switzerland has been largely spared from excesses, the SECA leadership felt early 2007 that there was a need to engage in a discussion within SECA and its members on what is – and what is not – “Private Equity”. This internal clarification has led by the fall of 2007 to a position paper which enables SECA to clearly position itself in this area and to enable our association to unequivocally defend the interest of SECA members.

Yearbook 2008

SECA Position Paper on Private Equity The process to develop this paper represented a good training process in the way the organization set up in 2005 and implemented in 2006 should function, i.e. with an increased responsibility in forming opinions within each chapter. A first draft proposed by a small project group involving the Chairman and the leader of Communication and Private Equity was debated in the executive committee of the Board. The resulting modified draft was then discussed within each chapter of the Board and modifications included in a third draft. The latter was approved by the full Board and sent out to all SECA members for comments. The final version produced is being presented as a lead article in this year’s yearbook.

Business Angels Integration “Business Angels” (“BA”) have become an important element in the private equity “ecosystem” with regard to early stage financing. SECA’s aim is to mirror this ecosystem and hence provide a seamless platform for the servicing of the needs of growth companies from inception through growth to IPO or successful integration in the industrial tissue by a trade sale. With this aim in mind, extensive discussions with BA clubs were carried out in 2006. In 2007, our VC chapter was renamed “Seed Money & Venture Capital” and given the mission to seek the increased inclusion of BA’s as members of SECA with possibly representation in the Board of SECA. This initiative was successful and a merger with the “ASBAN – Association of Swiss Business Angels Networks” is being implemented. A leading BA has been nominated to the Board for election at the 2008 general assembly.

Swiss Limited Partnership After years of struggle towards this goal, the Swiss Limited Partnership („Kom- manditgesellschaft für kollektive Kapitalanlagen“) has been established by law in early 2007. SECA, under the leadership of the chapter head „Legal & Tax“ (Han- nes Glaus) was instrumental in the definition of a legal structure which will enable investors (Limited Partners) to establish their investments in Switzerland, i.e. a country with the highest standards in legal protection, while benefiting from the advantages previously available only in offshore vehicles. A year later we have unfortunately to go on record with a repetition of what we had stated a year ago: although the aspects governing the taxation of Limited Partners have been satisfactorily defined, those concerning the taxation of the General Partner are still unclear and the lack of positive interest to this topic by the government remains very worrying.

5 S E C A Swiss Private Equity & Corporate Finance Association

Switzerland as a domicile for the venture capital and private equity industry is in worldwide competition with other major (London, Luxembourg) and offshore financial centers. The aim for establishing the Swiss Limited Partnership when the reform was envisaged as, among others, to establish Switzerland as a financial center for PE and VC with a resulting positive impact for the Swiss economy. This effect will be nullified if the taxation issues will not be handled in a positive way to enable it to be competitive with London, Luxembourg, offshore centers etc. Such a result would not only be negative to the Swiss Private Equity industry, but also to the Swiss industrial tissue and innovation.

Coordination with EBK, SBVg, SFA and EFD As SECA matures and is being recognized as a Swiss institution, the need for coordination and cooperation with the Swiss Federal Banking Commission (EBK), the Swiss Bankers Association (SBVg), and the Swiss Fund Association (SFA) is becoming increasingly important. Important initiatives, a.o. in the area of taxation and regulation issues were started by the Chapter Legal & Tax under the lead of Hannes Glaus. Additionally, SECA was officially asked from the Federal Depart- ment of Finance (EFD) to send a SECA representative to the “Steuerungs- ausschuss Dialog Finanzplatz (STAFI)" for its working group “Private Equity & Hedge Funds” what we consider as very valuable.

Organization and Processes In 2007, we made further progress towards the goal defined in 2001 to evolve SECA “from a club to an institution”. The new organizational structure introduced in 2005 with two layers, the full Board set up in chapters each headed by a Chapter Head, with the Chapter Heads constituting the Executive Committee, has become operational. Membership of SECA has grown to a new record in 2007 with 266 members and a larger Board is more representative of the varying interests of our members, while the two-layer principle with a smaller executive committee enables faster decision processes.

The purpose of this new structure was also to better take care of the diversified interests of the different segments of the private equity industry’s “ecosystem” on a tactical and operational level, while unifying them along common goals at the strategic level. A further strong incentive for the new organization was to have a larger pool of qualified members involved in and contributing to the execution and also available for a succession planning process within the Board.

Yearbook 2008

In 2007, formalized processes for succession planning and for management by objectives were introduced, and used for the first time to define the goals and for 2008 within the chapters. The organization is now moving to a process of learning how to use and operate with these tools, but once this has been achieved we will be truly able to claim that we have achieved our goal for SECA to be a durable institution, contributing to the success of the PE/VC industry and of Switzerland’s economic future.

In 2007, the Board and executive committee were organized as follows:

Chairman

Massimo S. Lattmann

Communication General Secretary

Andreas Thommen Maurice Pedergnana

Chapter Chapter Chapter Chapter Seed Money & Venture Capital Private Equity Corporate Finance Legal & Tax

Christian Wenger Roberto Paganoni Beat Unternährer Hannes Glaus

Ulrich Florian *** Alexander Christophe Leonid Claudio Barbara Rudolf *** Geilinger Schweitzer Krebs Borer Baur Stef fenoni Brauchli Tschäni

Members of the Board of Directors:

Leonid Baur Sal. Oppenheim jr. & Cie. Corporate Finance (Switzerland) AG, Partner Christophe Borer Affentranger Associates SA, Entrepreneur in residence Barbara Brauchli PricewaterhouseCoopers AG, Partner Dr. Ulrich W. Geilinger HBM Partners AG, Board Member Dr. Hannes Glaus * Lustenberger Glaus & Partner Dr. Alexander Krebs Capvis Equity Partners AG, Partner/Chairman Dr. Massimo S. Lattmann ** Venture Partners AG, Partner/Chairman Dr. Roberto Paganoni * LGT Capital Partners AG, Partner/CEO Claudio Steffenoni Bank am Bellevue, Head Corporate Finance Andreas Thommen * Hirzel.Neef.Schmid.Konsulenten AG, Partner Beat Unternährer * The Corporate Finance Group AG, Partner Dr. Christian Wenger * Wenger Vieli Rechtsanwälte, Partner

* Members of the Executive Committee ** Chairman *** Nominated for election at the next General Assembly

7 S E C A Swiss Private Equity & Corporate Finance Association

Mr. Florian Schweitzer, founding partner with BrainsToVentures AG, and Dr. Rudolf Tschäni, lawyer and partner with Lenz & Staehelin, have been nominated for election to the Board at the next general assembly. Florian Schweitzer will be representative of the business angel community within the Seed Money and Venture Capital chapter and Rudolf Tschäni, as a leading M&A specialist, will contribute to the activities within the Legal & Tax chapter.

In 2007, the Executive Committee met six times and the full Board two times.

General Secretary The administrative support for the board was carried out by Prof. Dr. Maurice Pedergnana, Manager (General Secretary), Philipp Dialer (Project & Event Manager) and Andrea Villiger (Administration) as well as by the contribution of further employees at the IFZ Institute for Financial Services Zug (which is part of the Lucerne University of Applied Sciences and Arts).

The concept of installing the office of the General Secretary at the IFZ to enjoy from the resulting synergies was again confirmed in 2007. The substantial work carried out was compensated by an administration fee of CHF 151’716 (incl. VAT). This setup remains a cost-efficient solution for SECA and we thank the IFZ, Maurice Pedergnana and his team for their continued engagement.

Membership structure & fees A project group under the leadership of Beat Unternährer (Lead CF Chapter) made an analysis of the services rendered by the association to the different member categories (Full Member, Associate Member, Individual Member) and made recommendations to slightly modify these as well as the membership fees. These were adopted following a positive decision of the Board and by the General Assembly.

General Assembly 2007 The meeting was held on June 19, 2007. Apart from the statutory matters, the members voted on the revision of the bylaws to modify the membership fees. All items were approved unanimously. The bylaws are included in the sections VII. in this yearbook. Following the assembly, a SECA event in the form of a podium discussion with renowned and successful entrepreneurs was held on the theme “Success factors of innovative companies” (Erfolgsfaktoren innovativer Unternehmen).

Yearbook 2008

Events Several events were organized 2007 both in the form of evening roundtables and of SECA luncheons (for details please refer to the section IV). The process established to launch events since the introduction of the new organization is that it is the prerogative of each chapter to sponsor/organize a specific theme once a year but the proposal needs the approval of the executive committee. Organiza- tion support and execution is undertaken by the Secretary General’s administrative team. On December 10, the yearly Swiss Private Equity Conference was held in a new format and for the first time under the organizational leadership of SECA. The positive feedbacks have encouraged SECA to repeat this event on December 9, 2008, followed by the 1st Swiss Private Equity Night.

Cooperation with EVCA and NVCA SECA has had a tradition of having some of its members contribute to these entities. Until June 2007, this was mainly achieved through the participation of Dr. Roberto Paganoni and Hans van den Berg as EVCA Board of Directors. In June of 2007 Dr. Christian Wenger was elected to the EVCA Board. Other SECA members are engaged in EVCA committees. Further liaison work with the NVCA is undertaken by our General Secretary Maurice Pedergnana, especially in the field of PEREP.

Success Factors of innovative companies In 2007, I had the pleasure of publishing a book with the title “Erfolgsfaktoren innovativer Unternehmen” (NZZ Verlag). This book is based on a lecture I have been giving for 10 years at ETH Zürich and contains my personal observations and several case studies of recently successful companies, many financed with Venture Capital and Private Equity. I hope this will prove to be a contribution to the success of SECA, of our industry and of innovative companies.

9 S E C A Swiss Private Equity & Corporate Finance Association

Dr. Massimo S. Lattmann SECA Chairman

SECA Grafenauweg 10 Postfach 4332 6304 Zug

Chairman, Venture Partners AG & Redalpine Venture Partners AG Bodmerstrasse 7 Postfach 2166 8027 Zürich [email protected] +41 44 206 50 80

Yearbook 2008

Private Equity – Shaping Switzerland’s Future

Theses on Private Equity and SECA maxims

SECA has set itself the goal of showing the contribution that is being made by private equity and venture capital to the economic development of Switzerland and of firmly anchoring it in the awareness of Swiss opinion leaders. SECA, as industry association, wants to secure the interests of its members within the Swiss political scene, administration and the general public in the long term. As an industry association, SECA will not only demonstrate the economic contribution of private equity to the media and opinion leaders, as well as industry representatives, but it will also explain the mechanisms of private equity and – just as important – differentiate the private equity industry from other forms of investment. It is necessary to embed the economic significance of the entrepreneurial character of private equity investments and the seriousness of the industry with Swiss decision makers, and to simultaneously sharpen the awareness of need for quality within the industry. SECA intends to position itself more strongly in the public discussion and also have an effect on the general economic and legal conditions through a “requirements checklist for political action”.

When is Private Equity really Private Equity? To be heard in public discussion it is necessary first to define the terminology, for example the question of when private equity is really private equity. As a rule, SECA understands private equity to be holdings in private companies and investments in unlisted companies. Investments in listed companies are private equity investments only if privatisation or de-listing is intended. In companies financed by private equity, there is traditionally a high congruence of interests between owners and management. Private equity investments have the goal of raising the company value by increasing the company performance (innovations, market development, optimisation of company processes, management performance). Private equity thus supports not only shareholder value, but stakeholder value as well. Because of this, congruent of interests and active shareholder base, private equity financed companies have an excellent corporate governance.

11 S E C A Swiss Private Equity & Corporate Finance Association

An indispensable contribution to the economy Private equity makes an indispensible contribution to the economic development enabling break-throughs in a company’s growth potential through innovative product and market development. It also often creates specially qualified jobs, and not only contributes sound solutions for succession of entrepreneurial ownership, but also contributes to preserving qualified jobs. At the macro level, private equity promotes competitive company structures and thereby speeds up the adaptability of Switzerland in world markets. In addition, private equity investments and private equity asset management create new successful companies in the traditionally strong Swiss financial sector.

Entrepreneurs for entrepreneurs Private equity investments are typically designed for the medium and long-term. They provide support in all phases of the company, which could mean venture capital in the start-up phase or the development phase. It also means financing growth or completing a company cycle with a management buyout. Private equity investors support company growth and management not only through financial means, but also with entrepreneurial support, making their industry knowledge available, for example by sharing experience for strategic development or by mediating an entry into markets.

Private equity as an established and secure investment class also offers undispu- table benefits to traditional investors. Private equity investments are shares with institutional rights. As an established investment class, private equity offers pension funds and other institutional investors and private parties the possibility to invest in unlisted companies, with the positive side effect of also supporting economic development.

Transparency helps differentiation Especially in public discussions that are not dominated by specialists, it is important to differentiate private equity from other forms of investment, for example from hedge funds (without defaming other investment categories). The ideal properties type of private equity, such as long-term company interests or investments in unlisted companies, should be put in the foreground. Even if many private equity investors also manage hedge funds, the two investment categories have little in common.

SECA thus wants to position and differentiate private equity and the private equity industry in the public eye and support the creation of favourable general, political 12

Yearbook 2008

and economic conditions for the Private Equity industry. Along with transparent representation of private equity investments, SECA is promoting transparency of the business habits of its members in addition to promoting the image of the industry.

Exploiting opportunities through profiling At the operational level, and as a prerequisite for PR work, SECA has also set itself the goal of making an inventory of private equity activities in Switzerland together with EVCA on an anonymous basis, and to make the data available to the market and the public as evidence of the significance of private equity in Switzerland. Practically speaking, creating an inventory involves a great deal of administrative and financial effort. In addition, some resistance is given to the collection of data, which must be overcome in the interest of transparency.

SECA wants to use the opportunities that result from having a clear profile and a proactive public discussion in the interest of its members. By approving the code of conduct in 2006, SECA has laid the foundation for the Swiss private equity industry for high acceptance and broader support from politics, government and industry in Switzerland. This will ultimately benefit the effective and sustainable development of the Swiss industry and financial centre.

Dr. Massimo S. Lattmann Venture Partners AG SECA Chairman Bodmerstrasse 7 Postfach 2166 8027 Zurich [email protected]

Andreas Thommen Hirzel. Neef. Schmid. Konsulenten AG Member of Executive Board of SECA Gottfried Keller-Strasse 7 8024 Zurich [email protected]

13 We are a group of people who look on ourselves as something like a financial first aid club. We actively search for companies who limp along and do not grow satisfactorily. We look at what ails them, then invigorate them by taking over part or all of the assets, give them an infusion of money and advice and see them and us prosper. If it is necessary, we will divest parts of the company that seem superfluous to us. To BUY OUT a company, we use our own money and borrow it temporarily. Numerous studies have shown that what is called PRIVATE EQUITY is far more profitable than any other investment form.

There are also bright young ideas that yearn to materialize in the form of start-up companies. In this world of tighter credits, we can help them by providing funds and know-how that others will not. Our VENTURE CAPITAL companies perform significantly better than average companies.

Please get in contact with us!

SECA & its 270 members

( )% $&" ' S E C A Swiss Private Equity & Corporate Finance Association

SECA, Switzerland and Private Equity

Drawing the attention leads to research output Almost every day the media announce trailblazing deals which set new records in terms of size or structure in the private equity industry. Some funny people may call the architects of such deals ‘locusts’. Maybe they are terrified at the prospect of losing power or traditional cosiness. Others see the great potential of busting up old networks and reshaping companies by better value-based management. We can give an inside view for serious researchers who are interested in the long- term impact of private equity and corporate finance activities.

The unparalleled media coverage and the intense public spotlight on such deals have been amplified in recent months. It is understood that the ongoing discussion and daily news articles draw the attention of students and young researchers all over the world, including in Switzerland. Swiss universities do not focus their attention on private equity yet. But since it is a hot issue nowadays, we try to help with information.

By its very nature, SECA is considered the #1 business association for corporate financing in Switzerland. We get several enquiries every week from ambitious students who work on a doctoral, master or bachelor thesis. SECA with its Board and General Secretary staff encourages those initiatives and coach the enquiring researchers when their research projects are worthwhile: with a clear output and an added value to the ecosystem.

We want to challenge the pre- and misconceptions surrounding the industry, separating it distinctively from other alternative asset enterprises. Venture capital and private equity contribute to making (human and financial) capital markets more efficient. They may make some passive corporate business managers more pro-active, and they provide visions, results and returns to investors, employees and pension funds. Private equity is the most critical source of capital for inven- tors, for start-up and developing businesses. The private equity sector strengthens the competitiveness of companies in the global marketplace.

We want to initiate a study looking at Swiss companies and analyzing the performance of venture capital by VC respectively PE investors over an average period of a few years. We expect that venture capital backed companies (VC companies) perform significantly better than benchmark companies. VC compa-

Yearbook 2008

nies' revenue grew by 20 percent in neighbouring countries, while the benchmark companies' revenue grew by 5 percent. VC companies employed 10 percent more people over that period, compared to only one percent of the benchmark companies. We also want to look at the profits generated by divestments of the VC companies.

Participating at PEREP analytics When it comes to industry data, we have to admit that our tiny country is not a perfect object of research. EVCA provides the most relevant and accurate industry statistics on fundraising, investments, divestments and performance. Switzerland is just part of the relevant European market, and therefore it is absolutely necessary to look at European reference data to draw any conclusions about the ecosystem of venture capital and private equity in Europe and its competitiveness on a global level. With Andrea Villiger, secretary and research assistant at the SECA, we participate in the PEREP analytics exercise in 2008 under the lead of Mirela Ene, head of research at the European Venture Capital Association (EVCA). Please look at the website of the EVCA statistics unit (www.perepanalytics.eu) to learn about this effort for more research & statistics information on the private equity scene in Europe, focussing on fundraising, investment and divestment.

Our SECA publication series was enriched past year by two more books: The Notion of Change in Leadership Cultures (Dr. Søren Bjønness) Hybride und mezzanine Finanzierungsinstrumente (Christoph Banik, Matthias Ogg, Maurice Pedergnana)

You may purchase the books through our SECA website. You can find a lot of information both in depth and breadth about SECA, private equity and corporate finance topics in Switzerland divided into our chapters and “Inside SECA”. If you missed an SECA event or need to re-read a SECA eNewsletter, you will find everything online! Are you interested in future events? Look for SECA-related events and get a discount on normal registration fees. Or do you want to search our member database for potential clients or suppliers? On www.seca.ch you get the answers!

17 8" ( ;' "% ' ! % 8! - % %'$ "( (*' + ' '$ F ! $%*:-@ $ :-F@W $ " $ ! 2 *'( D ! $&" ' ( $&" ' !! 4FW " LMW *( ((( !! ' @-:W"(%( $ "2 !%" " 4:-W ( )%FFW 5 ' "F ( $( % ; '"$ " ( )%R ! % ! J" ! 5 ' " $ " ! .*" " %%(' % 3 " " %2 "4

( 9.1 ( )%2"!D5 %%' ! 4 ="% %! !( %$'(*D ?( % !$ ( !% "$"! % $ &" '! $ ( )%( !&" "'#" 8" " . %("( 8=! % "% $'(*=% "! ,$ %$ '

( .1 5 '2"!D5 %%' ! 4 ! '"%* %% '" '"! ;$ "?( %"( %'3.F2 # D3.4((* ( "' % ', $,!" $ ! % 8" ?( % " @ ! " ' % 7 ! J 3T ' "! 5 : ("%% * *"+ "% " 5 32(((" ! 4 ( ! " + " M ' ;U % $ % " % 7 ! 2 % 7 !N$! 4% ( ' % .! # * ( )% ("%% * ' * "$ %% $%"! M R % " (* ( ( % $ ' * U

FL S E C A Swiss Private Equity & Corporate Finance Association

I also like to thank Philipp Dialer, an active and concerned SECA project & event manager, Nicolas Bürkler for his support in SECA research efforts, and especially Andrea Villiger, the efficient, compassionate and warmhearted head of the SECA administration.

Get involved and contribute to transparency As the future promises a huge growth for private equity in Switzerland, it is necessary that SECA as a business association appear more prominently in public. We need the support and education of the media. We also strongly advocate improvements to the venture capital, private equity and corporate finance environment in Switzerland. And we notice with satisfaction the growing interest of pension funds and other institutional investors as well as many family offices in venture capital & private equity funds. We believe our policies to be essential for the economy's recovery.

Now is the time for our members to get involved and commit themselves to SECA Codes of Conduct in your daily business and take every opportunity to speak in a transparent way about what you are doing. It takes a while to be recognized.

You can help SECA to grow in terms of members: Encourage your network to be part of our association and to join us! Personal talks convince best.

We compiled some extraordinary articles about the latest developments and initiatives from our members and associated partners in Switzerland.

Please enjoy the reading!

Maurice Pedergnana General Secretary, Ph. D.

SECA Grafenauweg 10 Postfach 4332 6304 Zug [email protected]

Yearbook 2008

The company and its location

The state as a shopping centre for investors Those who have gone shopping in America know the somewhat uncomfortable feeling of probably having paid too much. You are surrounded by people who are accustomed to shopping locally there, and no matter what product is of interest to them, they have a seemingly endless stock of coupons, rebate stamps or elec- tronically generated credit notes which are extracted with difficulty from an over- flowing billfold and brandished at the salesperson in support of a price significantly below the one shown on the label. You find yourself wondering whether you really did pay enough attention to all those brochures, advertising mail-shots and invitations to one or other kind of event from which you could surely have gathered the same ammunition to beat down the price. The cash you handed over for those strawberries from pesticide-free cultivation was exactly equal to the price shown on the display, and as you walk towards your car, your appetite for them begins to fade. But it gets worse. Over there, on the other side of the car-park, is a competing shopping mall with a huge poster above its doors, advertising the same biologically uncorrupted strawberries at half the price! Driven by the rising emotion of anger, your imagination squashes your bright red and now provably overpriced strawberries into jelly.

You are no doubt wondering what this rather petty everyday experience for a consumer has to do with questions of location. Experienced investors, entrepreneurs, advisors and location promoters know only too well that the same behaviour and the same rules of expedience apply when the location for a business or a new residence is being evaluated. To put it another way, market circumstances exist where the benefits created match, to the extent possible, the demands made of a location. Public authorities in Switzerland and abroad and at all levels (mu- nicipality, local region and the state itself) adopt a behaviour similar to that of a shopping centre in order to attract new customers, i.e. investors. There is a wealth of ideas which flow into creating promotional instruments with tax-money. They appear mostly in the form of direct support for individual businesses, loans at cheap interest rates, subsidised construction land, partial reimbursement of construction costs, educational contributions, à fonds perdu amounts for each workplace created, tax relief all the way to tax exemption, generous deductibility of expenses on tax returns, granting of mandates to carry out public authority projects and a whole number of other incentives. However, the institutions run by the state only have limited availability of those kinds of instruments and make use

21 S E C A Swiss Private Equity & Corporate Finance Association

of them to a very differing degree. It is interesting to note that particularly in Germany and its federal states, direct financial aid to individual companies, aggregated at billions of Deutschmarks and then Euros over the entire country, has been known for a very long time. The author recalls reading about a company that was thinking of setting up in a specific state in Germany and was given the assurance of an interest-free loan of one million Deutschmarks for every workplace.

It should be emphasized that in this article the behaviour of that kind by public authorities is meant not to be judged, and certainly not to be criticised. It is merely a question of portraying the facts and drawing the conclusion that this behaviour has arisen from a tough competitive situation in favour of greater prosperity for local economies as a whole. Seen from a Swiss point of view, it follows that the current allegation from the EU with regard to privileged taxation is seen by the Swiss people not so much as a legal or a moral argument but far more a political instrument being applied by the competition.

State debts are investments or tomorrow's taxes Although the operational and - at least in part - strategic management of a company tends to react to short or medium-term assessments of the framework circumstances under the impression of what happens on an everyday basis, it would be important to examine whether the environment sought after and currently provided by a location can continue to develop positively in the future. One must question whether the package presented by the public authorities - the set of all the location factors - can also be guaranteed in the long term and keep pace with the improvements offered by other locations. Do public authorities really have the political and financial clout to ensure the framework conditions for long periods of time, or are they simply putting out the bait for a while so that they can cash in later once the fish is on the hook? Public authorities can reduce their income or enter into expenditure to improve the attractiveness of the location and guarantee prosperity for the local economy for the future. The resources released in this way represent an investment in the best possible sense. But if those resources fail to improve the attractiveness, the same public authorities are going to find themselves in the trap of indebtedness. In the absence of available finance, the infrastructure and the other framework conditions are going to suffer sooner rather than later. State debt forces higher revenues in the form of taxes and charges of every kind.

Yearbook 2008

The example also set by the Canton of Zug decades ago, when it was one of the poorer regions, has recently appeared to be succeeding in the Canton of Obwal- den, too. Despite an unchanged need of finance, Obwalden enacted massive cuts in the tax rates and decided to live with the possibility of debt for a while. The aim was to enhance the attractiveness of the location in such a way that, as a priority, the strong tax-payers would be retained in the canton and, in the medium term, others would be able to relocate there from other places. What could not be expected was that the pay-back would come so quickly and compensate for the reduced tax rates. That is undoubtedly also attributable to the very robust economy.

Low taxes as THE criterion for shortlisting in the evaluation of locations The many years of experience gathered by the Office for Economy and Labour, which is responsible for economic promotion of the internationally very competitive Canton of Zug in terms of taxation, illustrates that fiscal conditions are decisive in most relocation projects for whether a location is shortlisted or not. In other words, the main criterion is fulfilled within an acceptable bandwidth and the location is included in a shortlist of two to five potential candidates. What then follows is a whole number of other factors which are not individually crucial but are nevertheless decisive in deciding between various possible locations. In a survey carried out in 2003 by Arthur D. Little, the factors are shown with the weighting which is largely decisive for deciding in favour of a location for a holding company (see figure 1).

Corporate tax advantages 88% Qualified managers 72% Quality of life 69% Central location 62% Support of authorities 55% Personal preference of CEO 50% International managers 48% International schools 37% Language skills 35% Labor flexibility (no unions, Hire and Fire) 35% Ease of attracting top managers 31% High purchasing power 25% High education 22% Attractive personal taxes 19% Image of the country 17% Labor availability 17% Proximity to existing production site 10%

Figure 1: Most important criteria used by companies for the selection of headquarters location Source: Arthur D. Little, Survey 2003.

23 S E C A Swiss Private Equity & Corporate Finance Association

For a company involved in high technology, the sequence and weighting of the criteria would be different. A company of that kind has a different profile of requirements. In highly developed economic regions, as demonstrated by the example of Zug, the production costs are forcibly higher than in emerging nations. Consequently, companies have to rely on higher creation of value and a strong level of innovation. They select the location not only on the basis of taxation factors but, more particularly, on the availability of highly qualified specialist staff. That availability can be measured by the educational level of the local population, the willingness of people to commute locally or from further away and the attraction for foreign people and their families to move into the area in which the company is based. There is thus a demand for a whole number of location factors such as institutes of education and research, cross-regional and international access, quality of life, international schools for the children, an open-minded attitude towards people from other nations and many other criteria.

Expatriates are specialists who move in temporarily from abroad. They often have special employment contracts from the companies which hire them. Mandatory charges such as taxes and social security contributions are often taken over by the employer. It is therefore also in the interests of the company to establish where those expatriates have their residential domicile and how private individuals are taxed there. In the final analysis, the taxes payable by private individuals form part of the direct production costs.

The Centre for European Economic Research (ZEW) carried out a comparison of very different regions under the mandate of BAK Basel Economics and published the BAK Taxation Index in December 2007. It shows, in the form of an index, the average effective tax burden on a company compared with the costs of a company for highly qualified manpower which should still have EUR 100,000 available (see figure 2).

Yearbook 2008

Effective tax burden of companies of tax burden Effective

Effective tax burden of highly qualified manpower

Figure 2: Most important criteria used by companies for the selection of headquarters location. Average of included Swiss cantons = 100. Source: BAK Basel Economics, Zentrum für Europäische Wirtschaftsforschung ZEW, 2007.

Conclusion: The chain is only as strong as its weakest link Taxes are important and represent the true door-opener. They enable a location to be included in the closest circle of candidates. But what good is that if another location takes preference? Every company has its own requirements profile, comprised of widely varying criteria particular to its own kind of business and ranging all the way to very personal needs.

To use the analogy at the beginning of this article, a company will go shopping all over the place in order to negotiate the best possible terms. Only the location which, perhaps with a few additional incentives, can best serve that profile will succeed in providing the company with its new home. The challenge for public authorities is to achieve the highest possible level of attractiveness in most of the location criteria. The Location Quality Indicator published by Credit Suisse 2007 attempts to do just that, distilling a number of individual criteria into five main categories and then drawing a comparison between the location quality offered by the cantons (see figure 3).

25 S E C A Swiss Private Equity & Corporate Finance Association

3.0 Location quality indicator 2007 ZG Criteria: 2.5 - Tax burden on natural persons ZH 2.0 - Tax burden on entities - General level of education 1.5 - Availability of highly qualified manpower NW - Transport-system based accessibility 1.0 OW SZ GE AG TG BS AR 0.5 SH AI SO BL VD 0.0 LU BE -0.5 TI GL SG VS FR GR -1.0 NE UR -1.5 JU Figure 3: Swiss cantons in comparison. Source: Credit Suisse Group 2007.

Each of the individual location factors can be easily copied. But it is ultimately the totality of all the qualities of a location and, last but not least, the mentality of those who live and work there (the population, public authorities and administrators as well as private service providers) which generate a USP (Unique Selling Proposi- tion) and make the location genuinely unique.

Dr. Bernhard Neidhart Amt für Wirtschaft und Arbeit Head of the Department for Economy & Aabachstrasse 5 Labour of the Canton Zug Postfach 6301 Zug [email protected]

=* 5" S E C A Swiss Private Equity & Corporate Finance Association

Reporting Seed Money & Venture Capital

CTI Invest – Five years ago… …in May 2003, CTI Invest was founded by Swiss investors with the aim to become the leading financing platform for Swiss high tech companies. At that time the Swiss venture capital scene was very fragmented. We believe that in the meantime we have contributed to the better integration of all relevant players in this important ecosystem for our country.

The number of the new investor members joining our platform was significant in 2007 and reflects the recognition and visibility achieved by the work of CTI Invest. Moreover we see a continuation of new member registration in early 2008 (see table 1 for a full list as of today).

Domestic Institutional Foreign Institutional Business Angels

ABSF Consulting GmbH 3i Deutschland Gero Bauknecht aventic partners Atlas Venture Nicolas Berg BEKB Banexi Venture Partners Philip Bodmer BiomedInvest Baytech Venture Pierre Comte BV Group Doughty Hanson & Co GmbH Hans Däpp Constellation Schweiz AG Draper Investment Jürg Meier Core Capital Partners AG Earlybird Peter Ohnemus DEFI Gestion Emertec Gregory P. Priddy Eclosion Go Beyond Ltd. Hans Sassenburg EPS Value Plus AG I-Source Gestion Peter Schmid ErfindungsVerwertung AG Iris Capital Herbert Steinbach Fongit Seed Invest SA NBGI Ventures Lucian Wagner Hasler Stiftung SHS Tübingen Michael Watts Invision Private Equity AG Siemens Venture Christian Wenger Jade Invest SA Sofinnova Logitech Europe SA Swarraton Partners New Value Target Partners Nextech Ventures TVM Capital GmbH Novartis Venture Fund Wellington Partners Group Polytech Ventures Redalpine Venture Partners AG Business Angel Clubs STI Stiftung Business Angels Schweiz (BAS) Swisscom AG Start Angels Network Technopark Luzern VI Partners AG Vinci Capital Zürcher Kantonalbank ZKB Table 1: Member list

Yearbook 2008

In 2007, the number of Swiss high tech companies that were presented to the investor members at the four Swiss Venture Days at the SWX in Zurich increased to 23. Furthermore all these company pitches were made available on our web- page through our video podcasting service to all members.

Most of the presented investment cases where out of the Swiss coaching program CTI Start-up and almost three quarters of them were spin-offs from ETH Zurich or EPF Lausanne.

At the Venture Days of Swiss Technology in Munich and Stuttgart (July 2007), 14 Swiss high tech companies were introduced to foreign investors.

The resulting financing volume regarding the presented companies at our events shows an increased interest and appreciation of Swiss high tech companies and reached approximately a cumulated volume of CHF 140 Mio. (estimated by CTI Invest).

An overview of the achievements is given here: 60 Investor members 25 Venture Days (20 in Switzerland, 6 abroad) 4 CEO Days (always more than 200 participants) 120 Swiss High Tech companies presented 45 Video Podcast of companies (started in mid 2006) ½ got financed (by members and/or third parties) Approx. CHF 140 Mio. financing volume (since 2003) 35 % BLS, 42 % ICT, 8 % Micro/Nano, 15 % Interdis.

The most important networking event of CTI Invest, the fourth CEO Day, attracted again more than 230 participants, mainly CEOs of Swiss high tech start-ups.

The best practice workshops offered by our members and sponsors, the presentation of the success story of Endoart and the closing panel discussion with Venture Capitalists were highly appreciated.

29 S E C A Swiss Private Equity & Corporate Finance Association

At the annual general assembly (March 2008) the existing CTI Invest board, with Dr. Christian Wenger as chairman, was enhanced with the following personalities:

Dr. Rudolf Gygax, Managing Director Novartis Venture Fund Dominique Mégret, Head Venturing Swisscom

The following board members resigned: Dr. Jürg Meier, to have more time for his family since his retirement Dr. Thomas Hinderling, CEO CSEM, to focus on the development of CSEM Jean-Pierre Vuilleumier, for Corporate Governance reasons

Besides the annual membership fee of the investor members, CTI Invest is benefiting from the sponsoring of well known Swiss institutions and companies. Due to the efforts and services presented to investors and sponsors, the following pleasant development can be noted (see table 2 for an overview): KTI/CTI as Innovation Promotion Agency of Switzerland and premium partner is buying services from CTI Invest to support the Swiss high tech companies following the CTI Start-up coaching program. Swisscom upgraded from Gold to Premium Partner New Value upgraded form Silver to Gold Sponsor More negotiations with potential sponsors under way

Premium Partners Gold-Sponsors Silver-Sponsors

Table 2: Sponsors

Yearbook 2008

CTI Invest was also involved in the Swiss Television project Start-up during 2007 and is actively supporting the Venture 2008 business plan competition, an event co-organized by McKinsey and ETH Zurich. In addition, CTI Invest plans to strengthen further the ecosystem of Swiss high tech companies by launching the Alumni organization. All companies that once presented to CTI Invest investors are part of it and will benefit from special events.

We are looking forward to the next challenging year and also specially to the first Swiss Private Equity Night in December 2008 (for all events see table 3).

Matchmaking Events Where Date 21st Swiss Venture Day SWX Zurich 4.6.2008 22nd Swiss Venture Day SWX Zurich 3.9.2008 23rd Swiss Venture Day SWX Zurich 9.12.2008 Venture Day Suisse Romande Lausanne/Geneva Nov 2008 4th Venture Day of Swiss Technology Munich 10.7.2008

Networking Events Where Date 5th CEO Day BEA Berne 10.09.2008 Alumni Events (1-2) tbd tbd 1st Swiss Private Equity Night tbd 9.12.2008 Table 3: Events 2008

Dr. Christian Wenger Wenger & Vieli Rechtsanwälte Chairman CTI Invest Dufourstrasse 56 Postfach 1285 8034 Zurich [email protected]

Jean-Pierre Vuilleumier CTI Invest Managing Director CTI Invest Seehofstrasse 6 8008 Zurich [email protected]

31 S E C A Swiss Private Equity & Corporate Finance Association

Objectives 2008 - Chapter Seed Money & Venture Capital

Activities & Outcome 2007 Last year’s ASBAN activities in association with the SECA started with the successful and quite highly-attended “Angel-Investors & VC Event” taking place at the hotel Widder in April. Following this seminar, two “Private Investor Academy” conferences were organised respectively in Crans Montana and Bad Ragaz in partnership with ASBAN and BrainsToVentures AG (b-to-v). Subsequently, the decision was taken to merge ASBAN’s assets and all its activities into SECA and profit as soon as possible from this positive joining of forces. As first activity of the Business-Angel Section within the SECA, the “Supporter of the Year 2007” distinction was awarded to the Ingrid E. Deltenre and Alexander Mazzara, key drivers for the documentary series “Start-up” at SF Schweizer Fernsehen.

Objectives 2008 The objectives defined by the Business-Angel Section at the SECA for the year 2008 will start by the remake of the Chapter Seed Money & Venture Capital in the website. Further, an important milestone will be the organisation of a major Business-Angel event, bringing this central stakeholder group together with VCs and creating industry-specific work groups. Besides this, an important goal for the year 2008 will be to generate a positive echo in the press through an attractive and high-quality “Business-Angel of the Year” award.

Other important objectives for the coming year include the publication of a “standard termsheet”, lobbying in Bern concerning the fiscal status of Business-Angels and possibly the organisation of another “Private Investor Academy”.

Actions 2008 The significant actions needed to be accomplished in the coming year are most importantly the integration of all of ASBAN’s activities in the hitherto existing Chapter, as well as the assignment of responsibilities and the enumeration of concrete tasks and deadlines for each objective by the end of the first trimester.

Florian Schweitzer BrainsToVentures AG Partner Blumenaustrasse 36 Postfach 142 9004 St. Gallen [email protected]

Yearbook 2008

5 Questions to ASBAN

What is ASBAN? ASBAN is the Association of Swiss Business Angels Networks, and was officially founded in 2003. It has set itself the objectives of representing the interests of Switzerland’s Business Angel community, promoting their activities, extending Switzerland’s existing Business Angel basis, supporting young entrepreneurs as well as networking and developing strong contacts with international Business Angels associations.

What’s the success story behind ASBAN? ASBAN and its history have always been essentially based on its ability to unam- biguously define what a Business Angel is and what is not, on its capacity to have defined and held a small, simple and uncomplicated structure, as well as on its clear rules for inter-club deals.

Why did ASBAN decide to join the SECA Chapter Seed Money & Venture Capital and what do you expect from this membership? ASBAN joined the SECA Chapter Seed Money & Venture Capital in order to ensure a close relationship between Business Angels and venture capital firms and to cultivate the symbiosis between these two stakeholders, improving returns for both by working together closely, lobbying and launching PR activities for the industry. Indeed, an acceleration in the professionalisation of the Business Angel and VC industry, as well as the creation of a brighter media coverage is deeply needed, and consequently constitutes our major expectation from joining the SECA.

What’s your opinion about the Swiss business angel culture? Today we see the Swiss Business Angel industry as much suffering from poor visibility, mainly for cultural and possibly tax reasons.

What is your vision for the next 10 years in the Business-Angel Industry in Switzerland? We hope to see more successful entrepreneurs becoming Angel Investors after having sold their business in the next ten years, and this not only in high-tech but in other industries as well like services. In our opinion, the medtech and food industries could benefit from a comparative advantage here in Switzerland, an advantage that will hopefully be much more strongly capitalised on in a close future. Furthermore, it is our belief that in order to think big, the Swiss Business Angels will gain much more if they open up minds by doing cross-border deals with trusted partners in Asia or in the U.S. for example, and thus better support start- ups in various markets.

The questions were answered by Florian Schweitzer.

33 S E C A Swiss Private Equity & Corporate Finance Association

venture kick – kick start your high-tech business

What is venture kick? University research sometimes leads to business ideas which have the potential to be put into practice. But it’s difficult or almost impossible to find the seed money for the very first steps. The private initiative venture kick seeks to close this gap by supporting promising business ideas with a grant of up to 130,000 CHF.

With this seed money, entrepreneurs can finance the further development of their business projects and launch their start-up. venture kick requires no payback and takes no equity. Furthermore, the entrepreneurs receive not only money but also the professional support of experienced start-up experts and the opportunity to attend 2 days working boost camps. venture kick is driven by the ambitious vision to double the number of spin-offs at Swiss academic institutions, to accelerate the process of starting a business, and to make start-ups more attractive to professional investors.

From the business idea to the start-up company in nine months venture kick advances the projects step by step over three stages. Each stage ends with a presentation in front of a top-class jury made up of investors, entrepreneurs and technology experts. venture pitch (stage 1): 10,000 CHF for a brilliant business idea: The application describes a vision and a clear idea of how the participants intend to earn money from their research project. Those with the most exciting business ideas are invited to a personal presentation in front of a jury. venture case (stage 2): 20,000 CHF for a solid business case: In the three months following the first presentation, the entrepreneurs work on their business idea, identify initial customers and strategic partners, gather feedback and work out a convincing investors pitch. venture kick (stage 3): 100,000 CHF for a start-up. Six months after stage 2, the company is ready to be founded and to start business activities. A convincing business plan has been written, a team formed and the intellectual property is secured. To get the final grant of 100,000 CHF, all that remains is to convince a jury again. The grants are given under the condition that they are used exclusively for the purposes of business development.

Yearbook 2008

How to get the kick venture kick is looking for entrepreneurial scientists with promising business ideas who want to transform their research results into products, companies and jobs. To participate in the venture kick initiative applicants have to fulfill the following requirements: be registered at a Swiss academic institution (Swiss Federal Institute of Tech- nology, university or university of applied sciences) as a student, postgraduate, post-doc, assistant, research assistant or professor. have a concrete business idea based on the results of their research. All disciplines are welcome. want to establish their future start-up company in Switzerland. have not yet started a company and have not yet received any venture capital funding.

Entrepreneurial scientists or research teams who want to participate need simply fill out the registration form on www.venturekick.ch.

Promoting entrepreneurial culture and success in Switzerland venture kick is financed by a group of private donators who wish to promote entrepreneurial culture and entrepreneurial success in Switzerland. Three major foundations have supported the venture kick initiative so far: The GEBERT RÜF STIFTUNG, the ERNST GÖHNER STIFTUNG and the OPO STIFTUNG.

The initiative itself had a kick start. Since the launch in September 2007, no less than 29 entrepreneurs have been granted a total amount of 510,000 CHF. For 2008, two million CHF are ready to be invested in about 50 start-up projects.

To achieve our ambitious goal of doubling the number of spin-off companies, we need more resources in future. That’s why venture kick is looking for additional small or large donations from foundations, organizations and individuals wishing to participate in a key project for Switzerland.

For more information: www.venturekick.ch

Beat Schillig venture kick Co-Director c/o IFJ Institut für Jungunternehmen Kirchlistrasse 1 9010 St. Gallen [email protected]

Yearbook 2008

venture kick: some supported business ideas (descriptions by the project-authors)

Virtamed Preclin Ventures Virtamed will improve the quality of health Co-Founder: Ben Marsland care by providing virtual reality based sur- Preclin Ventures utilizes physiologically gical simulators. The prototype for hyste- relevant disease models to assess in vivo roscopic interventions developed at our generated human protein-specific antibo- institute delivers unprecedented fidelity dies from its preclinical pipeline and provi- and has been received with enthusiasm des a customized fee-for-service to test by surgeons. therapeutics from external Biotech companies.

Stefan Tuchschmid, ETH Zürich Dr. Bettina Ernst, ETH Zurich [email protected] [email protected] iNoCs Inno-Motion iNoCs is aimed at serving the needs of si- Inno-Motion AG uses medicine and neu- licon vendors. In today’s integrated chips, roscience as the basis for designing pro- which are becoming more and more com- ducts, interfaces and processes. Our core plex, the internal interconnection is beco- project is about revolutionizing seating: ming a serious design problem. We li- There are two things we know about cense cutting-edge, patented technology seats: They are ubiquitous, and they can to tackle this challenge, thus letting manu- cause discomfort and even health pro- facturers keep innovating and integrating blems. Based on our knowledge about the more computing power into their designs. human brain and body, we developed and tested a novel seating concept that is good for you and makes you happy. Federico Angiolini, EPF Lausanne, Università di Bologna Dr. Patrik Künzler, MIT/ ETH [email protected] [email protected]

Zurich Instruments Poken™ Zurich Instruments’ mission is to develop The project is capturing the future of the and sell a new generation of digital lock-in instant lottery industry. A technological amplifiers that replaces its analog precur- revolution is looming in the instant lottery sors. The digital core of the lock-in ampli- industry, as incumbents struggle to find fier allows for increased performance (i.e, the right appeal for Generation X and Mil- one Zurich Instruments lock-in amplifier lennium. Though the lottery industry is still can be used instead of four analog mo- experiencing strong growth worldwide, it is dels) and 50% decrease of manufacturing based mostly on the Baby Boomer gen- costs. Our customers work in electrical eration. Poken™ is a new electronic gam- engineering, physics, electrochemistry, ing device that will bridge the generational bioelectronics, radar and communication gap and ensure new growth opportunities R&D. for the Instant lottery industry in years to come.

Sadik Hafizovic, ETH Zurich Stéphane Doutriaux, IMD Lausanne [email protected] [email protected]

37 S E C A Swiss Private Equity & Corporate Finance Association

RouteRank KeyLemon Current independent travel planning is The main idea of our business project is to time-consuming, tedious and often leads provide innovative and convenient servi- to suboptimal results. routeRANK is a soft- ces based on biometric identity authenti- ware tool at the heart of an easy-to-use cation, currently only applied to expensive website that efficiently finds and ranks the high security applications. best possible travel routes.

Dr. Yann Rodriguez, Dr. Jochen Mundinger, EPF Lausanne IDIAP Research Institute Martigny [email protected] [email protected] Optotune Delta Robotics A new technology based on electro active Delta Robotics develops a new Solid polymer actuators enables the implemen- Freeform Fabrication technology allowing tation of an inexpensive, scalable, precise- the manufacturing of bioinductive biocom- ly focus tunable lens. The patented tech- patible bone substitutes offering an opti- nology facilitates optical zoom and auto- mal alternative to autologous bone substi- focus without the use of complicated me- tutes. Combining an innovative scaffold chanical positioning mechanisms. There- manufacturing technology and bioinduc- fore a compact, light-weight, robust im- tive materials based on bone morphoge- plementation of a wide range of optical netic proteins, this technology offers new systems is possible. Application examples opportunities for fast regenerative medi- are digital cameras, mobile phone came- cine. ras, web cams, binoculars, industrial & Each year more as one a half million ske- medical imaging. The technology has the letal defects caused by any kind of trau- potential to replace state-of-the-art glass ma, tumor, birth malformation need bone and plastic lenses and can even enable substitutes. The market potential for an al- new applications. Additionally, it is possi- ternative to autologous bone substitutes is ble to implement other continuously tuna- estimated to $1.5 billion/year. Delta Robo- ble optical elements such as diffraction tics customers are world leading compa- gratings, phase shifters or mirrors based nies in the field of trauma, dental and or- on the same technology. thopedics surgery.

Marc Thurner, Dr. Manuel Aschwanden, ETH Zürich University of Applied Science Biel [email protected] [email protected]

Yearbook 2008

Survey on Corporate Venturing in Switzerland

A recently conducted survey of the Institute for Financial Services Zug IFZ of the University of Applied Science, Lucerne (Dr. C. Wunderlin, R. Bernhard) in cooperation with SECA analysed Corporate Venturing activities in the Swiss market. Of 147 responding SWX-listed Swiss non-financial companies, 37 companies (25% of the responding companies) stated to be active in corporate venturing.

Types of Corporate Venturing Corporate venturing is defined as the shareholding or contractual / financial collaboration of a big company (parent company) with a smaller and more dynamic company, often a start-up company. Corporate venturing is undertaken out of strategic and / or financial reasons and appears in four different types: 1. either by taking a passive minority position in outside businesses (through corporate venture capital), 2. by taking an active interest in an outside company, 3. by starting a new business as a stand-alone unit, or 4. by creating a new business inside the existing firm with a structure allowing for full management independence (internal corporate venturing). Scope of the study are the types 2 and 3 (strategic, external corporate venturing).

Reasons for Corporate Venturing If strategic reasons are behind a corporate venture investment, then the parent company typically pursues corporate venturing as an alternative to their traditional growth methods. The parent company wants to access and develop technology, research and experts of the smaller company with the goal to expand and diversify its core business into new products and markets. The smaller company has a reasonably autonomous management team and separate human resource policies which help the parent company developing its new ideas in a more rapid manner and without interfering bureaucratic controls, compared to internal business development. Often corporate venturing is started by the parent company with the goal to find “breakthrough technologies” that could substantially change the industry (e.g. Nespresso).

Risks of Corporate Venturing Corporate venturing is not a simple challenge. Risks in regard to feasibility, time consuming development, changing market needs and misfit with the overall strategy cause a lot of parent companies to close their corporate ventures after a short time. Although the decision to undertake corporate venturing is a long-term

39 S E C A Swiss Private Equity & Corporate Finance Association

and strategic commitment, the activity in corporate venturing appears, similar to the one in private equity industry, in cycles. As mentioned, corporate venturing is an alternative to traditional methods of growing a company. It is, therefore, a strategic and often secret issue, not meant to be detectable by outsiders. The study aimed at providing a general overview of the activities in the Swiss Market, which was non-existent before.

Results of the survey The survey was conducted from August until November 2007 among all SWX – listed companies headquartered in Switzerland and excluding corporations operating in the financial industry. This was done as their core businesses com- prise shareholding in other companies out of financial reasons.

Participating Companies 200

175

150 16

125 37

100

75 175 147

50 110

0 Total 175 SWX Companies 163 Answers 147 Core Survey (CH Headquarter & non-Financials) with CV activity not interested

Figure 1: Participating companies, data according to survey.

Of all companies contacted, 37 companies (25%) confirmed corporate venturing activity. In terms of industry, it is most frequent in “Chemical and Pharma industry” (24%), followed by “Electronic & Electrical Equipment” (22%) and Industrial Engineering (11%).

Yearbook 2008

Industry of Companies active in Corporate Venturing 10 24% 22% 8

6 11% 4 8% 8% 5% 5% 5% 5% 2 3% 3% 0 Media Electricity Real Estate Materials Construction & Food producersFood Equipment Household GoodsHousehold Transportation & General industrials General Telecommunication Chemicals & Pharma Industrial Engineering Electronic & Electrical Electrical & Electronic

Figure 2: Industry of CV Companies, classification according to NOGA 02 codes (BFS), Survey-data.

Size of companies with Corporate Venture activities Establishing new corporate venture projects requires a lot of resources, time and commitment of the parent company. Usually only big companies want and can spend these efforts. The survey though unveiled that companies with 50 to 500 employees are similarly active in Corporate Venturing.

Size of Companies active in Corporate Venturing

6 12 11

# CV-companies 9 4

2 4 1 0 up to 50 50 - 499 500 - 999 1000-4999 > 5000 No. of employees

Figure 3: Size of CV-Companies, # of employees acc. to internet research and Handelszeitung 2005.

41 S E C A Swiss Private Equity & Corporate Finance Association

Rising popularity of Corporate Venturing since 2003 Corporate venturing shows a pro-cyclical tendency. Asking for increased activity since 2003, 73% of the companies with Corporate Venturing activities stated that they increased the amount of invested capital since 2003. As a next step in 2008 the survey will focus on case studies in order to identify success factors for corporate venturing in Switzerland. In addition the collaboration of parent companies with private equity funds is a further object for analysis within the scope of this conjoint survey of the IFZ and the SECA.

René Bernhard Hochschule Luzern – Wirtschaft Research Assistant / Workshop manager Institut für Finanzdienstleistungen Zug IFZ Grafenauweg 10 Postfach 4332 6304 Zug [email protected]

Yearbook 2008

Private Biotech Financing Remains Strong

During 2007, the public biotech companies listed on the SWX could not repeat their excellent performance from the previous year: On average, Swiss biotech stocks declined by about 15% during 2007, after a plus of 34% in 2006. Despite weak stock market performance, Switzerland held its position as a premier biotech location and continued to attract an over-proportional amount of capital for private biotech companies. With a less receptive IPO market, more corporate deals including M&A and trade sales are expected during 2008.

While nobody expected that the strong performance of listed biotech stocks during 2006 could be repeated in 2007, the overall decline of Swiss biotech stocks by about 15% was clearly disappointing. Especially some less mature, smaller capitalized biotech companies such as Arpida, Cytos, Bioxell or newly listed Addex saw substantial declines in stock prices. The two larger capitalized stocks, Actelion (-2.9%) and Basilea (+3.5%), held up better.

IPO activity during 2007 was weak as well: Only two biotech companies, Addex and Italy-based Cosmo, achieved a new listing on the Swiss Exchange. Due to the generally lackluster performance of recently listed biotechs, we expect that investors, at least for a while, will not have much appetite for new issues and the “IPO window” therefore will be closed except for the most mature companies with marketed products (or product that are close to approval).

The good news is, that Switzerland remained one of the European “hot spots” for private financings: During 2007 10 biotech and emerging pharma companies raised more then CHF 10 million. This number was substantially higher then in 2006 and also compares very favourably with larger countries such as Germany, France or the UK.

Number of private biotech & pharma financings in 2007 with an amount greater then Country CHF >10 million (or EUR >6 million)

Switzerland 10 Germany 7 France 8 United Kingdom 4 Source: VentureSource Database.

43 S E C A Swiss Private Equity & Corporate Finance Association

The largest deal during the year was the expansion financing of PharmaSwiss, a company with substantial pharma presence in Eastern Europe. More typical larger venture rounds during, where the financings of PregLem (drug development women’s health), Pevion Biotech (vaccines), Nitec Pharma (anti-inflammatory diseases) and Molecular Partners (development of antibody-like proteins).

Foreign venture groups invested substantially into some of the larger deals demonstrating the attractiveness of Swiss Biotech to the investment community. Sofinnova Partners (PregLem, GlycoVaxyn), NGN Capital (Nitec Pharma) and Advent Ventures (4-Antibody) were some of the major foreign investors. Also Swiss investment houses participated actively during 2007 such as BB Biotech, BZ Bank, Biomedinvest, Global Life Sciences, Index Ventures, HBM BioVentures and the Novartis Venture Fund.

With its traditionally strong pharma industry, its large pool of pharma/biotech scientists and managers, its liberal tax and labour laws, Switzerland remains one of the best places in Europe to start and finance new biotech or speciality pharma companies. European and US venture capitalist have recognized that and are becoming more active in our country.

The general economic outlook for 2008 is uncertain and biotech companies might have less financing options going forward. Entrepreneurs and investors therefore should stick to the rule that “quality” is more important then “quantity” (in terms of numbers of companies founded or financed). Excellence and critical mass in all aspects such as product pipeline, management expertise, clinical development know-how and also investor base will become even more important.

Dr. Ulrich Geilinger HBM Partners AG Bundesplatz 1 6300 Zug [email protected]

Yearbook 2008

Wake Up and Smell the Green

A lot has changed since we launched what has now become one of the leading global clean technology venture capital funds. It was 1999 and the venture capital industry in North America was growing out of control in the midst of dot.com euphoria. Venture financing was plentiful and it seemed that anyone with a half- baked idea for an Internet business could attract investment from the glut of new funds appearing daily.

At a time when start-up companies where being conceived and funded over breakfast in Silicon Valley, concern over environmental issues was mostly left to extremists, the former US Vice President, Al Gore, and a small group of pioneer- ing venture capitalists. Our investment team at Emerald Technology Ventures are far from extremists but we believed early on that significant market opportunities would emerge for companies developing solutions to ease the growing demands being placed on our environment.

We started our Swiss-based venture firm at a time when the term cleantech didn’t exist and we ourselves referred to our investment theme as sustainability focused. Unfortunately this term was often confused with Socially Responsible Investing (SRI) which was perceived to be less focused on financial return and more focused on social good. For many institutional investors, our poorly defined sector was not seen as capable of providing venture grade returns and not surprisingly many of our early investors were not pure financial players.

To address the magnitude of the investment possibilities within the cleantech sector and to refine our own investment thesis we decided from the start to hire in- house technology specialists at Emerald. Our working definition for cleantech eventually landed on energy, water and advanced materials and we have remained focused on these core areas for over seven years. The Emerald team was certainly one of the first dedicated cleantech investors in Europe and we were among a small handful of specialized venture funds in North America. The greatest challenge we faced was to change the fact that we were an emerging fund manager in an emerging sector with no demonstrable success stories.

Today, climate change and global warming are hot topics which are finally being taken seriously by governments, corporations and consumers around the world. Some of the most recent data on the severity of climate change is staggering but

45 S E C A Swiss Private Equity & Corporate Finance Association

we are also not alarmists. As venture capitalists, we are optimists and we believe that like all other great challenges faced by humankind we will prevail. This is a challenge which has been created by us and can be solved by us using technological ingenuity and entrepreneurialism.

In some respects the cleantech sector is similar to the technology revolution that occurred in the 1980s and 1990s in telecommunication and the information technology sectors. It offers the promise of rapidly changing market dynamics and the ability to generate significant wealth quickly. However, in other respects the cleantech sector is very different. For one, the magnitudes of the markets are substantially larger. Energy is a trillion dollar business. But perhaps above all else, the greatest difference from the telecom and IT boom is the urgency of the problems that cleantech is trying to solve. Our impact on the planet is undeniable and the consequences for not altering our behavior are unacceptable. It may be that venture capitalists created some of the most successful internet companies over breakfast in California but its time that we all wake up and smell the green.

Emerald Technology Ventures is a global leader in cleantech venture capital. Founded in 2000 under the name SAM Private Equity, Emerald is a pioneer in this rapidly emerging sector and is focused on innovative technologies in energy, advanced materials and water. From offices in Zurich, Switzerland and Montreal, Canada, Emerald manages three venture capital funds and two venture capital portfolio mandates totaling over EUR 300 million (USD 440 million). Emerald is currently investing out of its latest fund and is looking for energetic and passionate entrepreneurs with the vision to build world-class clean technology companies.

For more information please visit www.emerald-ventures.com.

Gina Domanig Emerald Technology Ventures Managing Partner Seefeldstrasse 215 8008 Zurich Switzerland [email protected]

Scott MacDonald Emerald Technology Ventures Partner 300, rue du Saint-Sacrement, Suite 425 Montréal, Quebec H2Y 1X4 Canada [email protected]

Yearbook 2008

Web investing: Mediaclipping lets you find TV clips

Bremen based Red-Herring-100-finalist Mediaclipping indexes TV clips faster than a general-purpose search engine such as Google is spidering text-articles. Read the background report on Swiss early-stage investor Redalpine’s first lead investment.

Let’s get the key message across straight away: Yes, Redalpine is still investing in revolutionary internet start-ups. No other sector is able to generate millions of real dollar value that quickly, yet requiring only a moderate capital to start. Web 2.0 isn’t bubble 2.0 yet, as long as a start-up offers a truly disruptive user benefit, ease of use, a comprehensive business model and a strong team behind it. Additionally, Redalpine Venture Partners provide network, market access, team members or co-investors through actual or former portfolio companies such as Xing, StudiVZ, Plazes, HitFlip, Smava, Bab.la, Kyte, GenevaLogic, restorm or Quevita.

Who is the “next Google” for rich media? Leading pioneers of Web 2.0 (social web, user-generated content) were the auction platform Ebay and search-engine Google. The latter not only dominates search but also other segmens such as Video-sharing (Youtube), Document- sharing (Docs, Groups), Geo-mapping (Maps) and Online-advertising (Adwords). Hence, at Redalpine we have asked ourselves which search segments Google hasn’t yet covered satisfyingly. We have identified several vertical search topics such as travel, jobs, real estate and above all the area of multimedia. Rich media such as TV, radio and video claim a higher share of the consumers’ time with more emotional effect than print and text-based online media. Nevertheless, search for movies works still like a text search. Today, uploaders, “archivists” or viewers provide the clips with search words (key word indexing, tagging), resulting in an incomplete description of the content. A complete real time indexing of the soundtrack will cover all words broadcasted, and furthermore, such an automated solution is much faster, cheaper, and more comprehensive than traditional TV clipping.

Mediaclipping – monitoring broadcasted content Bremen based Mediaclipping developed precisely such a solution that provides «speaker-independent real time speech-to-text» indexing an unlimited amount of broadcasted channels. Redalpine sourced the deal through a former investment

47 S E C A Swiss Private Equity & Corporate Finance Association

partner who has learned to appreciate our way of working. Mediaclipping’s groundbreaking technology opens up several business models. The B2B case was obvious: A rich media clipping service for corporate customers as well as advertising and PR agencies according to the model of Argus for print media.

After having set up a satellite-stream of about 100 German speaking TV and radio channels, Mediaclipping persuaded customers such as Deutsche Bahn, WestLB, and BMW to monitor the TV and radio presence of their managers, topics, brands and competitors.

Example 1: Marketing managers and consultants may monitor how often their brands are mentioned in radio and TV compared to competitors and related to specific advertising or PR efforts.

Example 2: A railway company would like to know how often key words such as “strike” are used on TV in connection with the company or CEO in the past (archive) or from now on (search agent).

Example 3: The R&D or PR department wants to know how often key words such as “climate change”, “CO2 emission” and “hybrid” are used in connection to specific German or Japanese car manufacturers.

Example 4: Before a transfer negotiation the technical director of a football club wants to know how often “Diego” was mentioned now and before. In addition he would like to know the rough distribution between positive and negative coverage. Modern semantic search tools automatically recognize fine differences such as “Beckham misses penalty” and “Beckham converts penalty”.

The young Bremen start-up already won several relevant awards: Recently it was nominated as a Red Herring 100 finalist 2008, and before it was finalist a Finan- cial Time Deutschland’s start-up contest as well as winner of the Berlin IP-TV Award 2007.

Users prefer targeted online ads Mediaclipping is planning to expand into additional markets: The separate B2C platform spactor.com allows additional revenues from online advertising. Other language versions are an option already now from a technical point of view. And a pilot project with a video platform will test the first context-sensitive ad server insertions for rich media. 48

Yearbook 2008

An ad banner on top of a video clip showing a forest fire is context-sensitive if the video-platform’s ad server automatically shows advertisings for fire extinguishers or insurances by first priority and avoids banners for flame-throwers or camping equipment.

Some classic ad server systems accept either spreading losses as seen in general interest print media. Others try to avoid the principle of indiscriminate all- around distribution and react on user generated search words (e.g. Google adwords, Youtube, SBB.ch) or suitable user profiles on social networking platforms (e.g. Xing, Facebook). As discussed above, there are huge market and application opportunities for Mediaclipping’s speech-to-text system. Let me add a few remarks on the underlying technology.

Speech-to-text finally hits the market Already as early as in the mid 90ies leading ICT corporations such as Apple, AT&T and IBM were convinced that a break-through of their speech recognition solutions was imminent. Also Microsoft founder Bill Gates was confident in 1995 that within five years every mobile phone, PC and car would respond to free speech commands. But for most users these visions are still not visible on “The Road Ahead”.

On the one hand, technical challenges and required processing power were underestimated, there were big differences with regard to dialects, vocabulary, voice and surrounding noises. On the other hand, the suppliers met acceptance problems caused by annoying training and calibration exercises, while Apple users carried on clicking rather than shouting commands at their Mac. Aside from early-occupied niches such as dictating lawyers, dentists or radiologists, and apart from phone tapping spies, up to now the speech recognition market was growing rather slowly. Therefore we don’t see many players left in this sector. Until Media- clipping was founded in 2006, only one British-American supplier and a start-up spun off from IBM occupied the promising niche of speaker independent real time speech-to-text solutions.

Mediaclipping combines base technology from a supplier and open sources with their own proprietary technology. As the core item of its solution, the Bremen company developed the “intelligent Small Language Model Tool” (iSL). The iSL- tool adapts the system to new linguistic creations that suddenly evolve such as “bird flu”, “Bundeskanzlerin” (female form of Federal Chancellor in German) or “blogosphere”. However, it also sorts out terms that are not frequently used

49 S E C A Swiss Private Equity & Corporate Finance Association

anymore – in general or in a certain context – such as “dainty damsel” or “floppy disk”. In other words: In the first place it’s the iSL-tool that turns speech recognition into a powerful, slim and agile application.

Through this mechanism the company derived a popular by-product, Mediaclip- ping’s words of the week, a chart of the most often broadcasted words. In the first week of April 2008, common words such as “money”, “Euro”, “world” and “people” topped the list again, edging out more special hit list words of previous weeks such as “locomotive driver’s strike” and “Liechtenstein foundation”.

“Googeln” was ennobled as a new word by German encyclopaedia Duden in 2006, but Google wasn’t amused due to IPR reasons. It will be exciting to observe whether Mediaclipping’s own favourite term “I clipped you” will become as popular one day as “I googled you”.

Redalpine’s Portfolio Redalpine Capital I was started in August 2007 and has up to now (April 08) excuted three investments. Deal-flow from all over Europe is high and of excellent quality. Several term sheets might be closed soon.

Mediaclipping – monitoring rich media identifies video and audio clips based on real time indexing of the soundtrack. For the first time we can measure the effect of marketing activities by monitoring radio and TV fast, low cost and in a comprehensive way. The Bremen start-up won the Berlin IP-TV Award 2007 and is a Red-Herring-100-finalist in 2008. First customers were Deutsche Bahn, WestLB and BMW.

Restorm.com – the music econosphere provides an international platform for bands and their fans. The Zurich start-up is a mash-up of social network and music video platform that addresses the so called «long tail» of the music industry. Other important players such as journalist, media, DJs, event organiser, ticketing agencies, venues and merchandisers are integrated.

Quevita.com – love your life is your personal Web cockpit where you find tailor-made support to live a healthier and beautiful life. The Zurich start-up is a mash-up of diagnostic tools and trackers, social network and marketplace. Check-ups, events, coaches, mentors and peers help you to implement your New Year’s resolutions about better food, mood and moves your way and in a pleasant way.

Nicolas Berg Redalpine Venture Partners AG Entrepreneur, Business Angel, Trainer Chasseralstrasse 1-9 4900 Langenthal [email protected]

Yearbook 2008

Reporting Private Equity

Introduction From a globally investing and operating fund-of-funds managers’ perspective, 2007 can be remembered as a record year in terms of private equity performance, mainly in the buyout market segment, fund sizes raised and LBO-transactions closed (mega deals). However, many investors will also remember 2007 as the year of the credit crunch (US subprime mortage crisis), which has caused a lot of press coverage. In the given environment of mixed market sentiment, topics such as the valuation of underlying funds and portfolio monitoring have become increasingly important for fund-of-funds managers.

Fund sizes, transaction sizes The demand by institutional investors across the globe to invest in private equity funds had further increased in 2007 compared to prior year. Fund managers have benefited from the high appetite and raised record funds in terms of size during 2007 (i.e. Blackstone raised USD 22 billion in its fifth fund). Obtaining access to the top quartile private equity funds has become increasingly difficult for limited partners. When it comes to new funds raised, access is often limited to fund-of- funds who had previously invested with the respective fund managers and enjoy a very good reputation in the market. Providing access to the best fund managers in the world is one of the key competitive advantages of a fund-of-funds manager.

The favourable market environment for M&A transactions prior to the credit crunch and the record amounts of capital available for new private equity investments had translated into many mega transactions that closed in 2007 (i.e. TXU’s transaction value amounted to USD 49 billion).

Performance Private equity funds and consequently fund-of-funds, except for young portfolios still facing the “J-curve” effect, have generally performed exceptionally well in 2007. The outstanding performance is attributable to a period of virtually ideal market and economic conditions, which are not expected to be sustainable. Throughout 2007, M&A markets remained buoyant, growth in both established and emerging economies continued as predicted, credit markets stabilized thanks to prompt intervention by central banks and private equity owned businesses performed, in many cases, above plan. Strong corporate earnings throughout 2007 continued to sustain the growth of the private equity industry. Ideal divest-

51 S E C A Swiss Private Equity & Corporate Finance Association

ment conditions, fuelled by high levels of corporate M&A activity, increasing purchase multiples and benign financing conditions allowed many partnerships to successfully exit portfolio companies during the year. Initial public offerings from private equity sponsored companies increased in 2007. The many exits and IPOs (Initial Public Offerings) in 2007 have translated into exceptionally high realized and unrealized gains for funds and fund-of-funds.

Impact of credit crunch on private equity Press coverage of the private equity industry focused on “hung” mega-deals when debt financing (leverage) was limited, withdrawn or simply unavailable. Once plentiful liquidity was in, the credit markets suddenly became a scarce commodity.

As the impact of the credit crisis continues to work its way through the global economy, conditions in the mega- and (although to a lesser extent) large buyout segments of the private equity market have been particularly affected. Risk premiums factored into debt financing (leverage) have increased and resulted in higher debt servicing costs and a corresponding decrease in free cash flows, while a simultaneous reduction in appetite to supply debt has left many mega- deals unable to secure financing on their initial budgeted terms or in some cases, simply unable to close.

8.0 7.0

6.0 5.7 5.7 5.4 5.3 5.4

4.7 4.8 4.2 4.6 4.1 4.0 4.0 Multiple

2.0

- 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1/07 Q2/07

Large LBOs Historical corridor [between 4.5 and 5.45]

Figure 1: Average debt to EBITDA multiples in large buyout segment (1997 - Q2/2007). Source: Standard & Poor's.

Yearbook 2008

When it comes to the small and middle market buyout segments, the recent buoyancy might continue as cash rich companies remain focused on acquisitive growth. In this specific market segments, banks are still providing debt, however at less favourable terms and conditions as prior to the credit crunch. This situation translates into private equity funds using less leverage when financing new transactions.

Figure 1 and 2 summarize the average debt to EBITDA multiples, that were paid in large and middle market LBO transactions from year 1997 to Q2/2007. The historical average was only surpassed in the first half of 2007. Leverage was less aggressively applied in middle market as opposed to large LBOs. The middle market segment of the buyout market, together with small buyouts, represents the “bred and butter” part of buyout transactions. It will be less affected by the impacts of the credit crunch (e.g. lower interest burden, less dependable on refinancing).

8.0

6.2 6.0 4.8 4.7 4.6 5.1 4.7 4.1 4.2 4.0 3.9 4.0 3.8 3.4 Multiple

2.0

- 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1/07 Q2/07

Middle Market LBOs Historical corridor [between 3.8 and 5.05]

Figure 2: Average debt to EBITDA multiples in middle market segment (1997 - Q2/2007). Source: Standard & Poor's.

Events in the US subprime mortgage market have clearly an impact on the general credit environment and created uncertainty in financial markets leading to negative performance in public equities.

53 S E C A Swiss Private Equity & Corporate Finance Association

It is anticipated that distributions and realized gains paid by private equity funds to its limited partners (e.g. fund-of-funds) will slow down during 2008 as: (i) refinancing opportunities decline due to decreased liquidity in credit markets; (ii) decreasing valuations of public equities make exits through initial public offerings less attractive; and (iii) depressed public equity pricing negatively impacts the pricing and consequently the exit prospects of privately held companies. Restricted exit opportunities and decreased public equity pricing will result in reduced valuations of the unrealized portfolio investments (funds).

On the investment side, the credit crunch has actually helped to cool off an M&A market that was in danger of overheating. The increases in terms of average purchase multiples of LBO-transactions and especially debt to EBITDA multiples (see figure 3) is likely to drop to more sustainable levels.

10.0 9.1 8.8 8.8 8.3 7.9 8.0 7.3 7.0 7.0 6.7 5.7 6.0 4.7 5.4 5.5 4.9 4.2 4.0 4.6 4.1 4.0 Multiple

2.0 3.6 3.4 3.3 3.4 2.8 2.6 3.0 2.7 3.0

- 1999 2000 2001 2002 2003 2004 2005 2006 2007 Equity Debt Figure 3: Average purchase multiples of LBO-transactions (1999 - 2007). Source: Standard & Poor's.

The credit crunch has also created new investment opportunities, especially in the market segment of distressed and turnaround related investments. Decreasing entry valuations might represent good investment opportunities for young vintage year funds (i.e. vintage years 2007 and 2008).

Yearbook 2008

4.0 3.5 3.5 3.4 3.3 3.0 3.0 2.8

2.4 2.2 2.2 2.2 2.0 2.0 1.9 2.1 2.0 2.0 1.9 1.8 Multiple 1.7 1.7 1.6

1.0

0.0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Vintage year Top quartile Average Figure 4: US buyout: top quartile- and average TV/PI multiples (1985 - 1994). Source: Thomson Financial.

Good private equity fund managers can add value to portfolio companies and limited partners through all economical cycles, even in an environment such as dominated by the credit crunch. To illustrate this thesis, figure 4 reports the top quartile- and average TV/PI multiples of US buyout funds representing vintage years 1985 to 1994. This period was featured by e.g. the savings and loan crisis as well as the worst recession after the war. Despite of these two crises, US buyout managers were able to achieve significant positive returns.

Valuation and monitoring of private equity funds

Introduction In the given environment of mixed market sentiment, topics such as the valuation of underlying funds and portfolio monitoring have become increasingly important for managers of fund-of-funds. IFRS rules, which many fund-of-funds managers in Switzerland have adapted as their reporting and accounting standards (e.g. listed fund-of-funds), require private equity investments to be “fairly valued”. This requirement has a significant impact on how managers value their fund-of-funds portfolios.

55 S E C A Swiss Private Equity & Corporate Finance Association

“Roll-forward” valuations Managers of fund-of-funds typically value the underlying funds based on the latest available valuations from the underlying funds and adjust these reported valuations for the cash flows occurring between the date of the latest available reported valuation and the balance sheet date of the fund-of-funds. This valuation method is also referred to as “roll-forward” valuation. At year end (the closing date) the valuations of underlying funds within a fund-of-funds are typically based on reported valuations at 30 September (the date of the latest available reported valuation).

Valuation adjustments / significant events If the year end closing is based on roll-forward valuations, the “fair value” principle as stipulated by IAS 39 requires fund-of-funds managers / administrators to consider any material differences, which result from the underlying funds using accounting principles other than IFRS and any significant events which could have a material impact on the latest available reported valuation and occur between: (i) the date of the latest available reported fund valuation (i.e. typically 30 Septem- ber); and (ii) the date when the year end financial statements are closed (e.g. in the course of January / February).

Significant events could include situations like: (i) a fund manager has sold an investment at a higher price compared to the price reflected in the latest available reported valuation; (ii) the stock price of a publicly listed portfolio company is significantly higher or lower at year end as compared to the latest available reported valuation; (iii) a company was listed and the market price differs significantly from the latest available reported valuation; (iv) the latest available reported valuation clearly differs from market comparables; and (v) a necessary write-down in relation to unsatisfactory financial performance of a portfolio company has not been reflected in the latest available reported valuation.

It is important that fund-of-funds managers monitor their portfolios with regard to significant valuation related events throughout the year and not only do so with the focus on year end closing. The procedure as described above is therefore applicable throughout the year.

If the impact of such a significant event is material in relation to the valuation of a fund and/or the net asset value of the fund-of-funds, the fund-of-funds manager should adjust the reported valuation accordingly (“fair value” adjustment). Under IFRS 7, “fair value” adjustments need to be disclosed. The respective disclosure, 56

Yearbook 2008

which is part of the notes to the annual audited financial statements, includes the amount of the total adjustment made and the parameters applied (e.g. range of EBITDA multiples used in relation to the enterprise valuations) to calculate the valuation adjustment.

Adjustments also need to be made when a fund manager keeps his investments at cost for more than one to two years after the investments were made and the fund-of-funds manager, after a careful analysis of the underlying investments, is of the opinion that the reported valuation is materially different than the actual (“fair”) value. This is typically the case when the fund manager uses local accounting standards which stipulate the valuation of investments at the lower of cost or net realizable value.

Private equity guidelines and organizations When valuing their fund investments, private equity fund-of-funds managers typically base their valuation on the information provided by the fund managers. There are various private equity related guidelines in place, which, in addition to applicable accounting rules, shall facilitate the valuation of funds by fund-of-funds managers.

Europe: EVCA / IFRS When it comes to fund reporting and the valuation of portfolio companies, there are two relevant guidelines, which were both issued by EVCA (European Private Equity & Venture Capital Association) and associated organizations: (i) the EVCA Reporting Guidelines, which became effective in June 2006; and (ii) the Interna- tional Private Equity and Venture Capital Valuation Guidelines (“IPEVCVG”), which became effective in January 2007. The latter was jointly developed by EVCA, AFIC (Association Française des Invéstisseurs en Capital) and BVCA (British Venture Capital Association). IPEVCVG describe the valuation of portfolio companies and are, with a few exceptions (e.g. IFRS allows no discount on public stocks, even if there is a lock-up), in line with the “fair value” principle as stipulated by IFRS. The EVCA Reporting Guidelines refer to IPEVCVG when it comes to the “fair valuation” of portfolio companies.

The latest EVCA reporting guidelines and IPEVCVG (together the “EVCA Guide- lines”) have contributed to significantly improving the reporting of Europe-based, but also Asia-based (there are more and more Asia-based funds applying EVCA guidelines), funds to its limited partners. The issuing of these guidelines was a milestone in terms of private equity reporting. This improvement is not only

57 S E C A Swiss Private Equity & Corporate Finance Association

attributable to the guidelines but also to some “pressure” asserted by limited partners, mostly representing institutional investors. Such limited partners, many of whom apply IFRS, have high requirements when it comes to transparency, speed of reporting and obtaining “fair values”. Reporting from underlying funds must facilitate the needs of institutional investors’ own reporting and “fair value” process.

Fund managers can apply the EVCA Guidelines voluntarily. There is no law or regulation in any jurisdiction requiring private equity funds to apply the EVCA Guidelines. However, it adds a lot of creditability to both private equity fund managers and to the whole private equity industry if fund managers do so voluntarily. In order to further increase the number of funds applying the EVCA Guide- lines, fund-of-funds managers should strive to include a respective clause in the limited partnership agreement or amend existing limited partnership agreements accordingly. Reporting is - together with good performance - the fund managers’ “business card”.

North America: PEIGG / US GAAP There are two private equity related organizations in North America, the US Private Equity Industry Guidelines Group (“PEIGG”) and the National Venture Capital Association (“NVCA”). NVCA has ceased to produce own guidelines and has, since 2005, recommended its members to meet the guidelines published by the PEIGG. The latter focuses on the valuation of portfolio companies and has issued the US Private Equity Valuation Guidelines (“PEVG”), which are in line with US GAAP (e.g. “fair value” principle). The latest guidelines were published in March 2007.

On 15 November 2007 the US GAAP standard FAS 157 (Fair Value Measure- ments), clearly stipulating “fair values”, became effective.

Comparison IFRS / US GAAP and IPEVCVG (EVCA) / PEIGG and impact on fund-of-funds As far as the “fair value” principle is concerned, the two accounting guidelines IFRS and US GAAP, as well as the private equity guidelines IPEVCVG and PEVG, have become very close. Without going much into detail, examples of some remaining differences are summarized in the following table:

Yearbook 2008

IFRS IPEVCVG US GAAP PEIGG “Fair value” yes yes yes yes concept: hierarchy of Valuation any appropriate any appropriate methods to be same as US GAAP method: method method applied Discount on If lock-up if formal trading if lock-up no public stocks: (up to 20%) restriction (up to 30%) M2m valuation between bid and closing or of public bid price bid price ask bid price stocks: arrears of 25%, Write-downs: not described 0% to 100% not described 50%, 75%, 100%

The EVCA Guidelines meet the respective needs of institutional limited partners. In the US, the guidelines issued by the PEIGG focus on the valuation of portfolio holdings and do not provide additional reporting guidelines. As opposed to fund managers applying the EVCA Guidelines, US fund managers do not mention in their reporting to limited partners whether they apply the US Private Equity Valua- tion Guidelines, or not. In order to understand the valuation method applied by a US fund manager (e.g. “fair value” according to FAS 115, tax basis, cost basis, or as stipulated in the limited partnership agreement), a limited partner must carefully read the audited financial statements and/or the limited partnership agreement, which detail the valuation method applied. In other words, till now one could not automatically conclude that a US fund is valued “fairly”. This unsatisfying situation will change, as soon as all US fund managers will have adapted FAS 157 in the course of 2008.

The recent development and improvement of the above mentioned guidelines, especially the fact that EVCA Guidelines and the US Private Equity Valuation Guidelines, on the one hand, and both IFRS and US GAAP on the other hand, have a similar definition of “fair values”, is beneficial to the “fair value” process of fund-of-funds managers. Looking into the future, it would be beneficial for the global private equity industry if US funds would also consider applying the EVCA Guidelines (as far as not infringing with US GAAP). The EVCA Guidelines would be well suited to serve as a global private equity standard when it comes to reporting and the valuation of underlying portfolio companies.

New disclosure requirements as stipulated by IFRS 7 Fund-of-funds applying IFRS have to add additional disclosures in their year end 2007 financial statements. These changes are triggered by IFRS 7 (Financial

59 S E C A Swiss Private Equity & Corporate Finance Association

Instruments: Disclosures) requiring a description and analysis (e.g. sensitivity analysis) of potential impacts of risks, such as market price risk, currency risk, interest rate risk, liquidity risk and credit risk. The goal of the additional disclosure requirements is to provide more detailed information about risk management.

Conclusion It is a constant challenge to make sure that any potential events having a material impact on the funds’ valuations can be identified and reflected in the financial statements of a fund-of-funds on a timely basis. Especially in the current market environment, fund-of-funds managers have to make sure that their financial “navigation and warning” systems work properly and effectively.

Summary and market outlook The demand to invest in the private equity asset class has been further increasing, also in 2007. Despite the record fund sizes raised, securing access to top quartile fund managers has become increasingly difficult. Fund-of-funds managers who can provide its investors access to the best private equity funds in the world have a clear competitive advantage.

2007 was a year with exceptionally ideal private equity market and economic conditions. This favourable environment, which is not expected to be sustainable, has translated into high returns, especially for mature funds and fund-of-funds.

The credit crunch has negatively impacted the market sentiment and will have an influence on private equity performance, especially on the mega buyout market segment. Market developments cannot be timed. In order to produce good returns for fund-of-funds’ investors, it is of utmost importance to: (i) apply a very structured and disciplined fund investment selection process; (ii) enter into new commitments across each upcoming vintage year; and (iii) broadly diversify the fund- of-funds’ portfolio with regard to investment stage, currency exposure, industrial focus and geographical focus. An experienced and disciplined fund manager can produce good returns across all market cycles.

Portfolio monitoring and valuation have become increasingly important for fund-of- funds managers, especially in the current market environment. The fact that EVCA Guidelines and the US Private Equity Valuation Guidelines, on the one hand, and both IFRS and US GAAP, on the other hand, have a similar definition of “fair values”, is clearly beneficial to the “fair value” and monitoring processes of fund-of-funds managers. The EVCA Guidelines would be well suited to serve as a 60

Yearbook 2008

global private equity standard when it comes to reporting and the valuation of underlying portfolio companies. The further expansion of IFRS, e.g. the additional disclosing requirements as requested by IFRS 7, increases the administrative workload for private equity fund-of-funds managers, although the value added by the IFRS 7 standard to fund-of-funds investors might be questionable.

The timing with regard to the recovery of the credit, as well as the public equity markets, and the robustness of the US economy will be decisive determinants of private equity performance in 2008. Given the less benevolent market expectations for 2008, private equity performance numbers will likely not meet the record levels of 2007. However, a broadly diversified mature fund-of-funds is likely to provide downside protection and produce good returns for its investors, also in 2008.

Robert Schlachter LGT Capital Partners AG Principal, CFO Private Equity Schützenstrasse 6 P.O.Box 8808 Pfäffikon [email protected]

Dr. Roberto Paganoni LGT Capital Partners AG Partner, CEO Schützenstrasse 6 P.O. Box 8808 Pfäffikon [email protected]

61 S E C A Swiss Private Equity & Corporate Finance Association

Buyout Activity in Switzerland in 2007

Investment activity1 2007 was an exceptional year for private equity in Switzerland with strong market activity both in terms of number of transactions and in terms of volume. A total of 17 institutionally backed buyouts2 were announced during the year, slightly higher than in 2006 (16 buyouts). The total transaction volume amounted to approx. EUR 2.8 billion, up from an estimated EUR 2.3 billion during the previous year. This makes 2007 the most active year in the history of private equity in Switzerland, even topping the so far record years 2006 and 2002 when the three former Swissair subsidiaries Swissport, SR Technics and Gate Gourmet were acquired by financial sponsors in large buyout transactions. The strong market activity was supported by an attractive debt market environment – at least during the first three quarters of the year –, the solid economic fundamentals and a steady deal flow that kept up throughout the year.

The main driver behind the impressive deal flow and transaction volume was the strong activity in the mid-market segment: A total of seven transactions with an estimated value between EUR 50 and 500m were recorded, notably the succession solution at the luxury upholstery manufacturer de Sede sponsored by Capvis, the secondary buyouts of Maillefer SA and Rhiag Group, both by Alpha and the primary buyout of Premium Communications AG by Barclays Private Equity.

On the large buyout side, two transactions were observed in 2007. The acquisition of vending machinery operator Selecta by Allianz Capital Partners for an estimated consideration of EUR 1.1bn took the crown for the largest transaction announced and was probably the largest institutional buyout in Switzerland since Geberit in 1997. The second largest transaction of the year was the secondary buyout of Fläkt Woods by a consortium led by Sagard Private Equity.

In the segment for smaller buyouts with estimated transaction values below EUR 50m a total of eight transactions took place. The watch industry was particularly active, including the buyout of private label watch manufacturer Roventa Henex by German private equity house Argantis, the acquisition of watch brand TechnoMarine by Cobepa and Crédit Agricole (Suisse) and the buyout of watch case manufacturer Guillod Gunther by Providente.

1 Please note that the transaction statistics may differ from the ones used by the author in the “European Buyout Review 2007 – Switzerland” due to the different methodologies used by the publishers. 2 Only includes transactions with an (estimated or published) value in excess of EUR 5 million involving a transfer of the majority of the shares of businesses headquartered in Switzerland and sponsored by an institutional private equity investor. 62

Yearbook 2008

Buyouts in 2007 by sector Buyouts in 2007 by type of transaction Total # of transactions 17 Total # of transactions 17

Corporate Consumer related IT spin-off products 1 Industrial products 1 1 & services 5 Chemicals & Secondary materials buyout 3 Private 8 sellers 8 Watch industry Services 3 4

Source: Mergermarket, Capvis.

In all market segments the trend towards secondary buyouts continued in 2007. In almost fifty percent of the transactions private equity houses were both on the sell- and on the buy-side. Whether this should be seen as a sign for the increasing maturity of the Swiss buyout market or just as a logical consequence of the exceptionally high liquidity in the asset class remains a topic open for discussion. Furthermore, the number of active market participants on the buy-side increased in 2007. Particularly the smaller buyout segment saw a number of private equity houses giving their successful market debut in Switzerland, including German Argantis or Belgian Cobepa, for instance.

Divestments / IPOs The IPO window remained open during most of the year. The Swiss Stock Ex- change registered seven new listings in the main market segment, in line with the previous two years. However, the total value of the IPOs declined. The two largest transactions of the year were both companies from the financial services industry: Gottex Fund Management and VZ Holding. Only one private equity house took advantage of the favourable market environment to exit their shareholdings in a portfolio company. Alpha brought Uster Technologies to the stock market, less than twelve months after it acquired the company from Capvis. Furthermore, two of the newly listed companies were backed by venture capital firms, i.e. u-blox by 3i, Partners Group et al. and Golbach Media in which 3i held a minority stake prior to the listing.

The following table gives an overview of the new listings on the main market of the SWX in 2007 (excluding the real estate and investment companies segment) and the respective institutional investors, where applicable.

63 S E C A Swiss Private Equity & Corporate Finance Association

Market cap at Name of institutional Company name placement (CHFm) PE / VC-backed investor(s)

Gottex Fund Management 2’196 - - Partners Group, 3i, ZKB, u-blox Holding AG 375 VC Credit Suisse, I-Globe Uster Technologies AG 356 PE Alpha

Newave Energy Holding SA 167 - -

Goldbach Media AG 342 VC 3i

Addex Pharmaceuticals Ltd. 399 - -

VZ Holding AG 758 - -

Cosmo Pharmaceuticals S.p.A. 302 - - Source: SWX, Capvis.

In terms of trade sales, seven large transactions were observed in 2007, notably the sale of ETAVIS, the leading integrated building services provider in Switzer- land, by Capvis to Vinci Energies (France) and the sale of SF-Chem, the Pratteln- based chemicals company and also a former Capvis portfolio company, to CABB (Germany). In the largest private equity exit of the year, Medi-Clinic Corporation Ltd, the listed South African hospital operator, agreed to acquire Hirslanden Group, the Swiss operator of private clinics, from BC Partners. Other visible private equity exits to trade buyers included the sale of HCT Shaping Systems by Montagu to Applied Materials (US) and the sale of Similor, the Swiss-based manufacturer of sanitary tabs, to Roca Sanitario (Spain).

Outlook 2008 The outlook for 2008 remains mixed. While the turbulences in the debt and equity markets continued in the first quarter of the year, many owners of businesses are expected to wait for the markets to calm down before considering a sale of their company. This will certainly have a negative impact in the first half of the year. But as the economic fundamentals remain strong, activity is widely expected to pick up in the second half again – perhaps not reaching the exceptional peak of 2007 again, but at least the stable levels of previous years.

Michael Bauer Capvis Equity Partners AG Investment Director Talacker 42 8023 Zurich [email protected]

Yearbook 2008

Private Equity vs Private Equity Real Estate?

Background Real estate continues to play an integral role in institutional portfolios. As the latest report from Russell Research shows the consensus is for increased allocations worldwide through 2009 despite current turmoil in the financial markets (Figure 1). Investors are increasingly interested in global investments with growing allocations to non-domestic markets and mainly in indirect private investment vehicles.

10%

8.9% 4% 7.7% 7.5% 7.0% 7.0% 7.3% 6.5% 6.7% 6.7%

% of Total Fund Assets 2%

0% Private Equity Hedge Funds Real Estate

2005 2007 2009 (Forecast) Figure 1: Mean Strategic Allocation to Alternative Investments in the US. Source: Russell Investments, 2007.

In comparison to a private equity allocation, typical institutional investors such as pension funds often started with a real estate allocation to core risk type assets and less or none in value add and opportunistic. Whereas going forward a lot of investors diversify not only geographically but also from a risk perspective ie more towards value add and opportunistic investments. Investors often face the problem of lacking resources in a fragmented market to get an overview and understanding of market participants, return expectations, investment style, strategy, and track record. Private equity investors are facing similar problems. This article gives insight into a return comparison between private equity and private equity real estate returns and their shortcomings.

65 S E C A Swiss Private Equity & Corporate Finance Association

Private Equity vs Private Equity Real Estate Returns Return targets in real estate can differ substantially depending on what kind of risk appetite and investment strategy the investor requires. The typical institutional investor would have a substantial part of its allocation in the core spectrum of risk and return targets i.e. between the equity and bond return target. Within the alternative investment allocation the return targets are between hedge funds and private equity returns. If the value add and opportunistic universe is considered instead of the core style returns, a more aggressive return target can be expected. The following chart shows the difference in net IRR Median between Private Equity returns and PERE funds (Figure 2).

25 All PE

20 Buyout

15 Real Estate

Median Net IRR since inception 5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Vintage Year Figure 2: Median Net IRR Private Equity vs Private Equity Real Estate. Source: Preqin Real Estate, Spotlight 2008.

The following observations can be drawn: 1. Private Equity Real Estate (PERE) funds have performed very well, beating the ‘All Private Equity (PE)’ benchmark in most years, and tracking the ‘Buyout’ benchmark very closely. (The chart has excluded the venture and other sectors, which have been more volatile); 2. The weighted average returns have generally been even better than the median returns, a reflection of two factors: first, the distribution of returns is asymmetric, with the better funds out-performing by more than the extent to which the weaker

Yearbook 2008

funds have under-performed; and secondly, many of the largest funds have done very well indeed; 3. Even the worst vintage year on record (1997) has seen median net IRRs of 8% and weighted average net IRRs of just above zero. Median and weighted average returns recovered very rapidly after this low point, exceeding 10% in every other vintage year. 4. The spread of returns among PERE funds tends to be lower than in other sectors, including buyout funds, so the risk of selecting a poorly-performing fund is lower.

Next to the observations several clarifications are required to justify such a comparison:

1. How are opportunistic funds defined and can they be compared with the risk of a private equity fund? Opportunistic funds are generally of high-risk nature that can involve developments without pre-leases, acquisition of distressed assets, large portfolio acquisitions and re-packaging in smaller lot sizes. According to INREV (European Asso- ciation for Investors in Non-listed Real Estate Vehicle) a fund is an opportun-istic fund if: (i) returns are driven primarily through capital return; (ii) its target (post tax and fees) return is in excess of 18.5% per annum; and (iii) its capital leverage ratio is in excess of 70% gross asset value.

To compare Private Equity funds especially the MBO Private Equity risk to the Private Equity Real Estate risk a more detailed analysis would be needed as PE funds have different and additional risk factors next to the leverage risk, operational, strategic, and management risk.

2. Available Data Statistical analysis and benchmarking can only be executed if sufficient data is available and if the correct statistical tests are used and verified. Real estate opportunity funds are an investment option that emerged in force starting in the early 1990s in the US whereas Private Equity has a longer track record. Therefore data for PERE opportunistic funds might be sufficient for the US but not for Europe and Asia. Whereas for 2005 10 funds were evaluated in Figure 2 the number of funds climbed to 54 for 2005. Out of those 54 funds a number of funds might focus on a specific region such as the US, Europe, or Asia and on a specific sector such

67 S E C A Swiss Private Equity & Corporate Finance Association

as office, residential, retail, or industrial which have a different risk pattern in itself which makes a comparison even more difficult.

50 USD bn 40 76.5 69.5 30

20 42.3

24.3 10 11.7 0 2003 2004 2005 2006 YTD Dec 2007

Figure 3: Global Real Estate Fundraising. Source: Probitas Partners.

The development of closed-end real estate funds (Figure 3) and the number of funds in the market, especially opportunistic funds (Figure 4), supports the view that it might be a question of time until further and better analysis and conclusion can be drawn.

Funds on road US Europe Asia & RoW Total

Number 126 88 61 275 Total Target (USD bn) 73 41 28 142 Average Target Size (USD m) 579 466 459 516

Yearbook 2008

20 % of funds on the road

0 Core Plus Value Add Opportunistic Mezzanine FoF

Figure 4: Funds on the Road. Source: Preqin Real Estate, Spotlight 2007.

Conclusion A lot of market participants such as investors, private equity managers, developers and others, face difficulties in describing and understanding the concept and approach of opportunistic PERE funds. Therefore further education and research such as questioning the title “Private Equity vs Private Equity Real Estate?” would be of interest. The strong RE returns and their shortcomings when benchmarking PERE funds against PE funds have been elaborated.

Dr. John C. Davidson1 Swiss Reinsurance Company Vice President Private Equity Real Estate Mythenquai 50/60 8022 Zurich [email protected]

1 John C. Davidson has published his thesis “MBO with Private Equity” book Nr. 6 in the series of SECA publications. He’s working in Alternative Investments at Swiss Re in the field of Private Equity Real Estate.

69 S E C A Swiss Private Equity & Corporate Finance Association

SCM Real Estate Luncheon – Interview with Serge-Alexander Lauper

SCM Strategic Capital Management AG held its first Real Estate Luncheon at the Hotel Baur en Ville on February 29, 2008. After the introductory speech of Dr. Stefan Hepp, CEO and founder of SCM on the topic "Global Real Estate for institutional investors", Gary Sumers, Senior Managing Partner and COO of the Blackstone Real Estate Group, held a speech on the opportunities and hazards of global real estate investments, particularly in the USA, Europe and Asia.

Following the event Nicolas Bürkler of SECA conversed with Serge-Alexandre Lauper, CAIA, head of the Real Estate and Infrastructure at SCM:

International real estate investment is being increasingly included in the asset allocation of Swiss pension funds and other institutional investors. What makes international real estate investment interesting, what are the challenges in this investment class and how does SCM support investors in the asset allocation? With approximately 16% of their total assets invested in real estate, Swiss pension funds have a high real estate allocation compared to international peers. In recent years real state investment has undergone major developments and has become today a global and institutionalized asset class. Accordingly, the international diversification of a property portfolio outside of the home country is becoming increasingly important. As illustrated in the last survey of the Federal Office for Statistics, the share of foreign real estate investments of Swiss pension funds as per the end of 2006 accounted for about 1.1% of their total assets, an increase of 1% as compared to two years before. The internationalisation of real estate investment is, by the way, also observable abroad. In most of the developed countries pension funds are increasing their international real estate allocation.

Generally indirect international real estate investments offer a low correlation (i.e. they contribute positively to the diversification of an investor’s portfolio), attractive returns, steady dividends and a certain protection against inflation. For instance, as per the end of 2007, global listed real estate securities achieved a five-year return of 19.2% p.a. in Swiss Francs. In comparison, Swiss listed real estate companies returned 11.2% p.a. in the same period, Swiss stocks 15.2 % p.a. and Swiss bonds 1.6 % p.a. Even more important from the perspective of an institutional investor is the diversification contribution of real estate investments: the

Yearbook 2008

correlation between listed international real estate and Swiss stocks over the period 2002-2007 was around 0.4, while the correlation of non-listed real estate investments was even lower.

When setting up an international real estate program, wide diversification according to sectors, regions, managers and vintage years is to be observed. The strategic shift from domestic to international investments respectively from direct to indirect real estate places new challenges on pension funds and trustees in connection with the selection and controlling of the fund investments. Often the specialists for domestic direct real estate do not have the know-how to tackle foreign, indirect real estate investments and to monitor them. Furthermore, in the case of foreign investments, particularly in the USA, complex legal and taxation questions require solving (i.e. Effectively Connected Income).

As an advisor and a manager of globally listed and unlisted real estate pro- grammes SCM offers customised investment solutions. The determination of the asset allocation and the selection of investment funds and securities vary depending on the investment target and the risk ability of the client.

SCM invests part of the money entrusted to them in non-listed real estate investments. What is the intention of SCM and what advantages result for the investors from this action? In the case of real estate investments we differentiate between income oriented (core) and capital gains oriented (opportunistic) strategies. Core strategies concentrate on the acquisition and the management of first-class, top-located properties with stabilized cash flows and low tenant risks. Opportunistic strategies, on the other hand, include the repositioning of existing properties as well as the development of new properties with the intention of a medium-term sale.

With regard to core investments, SCM offers access to the best funds on a global basis. In addition, SCM develops customized listed index replication strategies for its customers. Non-listed investments have the advantage to cover a broader investment universe and to be better suited to implement an asset allocation which reflects the underlying direct real estate markets. Listed investments represent, on the other hand, an inexpensive alternative to gain exposure to the overall real estate market and make it possible to build-up a client’s exposure more quickly. In addition, they bear the advantage of being tradable at all times. A

71 S E C A Swiss Private Equity & Corporate Finance Association

disadvantage is that they are dependent on the general conditions at the stock market and therefore are more volatile than are non-listed funds.

Apart from geographical characteristics, SCM makes use of various specific investment properties for investing. Thereby a differentiation is made in connection with the risk, among others with reference to the degree of indebtedness and yield expectations. How does SCM take action in the investment process and what is the difference betweens the investment policy of the successful American endowment funds and the Swiss pension funds? SCM has committed itself since its foundation in 1996 to implement qualitatively high processes. It may be mentioned in this regard that SCM is one of the few ISO-certified companies within the sector. Our services cover the entire investment process, from planning the investment programme all the way to selecting the funds and to investment controlling. SCM disposes of a data base which comprises over 400 core funds and approximately 200 opportunistic managers. SCM reviews approximately 100 real estate funds annually, out of which roughly 10 investments are ultimately made.

Moderately and highly successful investors can be found both in the USA and in Switzerland. The investment policy of American and European investors differen- tiates primarily in the weighting of the investment segments and the selection of the investment instruments. American pension funds typically invest up to 50% of their real estate portfolio in opportunistic strategies. European investors, on the other hand, invest up to 80 % of their portfolio in income-oriented investments and generally give preference to non-listed investments. The greater share of income- oriented investment is to be attributed to the already existing domestic direct investments which are greater in Switzerland than in the USA. Generally, however, it may be noted that Swiss pension funds do not form a homogeneous group. For example, our customers invest in international real estate for some years already and can keep track with leading American investors. Smaller pension funds are also diversifying their real estate portfolios, e.g. by securitizing their direct investments or by investing in investment trusts or fund-of-funds.

Yearbook 2008

How does SCM see the market development of real estate investments and how should the investors benefit from these developments? After years of high returns and two-digit growth, the global real estate markets experienced a turn of the trend in 2007. The negative effects of the subprime crisis in the USA and the resulting credit crisis have generally caused a slowdown of the real estate markets. The markets affected most are being the American and the English property markets. Despite their strong real estate fundamentals, Continental Europe and Asia have also recorded losses. For real estate investors the following changes are the result: increasing risk premia have triggered pressure on real estate valuations and the limited availability of debt has had a weakening effect on the transaction volume. In Europe, for instance, the transaction volume is expected to decrease by 30% in 2008, down to approximately EUR 170bn. Albeit long-term structural and cyclical trend factors are in favour of real estate investments. Firstly, an increased demand for new properties can be expected in future in the main cities around the world as a result of the ongoing urbanization in developed and emerging markets. Secondly, the importance of internationally diversified real estate investments for international investors is likely to continue to increase. Finally most of the real estate markets continue to stand out by good fundamental data. I.e. the ratio between supply and demand is balanced, the vacancy ratios in economic hubs are low and rent growth is sustained.

In summary, despite the current market turmoil, real estate belongs as an asset class to an institutional diversified portfolio and will over the business cycle continue to provide attractive returns and diversification benefits to long-term oriented investors.

Serge-Alexandre Lauper, CAIA SCM Strategic Capital Management AG1 Head Real Estate and Infrastructure Kasernenstrasse 77b 8004 Zurich [email protected]

1 Founded in 1996, SCM Strategic Capital Management AG is a leading Swiss provider of management and advisory services for alternative investments. The company focuses on private equity, real estate, and infrastructure, covering all subsegments of these investment classes worldwide. The scope of services includes discretionary and non-discretionary mandates for institutional investors as well as funds-of-funds. With an annual investment volume of CHF 1 billion and over CHF 6.5 billion in managed assets, SCM ranks among the most important investors in the sector. Above-average performance, a global presence, investment experience, and top-tier services are the key characteristics of the company.

73 S E C A Swiss Private Equity & Corporate Finance Association

LPX Indices – Listed Private Equity as an asset class

1. Private Equity in a portfolio context Once the decision to invest in private equity is reached, it is difficult enough, to obtain the desired target allocation. And once the investment is made, it becomes even more difficult to keep the allocation stable. The amount of capital committed and capital invested usually differ substantially. By nature, this leads to a dilution in the effective private equity allocation. Moreover, with distributions and capital redemptions of mature funds, the need arises to reinvest the incoming cash in private equity in order to keep the portfolio’s fraction to this asset class unchanged.

How can an investor achieve a stable allocation to private equity? By investing and/or committing 100% of into a traditional private equity fund this is more or less impossible. However, a combination of both, traditional private equity funds and listed private equity enables an investor to fine-tune a portfolio and thus, to optimise its risk and return characteristics. In contrast to the general impression that listed private equity is mainly used by non-institutional investors to get access to private equity, theory suggests and practice shows that this asset class is also suitable for institutional investors in order to smooth their risk and return profile.

LPX monitors the listed private equity market carefully and observes that the majority of investors in listed private equity are institutional investors. These range from pension funds that have not invested in private equity at all in the past to experienced private equity investors that would like to “park” a part of their commitments in a liquid private equity product.

70% 60% 50% 40%

30% 58% 20% 42% 10% 0% Institutional investors Non-institutional investors

Figure 1: Breakup of investors in Listed Private Equity based on the assets under management as reported to LPX. Source: LPX GmbH, Basel. 74

Yearbook 2008

1.1. Universe of Listed Private Equity As of December 2007 more than 250 private equity companies were listed on international stock exchanges. The universe of listed private equity companies is a very heterogeneous one. The companies differ in their investment style (Buyout, Venture, Growth), their financing style (Equity, Mezzanine, Debt) and in their geographical focus. Table 1 shows some of the characteristics of the 10 largest listed private equity companies.

Market Man- Invest- Cap. age- LPE ment Financing (mEUR) Exchange ment since Focus Focus

3i Group plc 4'988 LSE Internal July 94 Balanced Equity

Allied Capital Corporation 2'061 NYSE Internal Dec 97 Buyout Mezzanine

American Capital 3'941 Nasdaq Internal Aug 97 Buyout Mezzanine Strategies, Ltd.

Eurazeo S.A. 4'453 Euronext Internal Jul 02 Buyout Equity

Intermediate Capital 1'536 LSE Internal 1994 Buyout Mezzanine Group PLC KKR Private Equity 2'547 Euronext External May 06 Buyout Equity Investors, L.P.

Onex Corporation SV 3'001 Toronto SE Internal Apr 87 Buyout Equity

Partners Group Global 2'432 LSE (AIM) External Oct 06 Balanced Mezzanine Opp., Ltd.

Ratos AB 2'163 Stockholm SE Internal Jan 99 Buyout Equity

Wendel S.A. 4'667 Euronext Internal Jun 02 Buyout Equity

Table 1: 10 largest LPE companies; Figures as of December 2007. Source: LPX GmbH, Basel.

The total market capitalization amounts to more than EUR 80bn as of end of 2007. Many companies have been listed in the 90ies (mainly Venture Capital companies). Listed private equity is still a niche market but a growing one. LPX expects a steady grow of this asset class and also an increasing importance in the asset allocation. Figure 2 shows the development of the market capitalization of listed private equity.

75 S E C A Swiss Private Equity & Corporate Finance Association

84 in EUR bn EUR in 40 81 69 71 30 58 44 47 20 41 32 30 28 10 24 14 14 9 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Figure 2: Market capitalization of listed private equity. Source: LPX GmbH, Basel.

The risk and return characteristics of listed private equity differ substantially when comparing subsectors of this asset class. The LPX50 TR showed an annualized performance of 10.2% p.a. and a volatility of 20.9% whereas the LPX Buyout TR showed a higher return (13.4% p.a.) but a lower volatility (14.7%). A different picture for European PE companies: they had a return of 12.1% p.a. and a volatility of 16.3%.

Private Equity Sector Return p.a. Risk LPX50 TR 10.2% 20.9% LPX Major Market TR 11.7% 22.8% LPX Buyout TR 13.4% 14.7% LPX Europe TR 12.1% 16.3% MSCI World TR 7.0% 15.6% Table 2: Risk and Return characteristics of Listed Private Equity in comparison with MSCI World. Data period: 31.12.1993 – 31.12.2007. Source: LPX GmbH, Basel.

Yearbook 2008

Using the LPX50 as a proxy for private equity – which is a widely accepted and often used timeseries representing the asset class listed private equity – it is possible to calculate the risk and return characteristics and draw an efficient frontier. The standard deviation of the tangential portfolio increases from 7.54% to 14.72% when including private equity. At the same time the return increases from 4.97% to 15.53% p.a.

22%

17%

TP All EF BM EF All 12% TP BM GMVP BM TP All GMVP All 7% KML BM KML All TP BM

GMVP All GMVP BM 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

-3% Figure 3: Efficient frontier including and excluding listed private equity. The green line includes private equity whereas the blue line excludes private equity. Source: University of Basel, department of Finance.

2. LPX as a provider of Listed Private Equity Indices LPX, founded at the beginning of the year 2004 aims to establish several indices as the new benchmarks in the private equity industry. Professor Dr. Heinz Zimmermann – as a co-founder of LPX – advises the team from an academic perspective. The first index (LPX50) was published in July 2004. LPX divides their database in different subsegments by regional, business and liquidity characteristics. This makes it possible to offer specific indices for each of these segments. In the following you find a short description of the index methodology and some of the LPX indices. Further information can be found on www.lpx.ch.

77 S E C A Swiss Private Equity & Corporate Finance Association

450 400 350 300 250 200 150 100 50 0

MSCI World Nasdaq Composite LPX50 TR

Return1 Risk2 Sharpe Ratio3 MSCI World [TR] 2.97% 16.39% negative NASDAQ Composite [TR] 3.14% 30.30% negative LPX 50 [TR] 5.70% 23.88% 0.06 Figure 4: Index methodology. Source: LPX GmbH, Basel.

450 400 350 300 250 200 150 100 50 0

MSCI World Nasdaq Composite LPX50 TR

Return1 Risk2 Sharpe Ratio3 MSCI World [TR] -0.91% 9.67% negative NASDAQ Composite [TR] -1.15% 13.01% negative LPX 50 [TR] -14.80% 14.50% negative Figure 5: Index methodology. Source: LPX GmbH, Basel.

1 Annualized geometric mean return. 2 Annualized standard deviation based on monthly log-returns. 3 Proxy for risk free rate is the Euro Overnight Index (EONIA). 78

Yearbook 2008

2.1. Index methodology LPX applies various liquidity criteria, in order to ensure that the LPX® index family is tradable and investable. LPX® consistently bases its index construction and maintenance methodology in accordance with the highest industry standards. In order to do so and, further, to audit the index calculation process LPX established an index committee. The committee consists of well-known institutions and industry experts.

2.2. LPX index family 2.2.1. Global indices LPX50 The LPX50 consists of the 50 most capitalized and actively traded private equity companies worldwide. The selection process is based on liquidity criteria (Figure 6). Based on these criteria LPX gets a sample of liquid listed PE companies and constructed an index out of the 50 most capitalized companies.

Criteria: Quoted on a stock exchange LPX base universe Min. 50% of all assets classified as PE investments Exit strategy pursued

Liquidity criteria:

Minimum average trade continuity 80%*

LPX Index Maximum average Bid-Ask Spread 4%*

Minimum average market EUR 80m* capitalization Minimum average trade volume 0.08%* relative to market cap *LPX50

Figure 6: Index methodology. Source: LPX GmbH, Basel.

79 S E C A Swiss Private Equity & Corporate Finance Association

LPX Composite The LPX Composite is a broad global LPE index whose number of constituents is not limited. The LPX Composite thus describes the development of the whole liquid LPE universe covered by LPX that fulfils pre-defined liquidity criteria.

LPX Major Market The LPX Major Market® represents the most actively traded LPE companies. The LPX Major Market® started on 15 June 2005 and continued LPX® HL. Currently the index consists of 25 LPE companies.

Regional indices LPX Europe The LPX® Europe represents the 25 most actively traded LPE companies that are listed on a European exchange.

LPX America The LPX® America represents the most actively traded LPE companies that are listed on an exchange in North America. Currently the index consists of 14 LPE companies.

LPX UK The LPX® UK consists of UK listed private equity vehicles covering global and regional markets and sectors such as venture, buyout and mezzanine.

Yearbook 2008

2.2.2. Style indices LPX Buyout The LPX® Buyout represents the most actively traded LPE companies whose business model consists mainly in the appropriation of buyout or mezzanine capital or in the investment in such funds. Currently the index consists of 18 LPE companies.

LPX Venture The LPX® Venture represents the 15 most actively traded LPE companies whose business model consists mainly in the appropriation of venture capital or in the investment in venture capital funds.

LPX Direct The LPX® Direct covers listed private equity companies that make direct private equity investments. The index has been designed in cooperation with Bank Julius Baer & Co. Ltd.

LPX Indirect The LPX® Indirect represents the largest liquid LPE companies that invest at least 50% of their assets in Private Equity funds. Currently the index consists of 15 LPE companies.

Michel Degosciu LPX GmbH Managing Director Haus zum Maulbeerbaum Bäumleingasse 10 4051 Basel [email protected]

81 S E C A Swiss Private Equity & Corporate Finance Association

Organizational Performance: The Shareholder Value Challenge of the 21st Century

The bitter cold of the last ice age favored big animals, like the Mammoth, with large weight to surface area ratios. However, as things warmed up, these large creatures became easy prey for the smaller but faster moving carnivores of the open field. Most firms find themselves in a similar position today. Barriers to competition are falling, and tectonic shifts in technology and economics are simultaneously creating new risks, and new opportunities.

During the industrial revolution, profits were generated by throttling a capital asset platform, like a factory, retail store chain, or transportation network. Scale and competitive advantage were linked through cost advantage. BCG documented the rules to win this old industrial game with their now-famous growth-share matrix in 1970; at the very end of the industrial revolution. And, like all market innovations, as soon as the rules became clear, they started to become obsolete. Cunning entrepreneurs like Steve Jobs at Apple, Herb Kelleher at Southwest Airlines and Ken Iverson at Nucor were turning the growth-share orthodoxy on its head with bold exceptions in the 80’s – early indications of the a paradigm change in value creation.

The invention of the integrated circuit marked the beginning of the end of the industrial age. The near total collapse of information storage, transmission and processing cost since then (cost/bit), has been the single greatest economic force changing the rules for success and failure in business. Liberalization, deregulation, and the collapse of trade barriers are additional environmental shifts which firms must either adapt to, and exploit; or ignore, and all victim to.

Darwin’s rules of natural selection apply. And when the environment begins to change more quickly, an organization’s collective ability to recognize and act on emerging opportunities and threats, replaces its legacy capital asset platform as the new driver of sustained value growth. After 250 years of successful industrial- ist tradition, companies are only now struggling to come to grips with the full implications of this new reality.

Knowledgeable, creative, intelligent and team-oriented employees have become the underlying critical asset which generates shareholder value. Companies in the post-industrial countries must depend more than ever before on the innovation,

Yearbook 2008

initiative and integrity of their employees at all levels. In this way, a firm’s “cultural platform” has replaced the capital platform, as a basis for sustainable competitive advantage. But what are the specific characteristics of a superior culture? And, how can companies develop these? Finally, how can the behavior of thousands of front-line workers be changed in large, complex, multi-national organizations to adapt to larger and more frequent market shifts?

Evidence for the shift to human capital is all around us. 75% of Dow 30's value is now in intangible, people-based assets (even at a historical low point in August 2003). And, the salaries of the few senior leaders who have mastered the complex art of managing knowledge worker assets have increased to astronomical levels above those of others who carry less responsibility for this increasingly critical resource. The call for more “leadership” rather than mechanistic “management”, and for “Emotional Intelligence” are further well publicized indications of the increasing underlying shift toward people.

However, unlike physical assets, knowledge-worker’s productivity is highly non- linear, and much more complex to measure. Talented employees largely determine their own productivity, based on their motivation, experience and education. They are more independent than their assembly-line cousins. Managing the knowledge worker asset is further complicated by the fact that, unlike physical assets, people are not legally owned by the company, and they are highly mobile. The leadership challenge is much larger than simply monitoring the output of many manual laborers on a capital asset platform, and using authoritarian control to align employee behavior with firm objectives.

As the key enterprise resource shifts from capital assets, to knowledge workers, so must the tools and processes for measuring organizational and employee performance. The sad truth however is that the gap is large, and perhaps even widening! Tightened corporate governance regulations like Sarbanes-Oxley are new obstacles to investing in “intangibles”. Most companies still measure and manage their employee’s performance with processes and practices inherited from their “industrial” past. These are no longer adequate for the more dynamic business environment of the future.

Humatica has developed and deployed web-based tools and structured services to quantify and systematically optimize the performance of knowledge-based organizations. One such tool is altus. It is used to benchmark behaviors which are linked with an organization’s ability to adapt, throughout the organization. Based

83 S E C A Swiss Private Equity & Corporate Finance Association

on testing numerous portfolio companies and thousands of employees, Humatica is able to identify specific organizational behavior patterns which drive sustained value growth and/or enterprise risk.

In particular, private equity investors have found such hard-facts tools to be very valuable. They provide complete, transparency, like an x-ray, on the soft factors throughout a portfolio company’s organization. With altus, investors finally have a tool to quickly measure and hold management accountable for organizational performance, without getting operationally involved themselves.

Humatica’s tools are especially important in the first 100 days after acquiring a new portfolio company, in problem cases, and with mid-market firms that were previously either family run, or non-core parts of large firms. These types of acquisitions often have legacy organizations and deep-rooted behavior patterns which are not consistent with achieving the more ambitious value growth targets of private equity investors. Based on the results, investors and management are able to take specific steps which improve organizational performance, and thereby, shareholder value.

Andros Payne1 Humatica AG CEO Forchstrasse 239 8032 Zurich [email protected]

1 Andros Payne, is the CEO of Humatica. Mr. Payne was previously a Partner at Mercer Management Consulting and a high-tech entrepreneur. He completed an MBA at the Stanford Graduate School of Business and two engineering degrees. 84

Yearbook 2008

Reporting Corporate Finance

2007 has been a very good year for most of our members due to a tremendous transaction activity. In parallel to the high level of professional activity an impressive number of SECA members have actively contributed to the further development of SECA as the leading association for corporate finance professionals.

As an example, representatives of the corporate finance chapter have supported Capvis in the organization of a roundtable discussion about the importance of MBO transactions for the Swiss economy and the entrepreneurial environment.

Furthermore, the corporate finance chapter was a co-sponsor of an event in Zug which presented various reputed speakers from the alternative investment field. A new target group of visitors could be attracted with this local event. Local events will also be held in the future.

The current financial crisis overshadows the fact that financial innovation will remain highly important for the industry. The SECA corporate finance chapter will also make an effort in the future to create platforms for the presentation if innovative ideas and firms. SECA is mainly targeting firms which have a sustainable business model and are working hard every day on the continuous success story.

Global Initial Public Offerings (IPO) activity during 2007 Global IPO activity rose to another new high after having done so already in the previous year. Over USD 270 billion were raised in close to 1850 IPOs worldwide. A boom in emerging markets has clearly outweighed reduced activity in other markets such as Europe and North America.

While the exchanges in developed markets reported strong activities in the first half of the year, activity slowed considerably thereafter. By contrast, IPO activity in the emerging markets was at record levels in the second half of the year.

Again, as observed in the previous year, most of the largest IPOs were from emerging markets. The majority of the 20 largest stock market introductions were from these markets. Two out of the top ten IPOs were from Brazil, emphasizing this country’s booming stock market. Apart from Brazil countries like Colombia, Dubai and India all featured in the top 20 listings worldwide and companies from these countries choose to list in their domestic bourses. In terms of market share,

85 S E C A Swiss Private Equity & Corporate Finance Association

2007 saw a remarkable rise in value and number of companies listing on exchanges outside the main 12 bourses that have tended to dominate listings of the last decade.

Thirty-eight venture-backed European companies completed initial public offerings in 2007, raising €900 million. This was down 49% from 2006, which saw € 1.74 billion raised through 89 venture-backed IPO’s. After two years of good interest from the public exchanges, European venture-backed companies saw the IPO market pull back in 2007.

Swiss IPO activity during 2007 As in the previous year, nine companies undertook an initial public offering on the Swiss Exchange (SWX). Total funds raised amounted to CHF 1.51 billion, down 58 % from CHF 3.6 billion in 2006. To put this drop in perspective it should be pointed out that in 2006 Petroplus alone raised CHF 2.9 billion, while in 2007 the largest IPO, Gottex Fund Management raised CHF 608 million.

Two biotech companies, Cosmo and Addex Pharmaceuticals listed their shares on the SWX extending the previous years strength in listings of life science companies, in particular in the area of biotechnology.

Activity of venture-backed companies that completed IPOs on the SWX was again elevated. With Uster Technologies, u-blox and Addex Pharmaceuticals, a third of all IPOs during the year were private equity backed. It should be pointed out however that during 2006 five out of nine companies which listed their shares on the SWX were venture-backed.

Beat Unternährer The Corporate Finance Group Partner Beethovenstrasse 11 8002 Zurich [email protected]

Leonid Baur Sal. Oppenheim jr. & Cie. Managing Director Corporate Finance (Schweiz) AG Löwenstrasse 3 8022 Zurich [email protected]

Yearbook 2008

IPO Characteristics - Swiss Evidence

1. Introduction According to the recent PwC IPO Watch Europe in 2007 10 IPOs with an offering volume of EUR 1’975m took place at the SWX Swiss Exchange. In terms of offering volume this has been the second best IPO year at the SWX since 2004. Unfortunately there is few data publicly available about IPOs. For this reason, we decided to dig deeper and to analyze a sample of IPOs at the SWX in the time period 2004 to 2007.

A first comparison of Swiss and European IPOs shows that Switzerland has a higher-than-average number of IPOs in the health care sector (see figure 1).

35%

30%

25%

20%

15%

10%

0% Utilities Oil & & Gas Oil Technology Health Care Services Basic Materials Basic Consumer Goods Financial Services Industrial Goods & GoodsIndustrial Telecommunication Consumer Services

SWX Europe Figure 1: Number of IPOs by sector from 2004-2007. Source: ZKB and PwC.

2. Sample / Data At the SWX Swiss Exchange 27 IPOs took place in the time period 2004 to 2007. These transactions have been analyzed for the following criteria: offer size price range over-allotment option costs

87 S E C A Swiss Private Equity & Corporate Finance Association

The largest transaction in terms of offer size has been the IPO of Petroplus in the amount of CHF 2.9bn. With a volume of CHF 50m to CHF 75m Cosmo Pharma- ceuticals, BioXell and Newave Energy have been the smallest transactions in our sample.

In the next sections, we present a choice of our findings.

3. IPO Structure 3.1. Volume Regarding the volume of an IPO, we distinguish offer size from issue size. The offer size is calculated by multiplying the number of shares placed in an IPO (existing and new shares) by the offer price, whereas the issue size is the number of new shared issued by the company (primary shares) in the IPO multiplied by the offer price. The issue size reflects the actual gross cash in-flow to the company.

In our sample the average offer size is CHF 376m. The median is significantly lower at CHF 156m due to numerous smaller IPOs especially in the biotech industry.

3.2. Primary Shares Considering an IPO the shareholders and the management of a company can either decide to sell just existing shares (secondary shares) or to issue new shares (primary shares) or to combine these two possibilities. As mentioned above, the company will have a cash in-flow only if primary shares are sold in the IPO. Whereas U.S. IPOs include a notable portion of primary shares, in Europe and Switzerland it is quite popular to offer a significant portion of secondary shares.1 Figure 2 shows that in Switzerland more than half of all offerings consist of primary as well as secondary shares.

Looking at the transactions including primary shares and secondary shares we found that on average (median) about 2/3 of the offered shares were primary shares.

1 Huyghebaert/Van Hulle, 2006: Structuring the IPO: Empirical evidence on the portions of primary and secondary shares; Journal of Corporate Finance; Volume 12, Issue 2; Pages 296-320. 88

Yearbook 2008

Primary Shares only (33%)

Primary Shares and Secondary Shares (52%)

Secondary Shares only (15%)

Figure 2: Share types used in IPOs. Source: ZKB.

30%

25%

20%

15%

10%

in % of Price Range Mid 5% AverageSize of PriceRange

0% Care Health Goods Goods & Financial Services Industrial Industrial Services Oil & Gas Services Consumer Consumer Technology Figure 3: Price range dimension in % of the price range mid. Source: ZKB.

89 S E C A Swiss Private Equity & Corporate Finance Association

4. IPO Pricing and Performance 4.1. Price Range An important step during the IPO process is the valuation. For valuation purposes different methods are applied, the most important ones in analyst reports are discounted cash-flow calculations and comparable earning multiples. Based on the results of analysts and the pre-marketing feedback of investors (investor education) an indicative price range is set. The relative width of the price range can be considered as an indicator of certainty about the expectation how the market will value the company.

Figure 3 shows the relative price range width for the different sectors of our sample. The sector oil & gas in our sample consists of one IPO only and therefore is not representative. The widest ranges we found for the technology sector (26%) and the health care sector (20%) whereas the sectors of the “old economy” are clearly below 20%. This indicates that involved parties are more comfortable in assessing how the market will value companies of “old economy” sectors.

4.2. Price Range and Pricing Our sample shows in 25 of 27 cases that the offer price was set within the price range. In two transactions the offer price had to be set below the indicative price range: one issuer set the offer price at CHF 35 whereas the original price range was CHF 53 to 68 and the other set it at CHF 20 having published a price range of CHF 22 to 28. Four transactions where priced at the upper bound of the range: Ypsomed, Emmi, Meyer Burger Technology and VZ.

Contrary to the U.S. (e.g. in Q1/2008, Visa announced an indicative price range of USD 37 - USD 42 but set the offer price at USD 44), offer prices above the indicative price range are quite unusual in Europe. One explanation is the different interpretation of securities laws: outside the U.S. the exchange of information between investors and the syndicate banks prior to the bookbuilding is allowed. A study by Jenkinson/Morrison/Wilhelm published in 2003 suggests that the price range will be “sticky” and relatively unresponsive to demand if such an exchange of information is possible prior to the bookbuilding, which is the case outside the United States.2

2 Jenkinson/Morrison/Wilhelm, 2006: Why are European IPOs so rarely priced outside the indicative price range?; Journal of Financial Economics; Volume 80, Issue 1; Pages 185-209. 90

Yearbook 2008

Oversubscription and Pricing According to the study of Jenkinson/Morrison and Wilhelm mentioned in 4.2. there should be no or at least a small correlation between oversubscription and pricing. Indeed, we did not find any correlation between these two variables in our sample.

4.3. Oversubscription and Performance The relation between oversubscription and performance on the first day of trading is shown in figure 4. Clearly there is a correlation between these to variables. Oversubscription is an indicator of high demand and a high demand leads ceteris paribus to increasing prices on the first trading day.

35%

30%

25%

20%

15%

10%

Performance- First Day Trading 0% 02468101214 -5%

-10% Oversubscription

Figure 4: Relation between oversubscription and performance on first trading day; linear trendline. Source: ZKB.

4.4. IPO Discount Investors subscribing shares in an IPO require a discount compared to the IPO valuation. This leads to an intentional “underpricing” which will be corrected by the market usually on the first trading day in form of a price jump. Although there are legitimate concerns3 if these price jumps are the result of the IPO-discount only many scientists rely on the assumption of perfect market efficiency thus being able to calculate the initial return (performance on the first trading day) and refer

3 see: Ma/Tsai, 2001: Are Initial Return and IPO Discount the Same Thing? A Comparison of Direct Public Offerings and Underwritten IPOs; EFA 2002 Berlin Meetings Presented Paper; available at: http://ssrn.com/abstract=300880.

91 S E C A Swiss Private Equity & Corporate Finance Association

to it as the IPO-discount. For our sample, we calculated an average IPO discount of around 9% (see figure 5). This number is insignificantly smaller than the one obtained by Oehler/Rummer/Smith who calculated an average IPO-discount of about 12% for the German stock market with a sample period 1997-2001.4

120% 118% 116% 114% 112% 110% 108% 106% 104% Cumulative Returns Cumulative 102% 100% … Day 2 Day 4 Day 6 Day 8 Pricing Day 10 Day 12 Day 14 Day 16 Day 18 Day 20 Day 22 Day 24 Day 26 Day 28 Day 30

2006 2007 Mean 2005 2004 Figure 5: Cumulative post-IPO returns. Source: ZKB.

No Exercise (22%)

Full Exercise (45%)

Partial Exercise (33%)

Figure 6: Exercise of over-allotment option (if any). Source: ZKB.

4 Oehler/Rummer/Smith, 2005: IPO Pricing and the Relative Importance of Investor Sentiment - Evidence from Germany; available at: www.cass.city.ac.uk/conferences/mmf2004/files/Rummer&Oehler&Smith.pdf. 92

Yearbook 2008

4.5. Over-Allotment Option The over-allotment option (also known as: greenshoe option)5 is the right to sell additional shares in an offering if the demand for the specific shares exceeds the original number of shares offered. All transactions in our sample except for Burckhardt Compression included an over-allotment option. Figure 6 shows that only 22% of the over-allotment options were not exercised, whereas 45% were fully exercised and 33% at least in part.

Additionally, we found the average size of the over-allotment option in our sample to be 13% of the offer size. If the over-allotment option is exercised this is nor- mally done within the first few trading days: we calculated a median of three trading days until the option was exercised.

4.6. Trading Volume In our sample, the number of shares traded on the first trading day amounts to 25% of the offered shares on average.

Interesting is the relation between the trading volume and the performance each within the first 10 trading days. Figure 7 proofs that a performance deviating from the mean leads to a higher trading volume. In our sample, we found two examples where the trading volume almost reached the size of the offering which means that within 10 days nearly every single share changed hands.

100% 90% 80% 70% 60% 50%

Trading Days 40% 30% 20% Volume in % ofVolume Offer- Size First 10 10% 0% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% Performance - First 10 Trading Days Figure 7: Relation between Post-IPO trading volume and performance; 2nd order polynomial trendline. Source: ZKB.

5 The name „greenshoe“ stems from a company founded in 1919 as Green Shoe Manufacturing Company, which was the first company using this practice in an offering.

93 S E C A Swiss Private Equity & Corporate Finance Association

5. IPO Costs IPO costs are an often discussed topic. The presentation “IPO von KMUs” held at the SECA Private Equity and Corporate Finance Congress 2007 indicated that an IPO at the SWX of a small or medium sized company with an issue size of CHF 50m – CHF 100m is likely to cost about 7.5% to 9% of the gross proceeds.6 We estimated the costs of an IPO in our sample by deducting the net proceeds published from the issue size. Figure 8 shows that our estimates of the costs for smaller IPOs are in line with the indicated costs mentioned above. Additionally, we found that for larger volumes the percentage costs decreased significantly.

14%

12%

10%

6% IPO Costs 4%

0% 0 200 400 600 800 1000 1200 1400 1600

Issue Volume in m CHF Figure 8: IPO-Costs in relation to issue volume; log trendline. Source: ZKB.

6 Straub/Zürcher, 2007: IPO von KMUs; Presentation on the occasion of SECA PE and CF Congress; Page 5; available at: http://www.seca.ch/sec/files/events/pe_and_cf_kongress/Rodolfo_Straub_SWX_Wolfgang_Z%C3%BCrc her_Wenger_Vieli.pdf. 94

Yearbook 2008

Conclusion We summarize our findings as follows: the typical Swiss IPO offer size amounted from CHF 70m to CHF 200m primary as well as secondary shares were offered in more than half of all IPOs the price range in IPOs of the “old economy” sectors was tighter than in IPOs of the technology or the health care sector the initial returns on the first trading day were positively correlated to the oversubscription of the IPOs the average Swiss IPO-discount was about 9% nearly all IPOs included an over-allotment option which was exercised – at least partially – in more than 3/4 of all cases costs of an IPO at the SWX are about 9% of the gross proceeds

Our aim was to evaluate Swiss IPO characteristics. The results of our work support common knowledge about structuring elements of a transaction on an empirical basis. Therefore the findings represent the current market standards for IPOs at the SWX Swiss Exchange.

Dr. Andreas Neumann Zürcher Kantonalbank Member of Senior Management P.O. Box Head Equity Capital Markets 8010 Zürich [email protected]

Julian Gretzinger Zürcher Kantonalbank Capital Markets P.O. Box 8010 Zürich [email protected]

95 S E C A Swiss Private Equity & Corporate Finance Association

LBO versus IPO – Why the public-to-private trend will persist even in the post-subprime era1

The role of private equity as a separate investment category has undergone far- reaching changes in recent years, attracting growing interest from a wider public. Just a few years ago, especially during the internet boom, it meant virtually the same as venture capital: classical risk funding with a very long-term investment horizon. This has changed with the increasing importance of buyout transactions.

Accordingly the scope of private equity, in terms of both sectors and geographical location, has expanded massively. Venture funding still has a major role – often the major role – in research-intensive and high-tech sectors, but so-called public- to-private transactions – takeovers of established, cash flow-generating, publicly quoted companies – have now spread throughout the market. As well as specialist finance houses, such as private equity partnerships and hedge funds – which, incidentally, are showing signs of convergence – even wealthy private individuals have no hesitation in taking over public companies with market capitalizations in the tens of billions, largely with borrowed money. This is the leveraged buyout or LBO.

Superabundance in capital The current market environment favors this sort of massive externally-funded investment, because private equity houses have more cash at their disposal than ever before. Between 2002 and 2007, buyout market leaders Goldman Sachs, the Carlyle Group, Blackstone and KKR jointly accumulated capital of nearly 200 billion dollars. In 2006 alone, the volume of private equity transactions more than doubled from the previous year’s level to over 750 billion dollars (see figure 1). Only last summer’s subprime crisis brought the takeover boom to a temporary halt. A comparison: in the last ten years the global IPO volume, which is equally subject to market cycles, has averaged 165 billion USD (see figure 2).

1 The German version of this article was published in the Swiss newspaper “Finanz und Wirtschaft” on January 5, 2008. 96

Yearbook 2008

800 750 700

600 507 500

400 321 300 238 200 129 107 97 106 100 52 59 64 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 H1 Transaction volumes in USD bn Figure 1: Worldwide Private Equity transaction volume more than doubled. Source: Dow Jones, Clariden Leu.

2,000 350 1837 1748 1779 1,800 300 1,600 1450 1470 1375 1,400 250 1290 1231 1285 1,200 1042 200 977 1,000 953 779 150 800

600 100 400 50 200

0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Number of IPOs Offering value in USD bn (right scale) Figure 2: IPO activity still on a high level. Source: Bloomberg, Clariden Leu.

Even if the costs of funding corporate purchases are likely to rise again, and public-to-private transactions remain dependent on the interest rate climate – they will continue to increase in importance in future. Quite apart from the fact that the

97 S E C A Swiss Private Equity & Corporate Finance Association

private equity houses are awash with cash – much of it contributed by institutional investors such as sovereign funds and family offices, both of which are becoming more and more important – there are several reasons for this:

Many companies have balance sheets that are in a healthier state then they have been for a very long time. This is because market deregulation and globalization gathered pace during the 1990s, leading to a massive increase in competitive intensity. Prior to that, the dominant trend had been for companies to concentrate on core activities – and this put many companies off diversifying into new business areas and making acquisitions. The trouble is that with very few exceptions, conglomerates are penalized by the stock markets with a valuation discount. As a result of this trend, lots of companies have optimized their capital base by buying back their own shares or increased the distributions paid to shareholders.

A second reason, and probably a decisive factor behind the LBO boom, is the expansion – in both qualitative and quantitative terms – of available management capacities. The successful completion of a buyout transaction ought not simply to result in a change, or even an improvement, in the funding structure. Instead it should concentrate on restructuring identified companies and tightening their focus – or even regenerate them from scratch. This is not possible without the availability of managers who have experience of the sector, and – most important of all – a willingness to take risks.

Contact networks are also crucial, naturally – such as those that experienced CEOs like Lou Gerstner, formerly with IBM, and the legendary Jack Welch were respectively able to contribute to the Carlyle Group and New York private equity boutique Clayton, Dubilier & Rice. The list of former top managers now playing major roles in private equity, and especially public-to-private, transactions could be extended more or less ad infinitum. They are generally risk-takers, relatively unmotivated by money – and they value the freedoms and benefits conferred by private ownership structures. They usually work for a symbolic fixed salary, but with the right to invest their own money in projects and participate in successful restructuring processes. A variety of exit strategies is available – another IPO, a trade sale, or repaying the external funding and retaining the company within the portfolio of the owners or the private equity specialists.

The principal advantage of this approach over conventional public companies lies in the virtual elimination of the "principal agent" problem: the managers are joint proprietors, so conflicts of interests hardly ever arise. Furthermore cooperation 98

Yearbook 2008

between the Board of Directors and management is much closer, and the flow of information is significantly improved. The buyout sector has now become very attractive to middle management too, and even to recent graduates, as a way of quickly becoming the joint owner of a business.

A consequence of the rising regulation flood A further attraction of the public-to-private route lies in the fact that quoted public companies are now subject to extremely far-reaching regulatory provisions. The Sarbanes-Oxley Act, which gave rise to heated discussion in the run-up to its introduction in 2002, is a perfect example. The onerous obligations, the requirements for greater transparency (including disclosing top managers’ salaries), in conjunction with a short-term, quarter-by-quarter view on the part of market participants, increase the pressure on the management teams of large public companies. Only a minority can stand up against this deluge of regulation, even if – like Porsche manager Wendelin Wiedekind – their strategies are highly successful. It can be an aggravating or even counter-productive factor – in a restructuring phase particularly – to have to justify your every decision, about investment and everything else, to shareholders and the stock exchange every three months.

There is a widespread prejudice that private equity operations are only interested in a quick profit, but in fact the opposite is often the case. A small body of active shareholders is conducive to decisions that are in the company’s sustainable long- term interests.

Private equity business has not yet achieved any great significance in Europe (except for the UK), and even less so in Asia. The public-to-private mechanism can therefore probably be expected to establish itself as an independent, highly cyclical governance model. Likely targets would include mature companies, and firms with inefficient funding or with fragmented bodies of shareholders with little or no commitment. A good example of this is Mövenpick, one of the few Swiss cases.

The more difficult funding becomes, and the higher the prices asked for corporate acquisitions, the more important it becomes to install competent managers capable of seeing the pending restructuring or strategic changes through to a successful conclusion.

99 S E C A Swiss Private Equity & Corporate Finance Association

Prove of capital efficiency Those who argue that a public-to-private buyout creates an undemocratic funding model in comparison with a public company may be partly correct. Apart from listed private equity companies, private equity investments as an asset class are very rarely available to small investors. One day, for reasons of diversification, the private equity players will be compelled by their own success to reopen their capital base, thus giving the public access to their business model. This is clear from the latest hedge fund and private equity IPOs, such as that of Blackstone. The relatively poor performance of the share prices since these IPOs is probably attributable to the aforementioned difficult market conditions. It certainly does not call the success of the sector into question.

With its catalyst function, the buyout business model is evidence of the market efficiency of an open economic system. At the same time it highlights the fact that the IPO does not always mean what it used to. It is often designed not so much to raise capital as to provide the owners with an exit opportunity, and to achieve qualitative objectives such as raising public awareness and making the company more attractive in the labor market.

Dr. Werner E. Rutsch Clariden Leu AG Managing Director Bahnhofstr. 32 Head Portfolio Management Advisory 8070 Zurich [email protected]

100

Yearbook 2008

Mergers & Acquisitions Market Switzerland 20071

M&A in Switzerland - Overview 2007 was again an exciting year for Corporate Finance and the M&A market in Switzerland. Deal activity increased significantly; Swiss bidders continued to acquire more targets abroad than foreign bidders acquired in Switzerland and Switzerland also experienced unsolicited bids, a high level of private equity deals, IPOs and the first major investment by a sovereign wealth funds.

However, the crisis in the credit markets dampened M&A activity in the last quarter of 2007 as it made access to financing more difficult and raised uncertain- ties about the economic outlook. The situation affected primarily larger transactions, while smaller deals continued to be executed. The USD 11 billion capital infusion by Singapore’s Government Investment Corporation and a financial investor from the Middle East in UBS was the only “deal” announced in 2007 exceeding USD 10 billion (see table 1).

In line with most expectations and despite the credit crunch, M&A activity in Switzerland, by number of deals announced, increased by around 25% in 2007 compared to 2006. However, the aggregate value of deals (for which values were disclosed) remained at roughly the same level as in the previous year. The number of private equity deals in 2007 has more than doubled compared to 2006, with a good third of these reflecting trade sales. The number of IPOs has been steady at around ten.

100 400 90 350 80 300 70 60 250 50 200 USD bn USD 40 150 30

100 Number ofdeals 20 10 50 0 0 2004 2005 2006 2007 Number Value (left scale)

Figure 1: Number and value of deals per year. Source: KPMG M&A Yearbook 2007.

1 Please see KPMG’s caveat at the end of this article.

101 S E C A Swiss Private Equity & Corporate Finance Association

50 120 45 40 100 35 80 30

USD bn USD 25 60 20 15 40 Number of deals 10 20 5 0 0 II 05 IV 05 II 06 IV 06 II 07 IV 07

Number Value (left scale)

Figure 2: Number and value of deals per quarter. Source: KPMG M&A Yearbook 2007.

Announced Target Bidder Seller Value Date Target Country Bidder Country Seller Country (USDm) Government of Singapore Investment 10.12.2007 UBS AG CH Corporation; SG n/a n/a 11'535 Middle Eastern strategic investor 12.03.2007 Fastweb S.p.A IT Swisscom AG CH Various n/a 6'353 Gerber Products 12.04.2007 Company (baby food USA Nestle SA CH Novartis AG CH 5'500 unit) National Rompetrol Group NV NL, Rompetrol 27.08.2007 Company KZ CH 3'336 (75.00% stake) RO Holding SA KazMunaiGaz Julius Baer (5.47%); Julius Baer Holding CH, 22.07.2007 CH institutional UBS AG CH 3'295 (20% share) other investors (15.23 %) Medi-Clinic BC Partners 02.08.2007 Hirslanden Holding AG CH Luxembourg LU UK 2'990 Ltd. S.a.r.l. Renewable Energy Orkla ASA / NO, Cofra Holding 05.02.2007 NO CH 2'883 Corp. AS Q-Cells AG DE AG 29.10.2007 Jubilee Mines NL AU Xstrata PLC CH various n/a 2'776 Swiss Life Asset Management NL, Swiss Life 19.11.2007 (Nederland) B.V.; SNS Reaal NV NL CH 2'245 BE Holding Swiss Life Belgium; Zwitserleven 26.02.2007 Converium Holding AG CH SCOR SA FR various n/a 1'934 Table 1: Top 10 deals by value. Source: KPMG M&A Yearbook 2007.

102

Yearbook 2008

400 350 300 250 200 150

Number of deals 100 50 0 2004 2005 2006 2007 Not disclosed < 50m 50m - 250m 250m - 500m > 1bn > 1bn

Figure 3: Volume by deal size (in USD). Source: KPMG M&A Yearbook 2007.

14,000 12

12,000 10 10,000 8 8,000 6 CHF m CHF 6,000 4 4,000 Number of IPOs of Number 2,000 2 0 0 2005 2006 2007 Market capitalisation Placed at IPO Placed at IPO Number of IPOs (right scale)

Figure 4: IPO activity at SWX per year. Source: KPMG M&A Yearbook 2007.

80 68 70 60 50 40 40 35 30 19 20 Number of transactions 10 0 2004 2005 2006 2007

Figure 5: Number of PE transactions per year. Source: KPMG M&A Yearbook 2007.

103 S E C A Swiss Private Equity & Corporate Finance Association

Chemicals 7% Healthcare & Life Sciences 12% Other 17%

Consumer 11% Financial Services 17%

Information, Industrial Communication, 21% Entertainment 15%

Figure 6: Number of deals per sector 2007. Source: KPMG M&A Yearbook 2007.

In terms of relative deal activity within the different industries, there were only minimal shifts in deal volume. However, captured values declined sharply in the Healthcare and Life Sciences, Chemicals and in the Other Industries’ sectors but increased notably in the Consumer Goods and Information, Communications and Entertainment (ICE) sector, with Swisscom’s Fastweb acquisition topping the rankings. In the case of Financial Services, the sharp increase in aggregate value is largely due to two large UBS transactions.

In comparison to 2006, the geographical deal flow in 2007 shows a shift towards transactions in which Swiss buyers acquire Swiss targets. As last year, the highest share of transactions is still made up of deals in which a Swiss buyer purchases a foreign target. The volume of Swiss targets acquired by foreign buyers has likewise increased by around 20%. The percentage of foreign acquirers of Swiss targets from Asia Pacific, India, Eastern Europe, Russia and Rest of the World, declined to one third compared to 2006 and the share of Swiss acquisitions in these regions increased only marginally. Overall, the majority of M&A activity observed took place in Western Europe, with roughly two thirds of all targets in Switzerland and Western Europe, and almost three quarters of foreign acquirers domiciled in Western Europe.

104

Yearbook 2008

160 145 140 134 120 97 100 92 80 80 58 60 49 39 40 Number of deals 20 0 Swiss target / Swiss target / Swiss buyer / Swiss seller / Swiss buyer Foreign buyer Foreign target Foreign target 2006 2007 Figure 7: Split of deals by target/buyer/seller 2006/2007. Source: KPMG M&A Yearbook 2007.

Rest of world APAC and India 6% 5% Russia and Eastern Europe 5%

North America Switzerland 11% 39%

Western Europe 34%

Figure 8: Targets of Swiss acquirers by region 2007. Source: KPMG M&A Yearbook 2007.

APAC and India Rest of world 4% Russia and 2% Eastern Europe 1%

North America 21%

Western Europe 72%

Figure 9: Foreign acquirers by region 2007. Source: KPMG M&A Yearbook 2007.

105 S E C A Swiss Private Equity & Corporate Finance Association

In December 2007, UBS announced that Singapore’s Government Investment Corporation, a sovereign wealth fund, is to invest substantially in the bank. This has caused a stir in financial and political circles and triggered some calls for regulatory intervention. From a purely economic perspective, the investment strategies of sovereign wealth funds, specifically from the highly liquid Asia Pacific and Middle Eastern countries, seem to be based rather on sound diversification than on speculative considerations. It is not unreasonable to expect these funds to become even more important players in Swiss M&A. It remains to be seen how hedge funds and sovereign wealth funds will wield their influence and how companies will deal with these, at least for Switzerland, largely new developments.

SCOR’s acquisition of Converium set a strong precedent for successful unsolicited takeovers. Renova’s role at Sulzer, and also the von Finck/Von Roll transaction have received considerable media coverage and increased regulatory scru- tiny. Switzerland has had few hostile takeovers in the past but recent developments could imply that the market will be seeing more of these.

Whilst the previous section gave an overview on the Swiss M&A market in general, the following statistics do cover selected industries or sectors which attracted some interest in 2007. In particular: Healthcare and Life Science; Financial Services; Industrial Markets; and Consumer Markets.

106

Yearbook 2008

Health Care and Life Sciences M&A activity in this sector has been strong in terms of number of deals. However, in contrast to 2007 there were no really large transactions. Key transaction drivers have been very diverse – ranging from strategic transformation and portfolio alignments to access to technology and to new markets.

Announced Target Bidder Seller Value Date Target Country Bidder Country Seller Country (USDm) Ventana Medical F. Hoffmann-La 25.06.2007 US CH Various n/a 3'400 Systems Inc. Roche Ltd Medi-Clinic BC Partners 02.08.2007 Hirslanden Holding AG CH Luxembourg LU UK 2'990 Ltd. S.a.r.l. Private investors; Plus Orthopedics Smith & 12.03.2007 CH UK Müller-Möhl n/a 884 Holding AG Nephew plc Erben- gemeinschaft F. Hoffmann-La BioVeris 04.04.2007 BioVeris Corporation US CH US 593 Roche Ltd Corporation Aspreva Aspreva 18.10.2007 CA Galenica Ltd. CH Pharma- CA 591 Pharmaceuticals ceuticals Table 2: Top 5 deals by value. Source: KPMG M&A Yearbook 2007.

Pharmaceutical companies are transforming their cost and efficiency models and are radically changing their licensing and M&A programs to increase their number of products in the market. Large pharmaceutical companies buying biotech companies to enhance pipelines or to obtain access to technology platforms have been key trends in 2007. Trans- actions include Roche’s acquisition of Therapeutic Human Polyclonals or Novartis’ purchase of an additional stake in Intercell. The industry also saw a successful venture capital exit with the sale of Adnexus Therapeutics – a biotech company partly held by HBM BioVentures – to Bristol Myers Squibb. Galenica has acquired Aspreva Pharmaceuticals, a company listed and headquartered in Canada, which focuses on evidence-based medicines for the amount of USD 591 million. But the pharmaceuticals segment has also seen sales of non-core assets such as Novar- tis’s sale of Gerber baby food business to Nestlé.

The diagnostics segment has been undergoing consolidation on a global scale. Roche has been a key player in this global consolidation by launching a tender offer to acquire Ventana Medical Systems for around USD 3 billion, BioVeris Corporation (Immunochemistry), 454 Life Sciences (DNA sequencing) and NimbleGen Systems (DNA sequencing). Further deals in this sector include US- listed Bio-Rad Laboratories’ acquisition of a 77% stake in the Swiss laboratory

107 S E C A Swiss Private Equity & Corporate Finance Association

diagnostics company Diamed Holding, Australia’s Sonic Healthcare’s acquisition of Swiss-based Medica Laboratory Group and Sweden-based Capio AB’s acquisition of a stake in the Swiss Unilabs SA.

Sonova, the listed manufacturer of hearing aids, suffered a major setback with the German antitrust authorities’ ruling against its planned CHF 3.3 billion acquisition of GN ReSound. Significant transactions in the medical devices segment in 2007 were Smith&Nephew’s acquisition of Plus Orthopedics Holding, Straumann’s acquisition of Etkon AG and Alcon’s acquisition of WaveLight AG.

One of the largest transactions in the healthcare and life sciences sector was the acquisition of the Hirslanden Group by MediClinic, a private hospital group with headquarters in South Africa, from BC Partners, a UK-based private equity firm, for USD 3 billion.

25 50 45 20 40 35 15 30 25 USD bn 10 20 15 Number ofdeals 5 10 5 0 0 2004 2005 2006 2007 Number Value (right scale)

Figure 10: Number and value of deals per year. Source: KPMG M&A Yearbook 2007.

108

Yearbook 2008

20 19 18 16 15 14 12 10 8 7 6 Number of deals 4 3 2 0 Swiss target / Swiss target / Swiss buyer / Swiss seller / Swiss buyer Foreign buyer Foreign target Foreign target

Figure 11: Split of deals by target/buyer/seller 2007. Source: KPMG M&A Yearbook 2007.

Clinical Research / Labs 14% Biotechnology 25%

Other 32%

Pharmaceutical 29% Figure 12: Number of deals per segment 2007. Source: KPMG M&A Yearbook 2007.

109 S E C A Swiss Private Equity & Corporate Finance Association

Financial Services The Swiss financial services sector experienced higher M&A deal volumes than in the previous three years, led by the international expansion of Swiss banks and the strategic repositioning of Swiss insurance companies. Three of the five largest value transactions took place in the insurance industry.

Announced Target Bidder Seller Value Date Target Country Bidder Country Seller Country (USDm) Government of Singapore Investment SG, 10.12.2007 UBS AG CH UBS AG CH Corporation; other 11'535 Middle Eastern strategic investor Julius Baer (5.47%); Julius Baer Holding CH, 22.07.2007 CH institutional UBS AG CH (20% share) other 3'295 investors (15.23 %) Swiss Life Asset Management (Neder- NL, Swiss Life 19.11.2007 SNS Reaal NV NL CH land) B.V.; Swiss Life BE Holding AG 2'245 Belgium; Zwitserleven Converium 26.02.2007 Converium Holding AG CH SCOR SA F CH Holding AG 1'934 Swiss Life 07.11.2007 Banca del Gottardo CH BSI SA CH CH Holding 1'626 Table 3: Top 5 deals by value. Source: KPMG M&A Yearbook 2007.

UBS continued its global expansion with transactions in Korea and France. It also acquired minority stakes in Philippine and Russian banks. The bank also disposed of its 20.7% stake in Julius Baer, originally received as partial compensation for selling certain entities to Julius Baer in 2005. In December, UBS received commitments from the Government of Singapore and a Middle Eastern investor to purchase USD 11 billion of UBS notes to be converted into ordinary shares within two years. The two largest banking deals in 2007 were BSI's acquisition of Banca del Got- tardo from Swiss Life, and Rabobank's acquisition of a majority stake in Bank Sarasin. Other notable banking transactions were Julius Baer’s acquisition of a portfolio manager in Monaco, EFG’s acquisitions of a US hedge fund and a Canadian wealth manager, and Saxo Bank’s purchase of Swiss Synthesis Bank.

Swiss Life disposed of its Dutch and Belgian businesses for USD 2.2 billion and its abovementioned banking subsidiary, Banca del Gottardo. The USD 1.6 billion sale of Banca del Gottardo appears to have supported the acquisition of AWD, a leading European independent financial advisor.

110

Yearbook 2008

In the reinsurance sector, Converium was acquired for USD 1.9 billion by SCOR, a French reinsurer, in an unsolicited public tender offer, and Swiss Re purchased ZFS’ UK annuity business. ZFS continued its strategy of expanding its customer, product and distribution capabilities with four bolt-on acquisitions in Germany, Ireland, the US and Russia. Other notable insurance transactions were Nationale Suisse’s disposals of its French motor insurer and Swiss mortgage operations to focus on its niche core business and Baloise’s acquisitions in Luxembourg, Croatia and Switzerland. In addition, Telekurs Holding acquired Fininfo, a European financial information supplier, for USD 345 million and later on, the Telekurs Group, SWX Group and SIS Group merged into Swiss Financial Market Services.

30 70

25 60 50 20 40 15 USD bn 30

10 Number of deals 20 5 10 0 0 2004 2005 2006 2007

Number Value (left scale)

Figure 13: Number and value of deals per year. Source: KPMG M&A Yearbook 2007.

35 31 30 25 19 20 15 11 10

Number of deals 5 5 0 Swiss target / Swiss target / Swiss buyer / Swiss seller / Swiss buyer Foreign buyer Foreign target Foreign target

Figure 14: Split of deals by target/buyer/seller. Source: KPMG M&A Yearbook 2007.

111 S E C A Swiss Private Equity & Corporate Finance Association

Financial advisory 12% Other 6% Investment company 27%

Banking 34% Insurance 21%

Figure 15: Number of deals per segment 2007. Source: KPMG M&A Yearbook 2007.

Industrial Markets Despite a very strong global economy and strong financial markets at least during the first half of 2007, Swiss industrial markets deals all remained below the USD 1 billion threshold.

Announced Target Bidder Seller Value Date Target Country Bidder Country Seller Country (USDm) Everest 20.04.2007 Sulzer Ltd. CH Beteiligungs AT Sulzer AG CH 984 GmbH Chicago Bridge 27.08.2007 ABB Lummus Global US & Iron Company NL ABB Ltd CH 950 N.V. (CB&I) ABB limited; Neyveli Abu Dhabi Project (50 %); IN, 06.02.2007 National Energy AE ABB Ltd CH 490 Jorf Lasfar Energy MA Company Company Sca (50 %) CVC Capital Alpha Associes 18.07.2007 Rhiag Group Ltd CH FR Partners UK 483 Conseil Limited Montagu Private Equity HCT Shaping Applied LLP 26.06.2007 CH US GB 474 Systems SA Materials Inc (formerly HSBC Private Equity Ltd) Table 4: Top 5 deals by value. Source: KPMG M&A Yearbook 2007.

The lack of high value deals in Switzerland belies the underlying interest companies have shown in closing M&A transactions.

112

Yearbook 2008

Several industrial players such as ABB, Forbo, Burckhardt Compression and Schulthess have indicated their intention to make acquisitions. However, finding suitable targets at reasonable prices were the main stumbling blocks in 2007. The largest industrial “deal” in 2007 was Renova’s investment in Sulzer, which gave rise to fierce discussions in the Swiss financial and political arena and led to further lobbying in favor of more stringent disclosure rules. Another case was the Von Roll/von Finck transaction where the Von Roll board of directors did not recommend the von Finck mandatory offer of CHF 980 million but market conditions have led to the von Finck family currently holding more than 50% of the company’s shares. Two of the top five industrial deals in 2007 were disposals by ABB and ABB Equity Ventures, with the major sale of its Lummus Global business to Chicago Bridge & Iron Company for USD 950 million. The secondary buyout of Rhiag Group and the sale of HCT Shaping Systems by Montagu Private Equity were examples of the activity of private equity players in the industrial sector. In fact, an impressive number of the 2007 transactions involved private equity or a financial sponsor.

6 90 80 5 70 4 60 50

USD bn 3 40 2 30 20 Number of deals 1 10 0 0 2004 2005 2006 2007 Number Value (left scale)

Figure 16: Number and value of deals per year. Source: KPMG M&A Yearbook 2007.

113 S E C A Swiss Private Equity & Corporate Finance Association

30 27 27 25

20 19

10 9 Number of deals 5

0 Swiss target / Swiss target / Swiss buyer / Swiss seller / Swiss buyer Foreign buyer Foreign target Foreign target

Figure 17: Split of deals by target/buyer/seller 2007. Source: KPMG M&A Yearbook 2007.

Automotive 8%

Other 12%

Electronics Industrial 11% products and services 51% Automation 6%

Manufacturing 12% Figure 18: Number of deals per segment 2007. Source: KPMG M&A Yearbook 2007.

114

Yearbook 2008

Consumer Markets The consolidation trend continues in the Swiss retail food market despite the already strong concentration within the segment. However, to prevent any single player from dominating the market, the Swiss Competition Commission eyes this market carefully. This creates additional challenges to competitors vying for quality targets. Gaining market share and establishing presence in emerging markets remains the key deal rationale for Swiss companies.

Announced Target Bidder Seller Value Date Target Country Bidder Country Seller Country (USDm) Gerber Products 12.04.2007 Company US Nestle SA CH Novartis AG CH 5'500 (baby food unit) Selecta Management Allianz Capital Compass 14.05.2007 CH DE GB 1'529 AG Partners GmbH Group plc Philip Morris Groupe Carso 18.07.2007 Cigatam MX CH MX 1'100 International SA de CV Wyoming 22.10.2007 Seiyu Ltd JP CH Saiyu Ltd. JP 870 Holding GmbH Dipl Ing Fust AG; Jelmoli 29.05.2007 netto24 AG CH Coop Schweiz CH CH 806 Holding AG (80% stake) Table 5: Top 5 deals by value. Source: KPMG M&A Yearbook 2007.

2007 started with a big bang when Migros announced the acquisition of Denner. The transaction enabled Migros to increase its market share to nearly 30%, putting it further ahead of competitor Coop. The consolidation of the number one and number three in the market gave rise to debates on whether the merged entity would dominate the market. The transaction was finally approved with a number of conditions and on the assumption that the entrance of foreign players will ease the situation. Coop, number two in the market, faced similar regulatory challenges. Its plan to acquire twelve stores from Carrefour is still being reviewed while its acquisition of Fust, the Swiss electrical and electronic goods retailer, was approved with certain conditions.

Nestlé continues to be an active purchaser and concluded three acquisitions in 2007. Among them is the acquisition of Gerber, the US-based baby food brand, from Novartis with a value of USD 5.5 billion the largest deal in the industry in 2007. In addition, Nestlé raised its market share in the Swiss mineral water market to almost 25% with the acquisition of Henniez, and established itself in the premium chocolate segment in Russia by acquiring the Russian confectioner Ruzs- kaya.

115 S E C A Swiss Private Equity & Corporate Finance Association

Barry Callebaut has been expanding its chocolate manufacturing capacity through the acquisitions of Food Processing International, the US-based producer of cocoa products and Nestlé’s San Sisto and Dijon chocolate factories.

Geographic diversification into faster growing emerging markets has been the main acquisition rationale for consumer market players.

14 50 45 12 40 10 35 8 30 25 6

USD bn 20 4 15 Number of deals 10 2 5 0 0 2004 2005 2006 2007

Number Value (left scale)

Figure 19: Number and value of deals per year. Source: KPMG M&A Yearbook 2007.

16 15 14 12 12 10 10 8 6 5

Number of deals 4 2 0 Swiss target / Swiss target / Swiss buyer / Swiss seller / Swiss buyer Foreign buyer Foreign target Foreign target

Figure 20: Split of deals by target/buyer/seller. Source: KPMG M&A Yearbook 2007.

116

Yearbook 2008

Apparel 21% Food 35%

Retail 44%

Figure 21: Number of deals per segment 2007. Source: KPMG M&A Yearbook 2007.

117 S E C A Swiss Private Equity & Corporate Finance Association

Outlook Until the full effect of the current sub-prime lending crisis and the knock-on effect on the global economy can be better assessed, we may see a more restrained appetite for M&A activities in 2008. However, with falling stock prices the M&A market might experience an increase in “public to private” transactions, whereby particularly cash rich companies, may find themselves to be a takeover target and will need to position themselves and act accordingly. Although the credit crunch definitely has had and will continue to have a strong impact on large transactions we believe that smaller transactions will continue to take place at a similar pace as in 2007.

Claudio Steffenoni Bank am Bellevue AG Head Corporate Finance Corporate Finance Seestrasse 16 8700 Küsnacht [email protected]

Barbara Chandra KPMG AG Senior Manager Transaction Services & Corporate Finance Badenerstrasse 172 8026 Zurich [email protected]

Patrick Bachmann KPMG AG Consultant Transaction Services & Corporate Finance Badenerstrasse 172 8026 Zurich [email protected]

Caveat This study is based on mergermarket® data and KPMG research, covering deals announced in 2007. The consideration of individual transactions and the allocation of transactions to specific industry segments is based on our judgment and is thus subjective. We have not been able to extensively verify all data and cannot be held responsible for the absolute accuracy and completeness thereof. Analyses of different data sources and data sets may yield deviating results.

The following notes pertain to data contained in the mergermarket® database: Deals are included where the deal value is greater than or equal to the equivalent of EUR 5m. Where no deal value has been disclosed, deals are include if the turnover of the target is greater than or equal to the equivalent of EUR 10m. Deals are included where a stake of greater than 30% has been acquired in the target; if the stake is below 30% the deal will be included if the value exceeds the equivalent of EUR 100m. Activities excluded from the data include property transactions and restructurings where ultimate shareholders’ interests are not changed. Letters of intent, heads of agreement and other non-binding agreements are not included in the data sets.

118

Yearbook 2008

Review of Swiss Public M&A in 2007

Introduction As we approach the end of the first quarter of 2008, the record M&A activity of 2007 seems very far away. M&A history books will note the first half of the year 2007 as the one where all the stars were aligned: positive economic outlook, high overall demand from the US and Asia, stock market valuations at record highs and boosting CEO confidence, widely available capital were key drivers underlying an unprecedented wave of transactions. Thanks to a strong transaction pipeline the impact of deteriorating market conditions in the second half of 2007 has been limited (see historical overview of M&A cycles in figure 1):

2'500 25'000

2'000 20'000

1'500 1'398 15'000 814 919 806 809 894 458 629 701

1'000 537 10'000 705 Number of deals 465 Volume in USD bn 345 543 352 441 307 324

500 245 5'000 992 1'083 983 239 964 233 933 329 928 880 839 779 764 672 641 609 523 470 451 451 413 410 366 357 0 300 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Rest of World Europe DJ No. of deals Figure 1: M&A cycles 1997 – 2007. Source: Thomson Financial and Factset.

In Switzerland, the picture is similar. Both 2006 and 2007 mark the peak of a growth in M&A activity, measured by number of transactions as well as volumes. However, the year 1997 with transactions such as Schweizerischer Bankverein / Schweizerische Bankgesellschaft, Roche / Corange or Credit Suisse Group / Winterthur-Versicherungsgesellschaft and a total volume of CHF 133bn still sets the record to beat.

119 S E C A Swiss Private Equity & Corporate Finance Association

240 8000 1'000 9,000 955 7000 6000 840 200 7,000 5000 759 800 4000 695 6,000 685 160 3000 2000 585 133 536 555 537 600 1000 120 460 467 0 103 102 01/ 01/ 1997 16/ 05/ 1998 28/ 09/ 1999 09/ 02/ 2001 24/ 06/ 2002 06/ 11/ 2003 20/ 03/ 2005 02/ 08/ 200692 15/ 12/ 2007 -1000 400 78 76 Number of deals Volume in USDbn 80 67 48 53 35 200 0 40 19

0 0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007(1) Volume in USD bn No. of deals SPI Index Figure 2: Swiss M&A volumes 1997–2007. Source: SDC. Note: (1) Excludes any convertible transactions.

Unsolicited M&A activity The factors supporting the general M&A activity in 2007 also led unsolicited M&A activity globally to new historical highs; 2007 was the second year in a row that saw USD 500bn+ of unsolicited transactions. Interestingly enough, the key drivers were strategic, cross-border intra-industry transactions, such as BHP Billiton / Rio Tinto or RFS Holdings / ABN AMRO. Very large transactions were indeed a strong component of unsolicited activity, the five largest contributing 59% to global unsolicited volumes. Accordingly, whereas unsolicited transactions typically represent 10% of deal volumes, this number increased to 14% in 2007, a level not seen since 1999. Most importantly, statistics for 2007 show that 60% of the unsolicited transactions with a value in excess of USD 100m led to a change of control of the target company, in half of these cases by a competing bidder to the original offeror.

120

Yearbook 2008

19%

13% 13% 14% 11% 12% 9% 9% 10% 9% 7% 7% 8% 5% 6% 5%

3% 4%

233 188 167 159 146 151 145 136 143 132 137 111 110 115 115 105 97 82

52 33 31 28 60 150 96 188 105 856 159 244 64 113 261 259 571 719 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Hostile volume in USD bn Number of global announced hostile offers % of total announced Figure 3: Global announced transactions – hostile offers. Source: Thomson Financial Securities Data Company, Inc. Note: Hostile volume as a percentage of global dollar volume of announced and withdrawn deals.

Swiss unsolicited M&A activity Unsolicited public M&A resulting in a change of control situation in Switzerland was marked by two transactions: the conclusion of the epic battle for change of control of SIG, in which Rank Group won the upper hand and Scor’s unsolicited takeover of Converium.

Rank Group/SIG is of particular interest as it stands for the most contested takeover in Swiss public history. After an initial unsolicited offer being posted by the CVC/Ferd consortium, the offer price was increased in a total of three times by the bidding parties. Both offerors used a stake-building tactic aiming to win a competitive advantage: CVC/Ferd held approx. 9% in SIG by the time of the publication of their offer and increased this position to roughly 11% when they increased their offer above Rank Group’s. However, CVC/Ferd also opened a flank in agreeing to top-up rights in case of an increased/competing offer with the seller of their initial stake – a flank that SIG attacked vigorously. While Rank Group did not hold any shares upon launch of their offer, it took the decision to increase its offer only on the basis of a strong probability to win the day. Conse- quently, Rank Group opted for a street sweep the night before its offer increase and succeeded in acquiring 22% of SIG’s shares. The announcement of Rank Group’s acquisition of a 22% stake in SIG further emphasized its intention to hold

121 S E C A Swiss Private Equity & Corporate Finance Association

the stake as long-term investment. Two days later, CVC/Ferd sold their stake into the market and announced to withdraw. Stake-building not only before but also during a competitive public process has therefore become a critical success factor in competitive situations. Coincidentally, Rank Group’s acquisition of SIG can also be considered as the first take private transaction by a quasi-financial sponsor since Rank Group financed the transaction in a large part with debt.

In contrast to Rank Group/SIG, Scor’s unsolicited takeover of Converium demonstrated that the ability to build up a significant stake prior to the announcement of an offer is a material, if not decisive advantage. According to information published in Scor’s Schedule 13D (see relevant SEC website) of 16 February 2007, Scor had acquired since November 2006 a stake of approx. 5% in Converium through open market purchases; on 16 February Scor acquired an option to a further 3.3% position (settled on 19 February 2007) and on the same day entered into an agreement to acquire 9.7% of Converium in shares and 10.1% in call options with Patinex, a investment vehicle of Mr. Ebner and into an additional agreement with Alecta pensionsförsäkring, a Swedish pension fund over a stake of 4.8%. On 19 February 2007 and as a reaction to Converium’s public rebuttal of its approach, Scor communicated to the market its intention to acquire Converium and the fact that it owned a 32.9% stake. After Scor increased its consideration in the context of the offer process, the board of directors of Converium recommended Scor’s offer and the latter was accepted by a vast majority of Con- verium’s shareholders. Note that despite a revision of disclosure obligations under the relevant Swiss laws, stake-building as described could to some extent still be replicated assuming the existence of shareholders with significant stakes and a willingness to sell/exchange these shares.

Another aspect of these two takeover battles is the increased use of legal barrage in a Swiss public takeover context. Whereas a Swiss Takeover Board recommen- dation used to be quasi rule of law, rejecting such recommendations has turned into a tactical element to win time or other benefits against an opponent. The legal exchange between SIG and CVC/Ferd (and to some minor extent Rank Group) resulted in 16 recommendations by the Swiss Takeover Board, two rulings by the Federal Banking Commission and one by the Swiss Federal Court. In the case of Scor/Converium the tally was five recommendations by the Swiss Takeover Board, one by the Federal Banking Commission and possibly one matter to be decided by the Swiss Federal Court.

122

Yearbook 2008

Last, but not least, both transactions described above were promoted or facilitated by activist shareholders. In the case of SIG, Sterling Strategic Value Ltd. had been trying to influence the strategy of SIG and get new board members elected, but ultimately sold its stake to CVC/Ferd. In Scor/Converium, Mr. Ebner facilitated a transaction when he agreed to exchange his Converium stake into cash and Scor shares. Other examples include Laxey Partners’ stake of 24% in Saurer sold to OC Oerlikon ahead of the launch of a public tender offer by the latter in 2006.

Conclusion Although Swiss M&A league tables for Q1 2008 have not been collated yet, M&A deal volumes will undoubtedly reflect the current turbulence in the capital and illiquidity in the credit markets. But, as share prices fall, activist shareholders will identify value gaps in public companies and seek to employ their tool set to close these, be it through changes in corporate governance, more aggressive capital structure or a change of strategy of listed corporates.

Amidst the uncertainty in the capital markets, one could however argue that strategic activity should and will remain vibrant. In falling markets for asset values, history tells us that M&A activity, after a pause, often accelerates. The fundamental drivers of domestic and cross-border consolidation are alive. For many companies, especially those with a strong record and position in the capital markets, we believe that current conditions will create more opportunities than they destroy. The ability to execute is strong for corporate buyers and we expect that to remain the case in 2008.

Dr. Marco Superina Credit Suisse Director, Head M&A Switzerland Investment Banking Uetlibergstrasse 231 8070 Zurich [email protected]

123 S y E y C y A Swiss Private Equity & Corporate Finance Association

Reporting Legal & Tax

2007: Review and Outlook

The new Swiss Limited Partnership As per January 1, 2007, the revised Swiss Act on Collective Investment Schemes (the “CISA”) came into force and introduced inter alia the limited partnership for collective investments (the “Swiss LP”) into the Swiss Law. Regulated by the Swiss Federal Banking Commission (the “SFBC”) the Swiss LP is limited to alternative collective investments of qualified investors and shall further the attractiveness of the Swiss financial center by introducing into our legal system the limited partnership, the most popular legal form for collective investments in private equity and hedge funds.

Due to its flexibility and because of the possibility to avoid complicated and expensive offshore structures, the Swiss LP is an attractive alternative to the offshore limited partnerships used in the past (cf. SECA Yearbook 2007, pages 96ff. on the Swiss LP for more details).

The SECA developed together with the Swiss Funds Association (“SFA”) the model documentation for the Swiss LP, which gained the official approval of the Swiss Banking Commission (the “SFBC”). SECA is pleased to be able to provide you with an English translation of the model documentation (cf. pages 352).

Unfortunately, the taxation of the carried interest (“carry” for short) of the general partner company and above all the individuals owning and managing the company is still controversial in Switzerland and has impeded the success of the new Swiss LP. In light of this uncertainty the internationally operating Swiss private equity companies as well as the fund of private equity funds stuck to the established offshore structures and jurisdictions. So far only one private equity house dared to establish the new Swiss LP: Energy I LP of Aravis Ventures, a member of our association.

In order to ensure the success of this new and interesting investment vehicle we need a clear, internationally competitive taxation of the private equity manager, notably of the carried interest. Currently, SECA, the Swiss Funds Association and the Swiss Banking Association are in comprehensive discussions with the competent authorities, especially the Federal and Cantonal Tax Authorities in order to

124

Yearbook 2008

soon resolve this vexing issue. The legal basis for a competitive solution is in place; so far the dialogue proved positive and encouraging. We are confident that we will overcome the mentioned obstacle in the near future and pave the way for the further success of the new Swiss LP.

Taxation of certain buy-out transactions and general corporate tax reform II The new legal provisions regarding the Indirect Partial Liquidation (German: Indirekte Teilliquidation) and the Transposition (German: Transponierung) came into force on January 1, 2007. On account of the urgency of the two topics the parliament resolved to separate them from the broad overhaul of the corporate tax system, the so called corporate Tax Reform II, and grant these topics fast track treatment.

Our association heavily lobbied for the new law and is proud that the legal and political deadlock over these issues which were a serious impediment to buy-out transactions and succession planning in Switzerland could be over-come. Of course, a number of issues remained unresolved. The publication of the definitive version of the pertinent directive by the Federal Tax Administration in November 6, 2007 helped to clarify a number of the open issues.

New legislation in the M&A area The latest developments in the area of capital and take over law made clear that a revision of the Stock Exchange Ordinance (the “SEO-SFBC”) and the Take Over Ordinance (the “TOO-SFBC”) is of importance especially regarding disclosure requirements in connection with sneak accumulations of substantial stock holdings in public companies. The unfriendly take-over of Saurer AG by OC Oerlikon Corporation AG lead to an urgent partial revision of the SEO-SFBC. OC Oerlikon Corporation AG bypassed the disclosure requirements by acquiring call options with cash settlement not being comprised by article 13 SEO-SFBC. This first partial revision came already into force on July 1, 2007.

A second, more extensive partial liquidation of the SEO-SFBC came into force on December 1, 2007. Simultaneously the tightening of the disclosure requirements regarding qualified participations in stock listed Swiss companies in the stock exchange act, passed by the parliament on June 22, 2007, will become effective.

Last but not least the long awaited corporate tax reform II has been passed by the parliament. This reform shall lead to a relief of the investors by reducing the economic double taxation and hence also to a relief of the smaller and medium

125 S y E y C y A Swiss Private Equity & Corporate Finance Association enterprises. With the introduction of the “capital brought in”-principle and the possibility to obtain an income tax credit for the capital tax, the international competitiveness of Switzerland is further improved. As the Cantons shall implement the law within two years, the new legislation shall come into force in two steps: The first part will become effective on January 1, 2009, the second part two years later, on January 1, 2011. (cf. article by Barbara Brauchli on pages 127ff.).

Outlook This year, the improvement of the tax situation around the Swiss LP will be one of our top priorities. Further, we are working on a model documentation for Swiss Venture Capital investments together with the VC chapter.

From a tax (and also legal) prospective, we will closely monitor the developments in the area of the Indirect Partial Liquidation as well as the implementation of the corporate tax reform II.

Dr. iur. Hannes Glaus Lustenberger Glaus & Partner Partner Wiesenstrasse 10 P.O. Box 1073 8032 Zurich [email protected]

126

Yearbook 2008

Developments in Swiss corporate tax law

1. Developments in the cantons For Switzerland, 2007 has been a year rich in tax wise developments. Many cantons have implemented or at least decided to implement corporate tax reforms by lowering the tax rates for resident companies. In addition, there has of course been the Obwalden degressive tax case which made the national and international headlines but which eventually foundered at the Federal tribunal. While Ob- walden’s degressive marginal tax rates concerned individual income taxes, both Obwalden and Appenzell Ausserrhoden introduced a record-low 6% cantonal and communal tax rate for corporations leading to an overall effective tax rate of 12.66% (including the Direct federal tax). Thanks to the federal nature of Switzer- land, these reforms have shown that political and legal changes on the regional level can be implemented much faster than in other, more centralistic countries. So far, many cantons have proven to be very agile in adapting to evolving economic needs - even if some innovations could seem to be too far-reaching for some.

2. Disagreement between Switzerland and the European Union On 13 February 2007, the European Commission officially decided that it considered the tax rules for certain types of companies to be incompatible with the Free Trade Agreement concluded in 1972 between the European Community and Switzerland. The Commission indeed considered that the beneficial taxation of management companies, holding companies and mixed companies constituted unlawful state aid precluded by the Free Trade Agreement as it considered them to be of a specific nature and to distort cross-border competition. This decision marked a milestone in a discussion that had been ongoing since 2005. In the course of 2007, the Commission obtained a mandate from the Council of the European Union to engage in negotiations with Switzerland in order to have the tax rules in question abolished. From the beginning, the Swiss government has rebutted the Commission’s view and has refused to negotiate on the issue. The Swiss government was however open for a dialogue with a view to explaining the Swiss tax system and its particularities to the European Commission. Several meetings have taken place since then between the delegations. It appears though that the two positions remain somewhat incompatible.

127 S E C A Swiss Private Equity & Corporate Finance Association

3. Corporate tax reform II 3.1. Introduction On 24 February 2008, the Corporate tax reform II (Unternehmenssteuerreform II, “USTR II”) was accepted in a popular vote. The USTR II covers several tax aspects mostly concerning small and medium entities (SMEs). The major part of the reform package was undisputed. However, one element led to an ongoing political controversy. One of the goals of the reform was to mitigate the economic double taxation of profits of corporations. In the USTR II it was decided to do this on the level of the shareholder (partial taxation of dividends) instead of reducing corporate tax rates. If an individual now holds at least 10% of a company’s capital, the new law provides that dividends be taxed only at 50% or 60% respectively, depending on whether the participation is part of the business or private assets of the shareholder. Nevertheless, the suggested amendments have been accepted and will enter into force over the next few years (the provisions on the partial taxation of dividends will be effective as of 1 January 2009, regarding the remaining provisions please see below). The cantons are free to choose whether and to what extent they want to mitigate the economic double taxation.

3.2. Amendments of existing laws Aside from the above-mentioned relief on dividend income, the USTR II will bring about the following amendments and tax reliefs: Extension of the participation relief: In order to benefit from a relief on income from participations or from gains from the disposal of participation, a company’s stake in the subsidiary must now amount to at least 10% (instead of 20%) or have a market value of at least CHF 1 million (instead of 2 millions). As already until now, regarding capital gains, a holding period of one year is required (entry into force: 1 January 2011). Introduction of the capital contribution principle (Kapitaleinlageprinzip): A very important feature of the new law is that capital contributions of shareholders which are not nominal capital can be paid back to them without triggering income or withholding tax consequences (entry into force: 1 January 2011). Imputation of the corporate income tax on the annual capital tax: The cantons can allow for a credit of the corporate income tax on the capital tax. This can potentially lead to a zero annual capital tax (entry into force: 1 January 2009). Reduction of the issuance stamp duty: Cooperatives now benefit from a tax exempt equity amount of CHF 1 million. In addition, in the case of a recapitali- zation becoming necessary for a corporation, a tax free threshold of CHF 10

128

Yearbook 2008

million is available. As long as losses carried forward are off-set by a recapitali- zation, no limitation applies (entry into force: 1 January 2009). Several tax reliefs for partnerships: In particular, the following transactions are subject to deferred or alleviated taxation: the liquidation of a business, the transfer of real estate from business to private assets, the replacement of fixed assets (roll-over relief; entry into force: 1 January 2011).

4. Indirect partial liquidation 4.1. Introduction As already reported in last year’s yearbook (p. 102 et seq.), the Swiss parliament has enacted very important provisions regarding the theories on the indirect partial liquidation and on the transposition which entered into force in the beginning of 2007 (i.e. before the USTR II). Both theories deal with abusive behaviours and arrangements which make use of the fact that under Swiss law private capital gains are tax-free by “transforming” taxable (dividend) income into tax-free capital gains. In November 2006, the federal tax administration (FTA) published a draft circular which elaborated on the administration’s understanding of the law. The circular came under considerable criticism by legal scholars and one year later, in November 2007, the FTA published the circular’s final version. In many regards the final version has brought improvements compared to the draft. As a reminder, the indirect liquidation concept leads to a taxation of an individual selling his participation under the following conditions: The seller sells a participation of at least 20%; The shares were held as private assets and are being transferred into the business property of the buyer (typically a company); On the date of the transaction, the target company has non-operating assets which could be distributed as a dividend; Within five years after the transaction, the target company makes a distribution of such non-operating assets which were already distributable at the time of the transaction; The seller has co-operated with the buyer regarding that distribution.

4.2. Qualifying participation The transaction can be harmful if it involves more than 20% of the target company’s capital. If an individual seller acts jointly with other sellers (i.e. based on a common decision) or if he sells his participation on a staggered basis and thereby reaches the 20% threshold, he is considered to fall within the scope of the indirect partial liquidation. However, the acceptance of a public tender offer is not considered to constitute such a joint sale.

129 S E C A Swiss Private Equity & Corporate Finance Association

4.3. Harmful distribution If a distribution is made from the target company to the buyer, it is considered to be harmful under the following conditions:

It takes place within five years after the sale (from the moment of signing); It is made out of distributable reserves relating to non-operating assets; The seller has cooperated in view of the distribution.

The circular’s final version stipulates that the five-year period in question begins at the moment of signing (and not closing). In addition, it is now explicitly stated that the distribution must trigger a diminution of the target’s net assets in order to be considered potentially harmful. This is of great interest as the draft seemed in particular to consider loans and securities to be problematic. It is now however made clear that such loans or securities are harmful only if they cause an economic loss to the target company. As regards financing questions, this will considerably facilitate transactions.

Whether existing substance is “distributable” is a question of commercial law which will need to be answered on the basis of the statutory balance sheet of the target. An important improvement is made in the circular concerning the qualifying substance. Distributions from reserves which are accumulated after the end of the last financial year before the sale, e.g. in particular distributions from profits generated after the transfer, can be made without triggering an indirect partial liquidation. However, one new limitation has been introduced in the final version: If any losses are incurred after the sale with the effect that a distribution would use “old” retained earnings, such distribution is considered harmful.

Whether assets are of a non-operating nature is to be determined according to economic standards and with regard to the entire group. If the distributed amount exceeds the profits generated since the sale, it is presumed to be of a non- operating nature.

4.4. Co-operation The criterion of the seller’s co-operation is the linking element between distributions made by the buyer after the purchase and the taxation of a deemed dividend in the hands of the seller. If the seller knew or should have known that the buyer would finance the purchase out of assets of the target company he is considered to have co-operated in the transaction in order to realize a tax-free capital gain

130

Yearbook 2008

instead of taxable dividend income (the latter being made by the buyer company in a tax neutral way).

The final circular is still very strict on the interpretation of the co-operation criterion. It does in particular (and in our view: wrongly) not require any abusive intentions on the side of the seller. The parliamentary deliberations were nevertheless quite clear on this point: The lawmakers repeatedly emphasized their intention to counter abusive behaviours. However, the law’s text does unfortunately not make any explicit mention of abuse which leads the FTA to entirely disregard subjective elements of the seller. The FTA explicitly adopts an “objective” approach based on the circumstances. Typically, the seller is considered as co- operating if he grants a loan to the buyer or if he takes preparatory steps in view of a subsequent distribution of liquid assets to the buyer. Also if the buyer is obviously not able to finance the purchase out of his own means, the seller should assume that the target’s assets will likely be used to pay the purchase price. In such cases, the seller should expect to be taxed on a deemed dividend income. However, even if the buyer is obviously a well-healed company, the seller cannot invoke this sole fact in order to be discharged. Nevertheless, as the official proto- cols show, the lawmakers clearly did not want to require the seller to virtually make inquisatory investigations but were of the opinion that an ordinary assess- ment of the buyer’s financial situation should be sufficient. Thus the circular clearly seems to go too far as it does not take into account the lawmakers’ intention.

4.5. Tax base and advance tax rulings Should a harmful distribution be made by the buyer, the seller becomes tax liable for the lesser of the following amounts: Purchase price, distributed amount, distributable reserves or non-operational assets.

It will be of particular interest to see whether and how far advance tax rulings will be granted by the tax administrations. Such rulings can be granted before the transaction, and can in particular deal with the qualification of planned distributions. If a distribution qualifies as harmful, the ruling can also cover the determination of non-operational assets, their valuation and the co-operation criterion.

131 S E C A Swiss Private Equity & Corporate Finance Association

4.6. Conclusion The tax administration’s circular on the concept of indirect partial liquidation is highly welcome as it clarifies important questions which are important in the context of the acquisition of participations from individuals. SPAs in the future will still need to cover the issue, but it will be possible to take into account the improvements in the law and in the circular which will facilitate transactions.

However, on a different note, it can be seen that what, in the beginning, could have made sense as a concept of anti-abuse, has now rather become an expres- sion of the FTA’s and the Federal tribunal’s unfortunate tendency to narrow the scope of the principle of non-taxation of private capital gains.

5. Retrospect and Perspectives The last year has been very important for the Swiss tax landscape. Unlike other countries, tax laws in Switzerland do not usually undergo constant change. The last few months have however shown that the political environment in particular on the cantonal level is rather favourable to sensible tax reforms. In the light of international tax competition (in particular the European Union’s claims), further corporate tax reforms will however be inevitable in order to improve Switzerland’s stand as a top international business location. Yet, after the success of the USTR II, it appears that such reforms, which would eventually reduce the tax burden of corporations, are likely to face fierce political opposition. It remains to be seen how determined and especially how convincing the tax reformers will be in the future.

Barbara Brauchli Rohrer PricewaterhouseCoopers AG Partner Birchstrasse 160 M&A Leader TLS Switzerland 8050 Zurich [email protected]

Martin Büeler PricewaterhouseCoopers AG Director Birchstrasse 160 Tax & Legal Services 8050 Zurich [email protected]

132

4 > D S y E y C y A Swiss Private Equity & Corporate Finance Association

Reporting SECA Evening Events

Swiss Limited Partnership: Neuerungen durch das Kollektivanlagegesetz Tuesday, January 23, 2007, Widder Hotel, Zurich

Speakers Matthäus Den Otter Swiss Funds Association SFA Gérard Fischer SFA & CEO Swisscanto Holding Hannes Glaus Lustenberger Glaus & Partner Hans Markvoort LGT Capital Partners AG Victor Meyer PricewaterhouseCoopers AG Torsten Petersen Säntis Capital Investment AG

Participants 85

Event partner Lustenberger Glaus & Partner, Swiss Funds Association SFA

Pensionskassen und Private Equity Tuesday, March 13, 2007, Widder Hotel, Zurich

Moderation Roberto Paganoni LGT Capital Partners AG

Speakers Marco H. Buri Complementa Investment-Controlling AG Philip Jones London Pensions Fund Authority Thomas Kubr Capital Dynamics

Participants 50

Event partner Capital Dynamics, LGT Capital Partners AG

134 Yearbook 2008

Seed Capital and Business Angels Tuesday, April 24, 2007, Widder Hotel, Zurich

Moderation Christian Wenger Wenger & Vieli Rechtsanwälte

Speakers Nicolas Berg Redalpine Venture Partners AG Ulrich Geilinger HBM Partners AG Florian Schweitzer BrainsToVentures AG Stefan Tirtey Doughty Hanson Technology Ventures

Participants 60

Event partner Wenger & Vieli Rechtsanwälte, CTI Invest

Swiss Entrepreneurial Success Stories Entrepreneurship, Strategie & Kultur aus unternehmerischer Erfahrung Tuesday, June 19, 2007, Widder Hotel, Zurich

Moderation Massimo S. Lattmann Venture Partners AG Sita Mazumder IFZ / HSLU - Wirtschaft

Speakers Alfred Gantner Partners Group Thomas Gutzwiller IMG Peter Niederhauser Redalpine Venture Partners AG Andy Rihs Sonova Holding AG

Participants 85

Event partner Venture Partners AG, Redalpine Venture Partners AG

135 S y E y C y A Swiss Private Equity & Corporate Finance Association

Wertsteigerung von Wachstumsunternehmen durch Private Equity Tuesday, September 18, 2007, Widder Hotel, Zurich

Moderation Cuno Pümpin Invision Private Equity AG

Speakers Beat Bühlmann Horizon21 Private Equity Stefan Heppelmann Stern Stewart & Co. Martina Merta Netviewer AG Bernd Pfister Invision Private Equity AG

Participants 145

Event Partner Invision Private Equity AG

Private Equity in aller Munde - eine kritische Standortbestimmung Tuesday, November 27, 2007, Widder Hotel, Zurich

Moderation Martin Spieler Handelszeitung

Speakers Leonid Baur Sal. Oppenheim jr. & Cie. Corporate Finance (Switzerland) AG Marcel Erni Partners Group Hans Hess Geberit, Schaffner, Comet, Burkhardt Compression Alexander Krebs Capvis Equity Partners AG Ueli Roost SF-Chem

Participants 190

Event partner Capvis Equity Partners AG, Sal. Oppenheim jr. & Cie. Corporate Finance

136 Yearbook 2008

7. Schweizer Private Equity and Corporate Finance Kongress Monday, December 10, 2007, Widder Hotel, Zurich

Moderation Massimo S. Lattmann SECA

Speakers 20 Speakers & Panellists

Participants 250

Event Partner SWX Swiss Exchange, Academy for best Execution

Neue Perspektiven dank der Eröffnung des Lötschberg-Basistunnels NEAT Connects European Venture Corridor 24 Friday and Saturday, December 14./15., 2007, Hotel Schweizerhof, Zermatt

Moderation Christian Cappis Netzwerk Espace Mittelland

Speakers Albert Bass Das Finanzkompetenzzentrum CCF AG Christophe Beaud BizAngels Nicolas Berg Xing, Redalpine Venture Jean-Michel Cina Staatsrat Martin Meyer Wirtschaftsförderung Wallis Jochen Mundinger Routerank Maurice Pedergnana SECA

Participants 30

Event partner Netzwerk Espace Mittelland, Wirtschaftsförderung Wallis, Xing, Redalpine Venture

137 S y E y C y A Swiss Private Equity & Corporate Finance Association

Subprime Crisis & Credit Crunch: A vicious circle of credit meltdown Tuesday, March 25, 2008, Widder Hotel, Zurich

Moderation Maurice Pedergnana SECA

Speakers Patrick Brennan NewFinance Capital Can Marfurt Zürcher Kantonalbank Daniel Riediker Alegra Capital AG

Participants 120

Cleantech Opportunities Friday, May 9, 2008, Widder Hotel, Zurich

Moderation Gina Domanig Emerald Technology Ventures

Speakers Sven Hansen Good Energies Fernand Kaufmann High Power Lithium Ralph Kretschmer Credit Suisse Michael Liebreich New Energy Finance Andreas von Richter General Electric

Participants 90

Event partner Emerald Technology Ventures, New Energy Finance

138 Yearbook 2008

Reporting SECA Trend Luncheons

South African Private Equity Opportunities: A Lucrative Target for Global Investors and Private Equity Firms Thursday, January 18, 2007, Swissôtel Métropole, Geneva

Speakers Richard Flett Horizon Equity Partners J-P Fourie SAVCA Adiba Ighodaro Actis Ivan Missankov Momentum Group KLM Sebati South African Ambassador Thomas Seghezzi South African Embassy

Participants 25

Event partner SAVCA, South Africa Embassy Berne

South African Private Equity Opportunities: A Lucrative Target for Global Investors and Private Equity Firms Friday, January 19, 2007, Hotel Park Hyatt, Zurich

Speakers J-P Fourie SAVCA Adiba Ighodaro Actis Zenzo Lusengo AMB Private Equity Partners Ivan Missankov Momentum Group KLM Sebati South African Ambassador Thomas Seghezzi South African Embassy

Participants 35

Event partner SAVCA, South Africa Embassy Berne

139 S y E y C y A Swiss Private Equity & Corporate Finance Association

Dynamics and Trends of the Indian Private Equity Market Thursday, October 11, 2007, Widder Hotel, Zurich

Speakers Martin Haemmig CeTIM – Center for Technology & Innovation Management Hiren Ved Alchemy Capital Management Anand Sunderji Asset Management Luis Miranda IDFC Private Equity

Participants 60

Event partner Thomas Weisel International Private Limited, Swiss-Indian Chamber of Commerce

Die Wiener Börse – Performance und Perspektiven Monday, February 25, 2008, Hotel Hyatt, Zurich

Speakers Barbara Dorfmeister Wiener Börse AG Christian Hogenmüller Zumtobel Group Martin Wenzl Wiener Börse AG

Participants 30

Event partner Wiener Börse AG

Swiss Limited Partnership – Renaissance für Schweizer Risikokapital? Wednesday, May 21, 2008, METROPOL, Zurich

Speakers Hannes Glaus Lustenberger Glaus & Partner Oliver Thalmann Aravis Energy

Event partner Lustenberger Glaus & Partner, Aravis Energy, Europa Institut an der Universität Zürich

140 Yearbook 2008

Reporting SECA Related Events / Sponsored Events

Unternehmensfinanzierung 07 – Aktuelle Entwicklungen und innovative Finanzierungen Wednesday, June 6, 2007, Widder Hotel, Zurich

Speakers Hans Martin Albrecht Raiffeisen Schweiz Urs P. Gauch Credit Suisse Philipp Hofstetter PricewaterhouseCoopers AG Fulvio Micheletti UBS AG Christoph Theler Zürcher Kantonalbank Timo Vätto Citigroup Christian Wenger Wenger & Vieli Rechtsanwälte

Event Partner SECA

Mergers & Acquisitions 07 – M&A als Wachstumsoption Thursday, June 7, 2007, Widder Hotel, Zurich

Speakers Dieter Gericke Homburger Rechtsanwälte Marc Klingelfuss Bank Vontobel Beat Kühni Lenz & Staehelin Jörg Müller-Ganz Helbling Corporate Finance Christoph Neeracher Anwaltskanzlei Bär & Karrer Michael Petersen 3i Schweiz Ronald Sauser Sal. Oppenheim jr. & Cie. Corporate Finance (Switzerland) AG Claudio Steffenoni KPMG Paul-André Wenger BridgeLink AG

Event Partner SECA

141 ! "

- =$ 6 D "!#M"% !& '( ) # *+ ,#-#.!"/!!#"0)1!+!2,! 34*5

3445 344 /) /)

#""!" 8 +;:F2@ +@+?;2 $ E,+?: ++?2 1 # ; 2;;;

0#-#""!" 4*444 4*6

-7#,7-77!"#.1#""07#70.*"!897 $ ,@G++ GF?E $ # +:; 2++:: 1 ++;;; 22G@? #""07#70.R"!897 $ R" +;,;G: +;+FEE 1 +:E ++,2 # R& ' ; < ;' +;,2E; +;,;G:

0#--7#,7-77!"#.1#""07#70.R"!897 4*444 4*6 7.02!"#!2!.5

5 /) /)

7.02! 8 2F,F;2 22?,@; H F:+22 E@@?; 0#-7.02! ,F;;2E 2G,F,;

!= !."!" ,?F?:; 2G2GF?

0)7)0 /!!# 4 4*43

+EE

+E@ Charlotte Pedergnana (April ’08)p rr

Dancing Locust (I): Everybody talks about us. They must love us. S y E y C y A Swiss Private Equity & Corporate Finance Association

Articles of Association

Name, Seat and Duration 1. The „SECA – Swiss Private Equity & Corporate Finance Association“ is an association in accordance with paragraph 60 and following of the Swiss Civil Code.

2. The domicile of the association is in Zug.

3. The duration of the association is not limited.

Purpose 4. The association is a non-profit-organisation with no commercial interests and has the following main purposes:

To promote corporate finance and private equity activities in the public and in the relevant target groups; To promote the exchange of ideas and the cooperation among members; To contribute professional education and development of the members and their clients; To represent the members' views and interests in discussion with government authorities and other bodies; To establish and maintain ethical and professional standards.

Resources 5. The financial resources of the association are based on the following contributions:

Annual membership fees; Entrance fees of new members; Donations and subsidies; Attendance fees for meetings and other performances organised by the association.

Membership 6. Persons or legal entities resident in Switzerland and Liechtenstein and which are engaged or interested in activities within the purposes of the association are eligible as members. 7. There are three categories of members:

Full Members: Companies, professionally involved in one or more activities related the purposes of the association (e.g. banks, private equity or venture capital companies, corporate finance and M&A advisors, consulting and auditing firms with corporate finance activities etc.)

348 Yearbook 2007

Associate Members: Companies, interested in one or more activities related to the purposes of the association, but not having their main business in corporate finance or private equity. Business Angels, Individual Members: Private persons who are active or interested in the field of corporate finance or private equity. Honorary Members: Elected by the General Assembly in recognition of their services rendered to the association.

8. The Executive Committee has the competence of admitting and expelling members. Any expelled member has the right to appeal to the General Assembly within 30 days.

9. The members are not held responsible for any liability incurred by the association.

10. The annual membership fees are set by the General Assembly at the request of the executive Committee. The Executive Committee considers each membership category, the company size and eventually the earning power of the members in doing so.

Organisation 11. The association comprises the following official bodies:

The General Assembly of the members; The Executive Committee (Vorstand) which nominates; General Secretary and; The Advisory Board (Beirat); The Statutory Auditor.

General Assembly 12. The General Assembly is convened at least once a year by the Executive Committee or by request of at least one fifth of all members.

13. The authority and the procedure of decision making are specified by Swiss law.

Executive Committee 14. The Executive Committee is composed of at least five members. It manages the business and represents the interests of the association. The members of the executive committee are elected on an annual basis.

15. The association is legally bound only by the collective signature of two members of the Executive Committee.

349 S y E y C y A Swiss Private Equity & Corporate Finance Association

16. The Executive Committee constitutes itself by electing a Chairman and other designees from amongst its members.

17. The Executive Committee may delineate the operation and representation of the association to selected members of the Executive Committee, to the General Secretary or to third parties. The Executive Committee is legitimized, the operations, the tasks and the authorities of the selected members of the Executive Committee to define in regulations. The Executive Committee is authorized to decide in all issues or eventually to decree regulations which are not reserved for the General Assembly or the Statutory Auditors by the articles of association.

18. The Executive Committee is authorized to nominate an Advisory Board which counsel the Executive Committee regarding factual issues, publications, events, education and relations to other corporate bodies and governmental organizations.

Statutory Auditor 19. The General Assembly will elect one or more auditors who will submit a report to the General Assembly once a year.

Change of Articles, Dissolution of Association 20. Any change of the present articles as well as the decision of dissolving the association must be approved by a majority of two thirds of the members attending a General Assembly.

21. Should the association be dissolved, any capital will be transferred to another association, club or foundation which has the same or similar purpose. The members present at the Final Assembly will determine the exact usage of left over capital.

Additional Legal Regulations 22. In any case where the articles are not applicable, rights and duties of the association and of its bodies are subject to the rules set forth in paragraph 60 and following of the Swiss Civil Code.

SECA, Grafenauweg 10, P.O. Box 4332, CH-6304 Zug

This is a translation of the German original. The German version applies in use of disagreement.

350 S y E y C y A Swiss Private Equity & Corporate Finance Association

Swiss Limited Partnership Model Documentation

VIII. S y E y C y A Swiss Private Equity & Corporate Finance Association

Model Documentation for a Limited Partnership for Collective Investments

unofficial translation of German original by Lustenberger Glaus & Partner, Zürich, March 2008

Please note: The following model prospectus including the company agreement for the limited partnership for collective investments is based on the Swiss Federal Act on Collective Investment Schemes and the related ordinances of the Federal Council (referred to below as the “CISO”) and of the Swiss Federal Banking Commission (referred to below as the “CISO- SFBC”).

The model documentation for Swiss limited partnerships has been developed jointly by the Swiss Funds Association SFA and the Swiss Private Equity and Corporate Finance Association SECA1. The Swiss Federal Banking Commission has acknowledged and accepted the documentation as the basis for applications for authorization. Owing to time constraints, the Federal Commercial Registry Office has not commented on the model documentation.

No single model agreement can cover the wide range of provisions and variations in company agreements in the private equity and hedge fund business. The model agreement serves as a basic framework, which will have to be modified and refined in practice in line with the requirements of the parties involved. Many provisions are “optional” or need to be adapted to the individual objectives of the parties concerned.

In light of the broad scope of application covered by limited partnerships for collective investment, this model agreement has had to be geared to one basic type of structure. The basic structure in this instance is a closed-end (i.e. no termination option) private equity fund for a fairly small number of (qualified) investors, who have joined together for a limited term (of 6 to 12 years).

Under the terms of the CISA and CISO, all types of hedge funds, construction and real estate projects, as well as funds of funds for the aforementioned investments, may be set up in the form of a limited partnership for collective investment. These are as a rule established for longer periods and/or unlike the present model envisage the possibility of terminations and subscriptions (after founding). There are plans to adapt the present model document in line with such purposes.

The associations involved and the Swiss Federal Banking Commission plan to revise the model documentation after approximately one year to take into account the experience gained with this instrument, which is new in a number of respects.

1 This documentation has been drafted primarily by Dr. Hannes Glaus (attorney at law, Lustenberger Glaus & Partner, Zurich) on behalf of the two associations. 352 Yearbook 2008

Model Prospectus2 for a Limited Partnership for Collective Investments

including Model Partnership Agreement

The following information gives a brief partial summary of the following Partnership Agreement. If the data in this Prospectus and the Partnership Agreement overlap, the Partnership Agreement will take precedence.3

Limited Partnership y Name, object and registered office y Capital y Legal structure y Authorization from and supervision by the Swiss Federal Banking Commission

General Partner AG y Object, name and registered office y Capital and shareholders y Board of Directors y Auditors

Executive officers, [Names and background, specifically regarding key persons qualifications and track record]

[Investment manager, advisor, administrator, [only in the case of delegation:] insofar as the said are envisaged] y Information on the companies and persons to whom management and/or representation or parts thereof have been delegated. y Reference to significant agreements.

[Advisory Board, insofar as envisaged] [Function] [Names and background, specifically with regard to qualifications and track record]

Object, investments, investment policy y Object y Investment policy: - stage of the investments (e.g. venture/early stage, buyout, etc.) - geographical focus - sector focus (e.g. biotech, etc.) y Investment restrictions: exclusion of … y Risk diversification: no more than [x] % per investment, diversification in terms of geographical mix, stages, etc. y Investment techniques

2 Pursuant to Art. 102. 3 CISA, the above Prospectus sets out the investment policy. All other aspects listed in this model documentation are optional. However, in the case of larger limited partnerships in particular, more detailed information is both advisable and customary. It should be noted that, from the legal perspective, changes to the Partnership Agreement are subject to the approval of the SFBC, but changes to the Prospectus are not. 3 In principle, information that is also contained in the Partnership Agreement must be provided only in summary form, with a reference to the corresponding sections of the Agreement. 353 S y E y C y A Swiss Private Equity & Corporate Finance Association

y Details on the selection and monitoring processes

Paying Agent and Custodian4 [Name, etc.]

Auditors [Name, etc.]

Risks y Illiquidity, total loss of an investment, etc.

Term […]

Limited Partners; subscription Qualified investors, restrictions (US investors, etc.) Key subscription information: y Subscription period: [initial and second] closing y Minimum subscription: institutional / private investors

Reporting y Valuation, reporting, company meetings y Corporate governance: SECA Code of Conduct

Further information y Overview of costs y Tax aspects y Co-investments

[Glossary] [Typical private equity terms]

4 A custodian is not mandatory, and makes sense above all for listed securities pursuant to Art. 54 CISA. 354 Yearbook 2008

[…] to be filled out

Model Agreement for a Limited Partnership for Collective Investments

between [name of General Partner-AG], [street], [town/city], as general partner (referred to below as “General Partner-AG”) and the Limited Partners pursuant to the register in the appendix (referred to below as the “Limited Partners”)

TABLE OF CONTENTS

Preliminary Remarks ...... 356 I. The Limited Partnership ...... 356 A Name, Object, and Governing and Executive Bodies ...... 356 B Term...... 356 II. Capital ...... 357 A Limited Partners’ Capital ...... 357 B Additional Capital ...... 357 C Subscription ...... 358 III. Investments ...... 359 IV. Limited Partners ...... 359 A Powers ...... 359 B Right to Receive Information; Confidentiality ...... 360 C Liability ...... 360 D Transfer of Participations ...... 360 E Death, Insolvency, Incapacity and Expulsion of a Limited Partner ...... 361 V. Company Meeting ...... 361 A Powers ...... 361 B Calling of the Company Meeting ...... 362 VI. General Partner-AG ...... 363 A Management and Representation ...... 363 B Responsibility and Delegation ...... 365 VII. Accounting, Distribution of Income and Auditors ...... 365 A Accounting, Valuation and Reporting ...... 365 B Repayment of Capital and Appropriation of Income ...... 366 C Auditors ...... 366 VIII. Miscellaneous Provisions ...... 367 A Dissolution ...... 367 B Notices ...... 367 C Arbitration...... 367 D Entry into Force ...... 367 Appendices ...... 368 Subscription Form ...... 368 [Definitions] ...... 368

355 S y E y C y A Swiss Private Equity & Corporate Finance Association

Preliminary Remarks The Limited Partners and General Partner-AG as general partner intend to establish a closed-end limited partnership for collective investments in [investment area]. The Limited Partnership is based on the provisions of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (referred to below as the “CISA”), the Collective Investment Schemes Ordinance (referred to below as the “CISO”) as well as the provisions of the Swiss Code of Obligations (referred to below as the “CO”). It is subject to the supervision of the Swiss Federal Banking Commission.

I. The Limited Partnership

A Name, Object, and Governing and Executive Bodies

1. Under the name [name of limited partnership] Limited Partnership for Collective Investment (referred to below as the “Company”), a company has been established as a limited partnership for collective investment pursuant to Art. 98 et seq. CISA. The Company has its registered office in [town/city].

2. The sole objective of the Company is a collective investment in [investment area]5 pursuant to Section 21 et seq. below. The Company is entitled to undertake any actions and legal transactions to directly or indirectly achieve its objective.

3. The governing and executive bodies of the Company are (a) the Company Meeting, comprising the Limited Partners and the General Partner-AG, (b) the General Partner- AG and (c) the Auditors6.

4. In addition, the Company will appoint a Paying Agent [and a Custodian]7.

B Term

5. The term of the Company is [number of years (e.g. eight)]8 subject to any extensions as determined by the Company Meeting (cf. Section 39b below).

6. Following the conclusion of the subscription period, the Company will invest the capital in portfolio companies pursuant to Section 21 during the investment phase of up to [number of years (e.g. 3-5)] (referred to below as the “Investment Phase”). In the years thereafter, the activities of the Company will concentrate on the management and gradual liquidation of the portfolio companies.

5 Example in the case of a venture capital fund: “… in risk capital, specifically participations in young companies in growth sectors with high value creation …”. 6 The Auditors are subject to the requirements of Art. 134 et seq. CISA; they are a key element in the supervisory efforts of the SFBC. Given that the supervision is primarily linked to the General Partner-AG, the same Auditors should be appointed for both companies. 7 The appointment and use of a custodian is only required if the Company holds listed securities pursuant to Art. 54 CISA. In the private equity business, but also in the case of construction and real estate projects, the investments are generally not made in the form of listed securities. 8 In the venture capital sector, a term of eight years with two extension options of two years each is a common scenario. 356 Yearbook 2008

7. New investments are only permitted in the exceptional cases set out in this Agreement. Furthermore, subject to these exceptions (cf. Section 39a), any profit from the sale of individual investments will not be reinvested, but distributed to the partners in accordance with this Agreement.

II. Capital

A Limited Partners’ Capital

8. The limited partners’ contribution is CHF [amount in numbers] ([amount in words]), divided into [number of limited partnership shares] shares of CHF [amount in Swiss Francs] (referred to below as “Limited Partnership Shares”). The Limited Partners pay in their proportion of the limited partners’ contribution when the Company is founded. This contribution is entered in the Commercial Register as a basis for liability and is repaid only upon the liquidation of the Company9.

9. The General Partner-AG, its executive officers pursuant to Art. 119(3) CISO and any other founders (provided they meet the requirements for qualified investors) are entitled to subscribe directly or indirectly up to [percentage rate]% of the limited partners’ contribution (they are referred to below as “Founding Limited Partners” and “Founding Limited Partnership Shares”). The following provisions relating to additional capital and minimum subscriptions do not apply to the Founding Limited Partners.

B Additional Capital

10. With the exception of the Founding Limited Partners10, the Limited Partners undertake when subscribing Limited Partnership Shares to provide an additional financial contribution equal to [number] times the subscribed Limited Partnership Shares (referred to below as “Additional Capital”). Internally, the Additional Capital represents equity but is not entered in the Commercial Register and does not form a basis for liability of the Company; it may be repaid at any time subject to a corresponding resolution by General Partner-AG in accordance with the present Agreement.

11. Notwithstanding the rules on the distribution of income (Section 73 et seq. below), interest will not be paid on the Limited Partnership Shares and the respective proportion of the Additional Capital (referred to jointly below as the “Participation”).

12. The Limited Partners must pay in the Additional Capital in one or more installments within [number of days, (e.g. ten)] business days upon receipt of a respective request from the General Partner-AG. Once the Investment Phase has expired pursuant to Section 6, the General Partner-AG may only demand payment of the uncalled Additional Capital on the basis of a resolution passed by the Company Meeting [or by the Advisory Board if applicable] (cf. Section 39a). An exception applies only to the calling of Additional Capital to cover any costs (including the remuneration of the General Partner-

9 It is also conceivable to have different categories of Limited Partnership Shares to reflect different interests. 10 Founding Limited Partnership Shares confer the same profit distribution rights as the other Limited Partnership Shares, but without the obligation to provide Additional Capital. In the present model, therefore, distribution rights (the so-called "carried interest") can be vested as Founding Limited Partnership Shares. Such vesting is not mandatory, in particular not if the General Partner-AG holds the Founding Limited Partnership Shares. 357 S y E y C y A Swiss Private Equity & Corporate Finance Association

AG) [and for investments permitted to be made after the Investment Phase pursuant to this Agreement or by resolution of the Company Meeting (Section 39a].

13. If a Limited Partner, despite receiving a reminder, fails to remit the demanded payment of Additional Capital within thirty calendar days of receipt of the reminder, its Participation may be sold to the highest bidding Limited Partner in accordance with the rules on the transfer of Participations (Section 33 et seq.). The General Partner-AG is responsible for the respective transaction. If no Limited Partner is willing to take over the Participation (together with the respective obligations as to Additional Capital), the General Partner-AG may, at its own discretion, offer the said Participation to external third parties.

14. The sale of Participations is only permitted if the acquiring party also assumes the obligation to pay in the Additional Capital. Interest will be charged by the Company on any outstanding installments for Additional Capital at [percentage rate, (e.g. 1)]% per month. Any further damage claims are reserved.

C Subscription

15. The subscription period will run until [date]11. During this period, the General Partner-AG may found the Company and conduct one or more capital increases.12

16. By signing the subscription form as per the appendix (referred to below as the “Subscription Form”), subscribers irrevocably undertake to forthwith pay in the corresponding limited partner's contribution and, when called upon to do so by the General Partner-AG, to pay a respective proportion of Additional Capital. All payments shall be made within the period set down in Section 15.

17. The minimum subscription amount per subscriber or Limited Partner is CHF [amount in CHF] (limited partner’s capital and Additional Capital).

18. At the time of the subscription, subscribers must be qualified investors pursuant to Art. 10.3 CISA and Art. 6 CISO or Founding Limited Partners. Furthermore, subscribers must meet the further requirements and conditions set down in the Subscription Form. They must provide the information and documents required to carry out the General Partner-AG's tasks. The Company may insist on a repurchase of Participations provided it has sufficient financial resources and it is established that certain investors do not meet the relevant requirements.

19. If a stipulation given in a Subscription Form proves to be incorrect and the aforementioned requirements are therefore not met, the corresponding Participation shall be sold pursuant to Section 13. Moreover, the subscriber shall be liable for any damage incurred.

20. The General Partner-AG is free to decide at its own discretion whether to accept subscriptions or not; it may reject subscriptions without giving any reasons.

11 The subscription period should, in principle, only run up to the commencement of the investment activity. Within this period, all subscriptions should be made under the same conditions, possibly modified by an interest premium for later subscriptions. 12 A common provision is that the General Partner-AG may extend the subscription period or may order a further subscription (a “second closing”). 358 Yearbook 2008

III. Investments

21. The Company will invest in [specific investment purpose, e.g. investments in venture- stage high-tech firms in Europe].13

22. [Details on: investment policy, investment restrictions, risk diversification, risks and investment techniques:14 y stage of the investments (venture/early stage, buyout, etc.) y geographical focus y sector focus (biotech, etc.) y investment restrictions: exclusion of … y risk diversification: no more than [percentage rate]% per investment, diversification in terms of geographical mix, stages, etc. y investment techniques pursuant to Art. 102(1)(h) CISA15 y possibly information on - due diligence process - milestones, monitoring]

23. [Provisions regarding investments made by way of exception after the Investment Phase has expired].

IV. Limited Partners

A Powers

24. Each Limited Partnership Share confers the right to a proportionate share in the assets and profit of the Company (pursuant to Section 73 et seq.) and to one vote at the Company Meeting; the Founding Limited Partners do not participate in the Additional Capital. The Limited Partners exercise their voting rights at the Company Meeting.

25. The Limited Partners have no management powers. If the General Partner-AG has a conflict of interests or is unable to make a decision for other reasons, the Company Meeting [or the Advisory Board in its place] may take the corresponding basic decision. The General Partner-AG is responsible for the implementation of such decisions and the related work (preliminary checks, etc.).

26. The Limited Partners may conduct other business activities and participate in other companies for their own account and for the account of third parties.

27. [The Limited Partners (including the Founding Limited Partners) are entitled to invest directly in portfolio companies of the Company (referred to below as “Co-Investments”), provided the other Limited Partners are not disadvantaged as a result and the equal treatment of the Limited Partners is ensured. The General Partner-AG [and the Advisory

13 In the private equity sector, for example, it is customary to provide information on the industry, geographical location, and stage of investment (early and late stage, buyout). In the case of funds of funds, and particularly for hedge funds and real estate projects, the description of the investments may be different. 14 Details might also be given on minimum and maximum investments, borrowing, granting loans, thresholds, lending limitations in respect of any investments, thereby specifying the respective thresholds. 15 Achieving a leverage effect is rather unusual in the private equity sector, an exception being so-called over-commitments, especially in the fund of funds segment. 359 S y E y C y A Swiss Private Equity & Corporate Finance Association

Board] shall decide on the permissibility and the respective conditions of Co- Investments.]16

B Right to Receive Information; Confidentiality

28. Subject to the trade secrets of the companies in which the Company invests, the Limited Partners have the right to inspect the books of the Company, provided that the Company interests are not jeopardized. In addition, the Limited Partners are entitled to receive reports pursuant to Section 66.

29. Upon written request, the General Partner-AG shall grant the Limited Partners access to the books within two calendar weeks. If the General Partner-AG refuses to grant any inspection it must, upon application by a Limited Partner, instruct the Auditors to carry out the necessary investigations and to provide information.

30. [The Limited Partners must adhere to a duty of confidentiality.]17

C Liability

31. Limited Partners are liable both personally and jointly and severally in respect of the Company’s debt, albeit only up to the amount of the respective contribution subscribed to by any individual Limited Partner.

32. The Limited Partners are not liable to the Company’s creditors during the term of the Company. The commencement of insolvency proceedings against a Limited Partner does not per se result in liability for debts of the Company.

D Transfer of Participations

33. The Limited Partners cannot terminate their Participations or return them to the Company in any other manner. They may sell their Participation (together with the obligation regarding Additional Capital) to other Limited Partners or third parties provided and insofar as the other parties are willing to accept a transfer of the Participation pursuant to Section 13 and the number of Limited Partners does not fall below the minimum of five. Furthermore, the acquiring party must be a qualified investor. Transfers to external third parties must be approved in advance by the General Partner- AG.

34. Participations must first be offered to the other Limited Partners and will be attributed to the highest bidder. Partial offers are permitted and will be taken into account in descending order of the bids. In the event of equal offers, Participations will be allocated in proportion to the holdings of Limited Partnership Shares of the respective parties.

35. A Limited Partner willing to sell must notify the General Partner-AG, which shall forward the offer to the other Limited Partners. The latter must provide a response within [period, e.g. one calendar month]. If no response is received within this period, the party concerned will be deemed to have forfeited its respective right. Any other responses relating to the transfer must also be given within one month to the General Partner-AG.

16 It is advisable to issue separate regulations for the respective conditions, e.g. precedence of the Company with regard to the investments and liquidation. 17 A duty of confidentiality is customary, but not required by law. 360 Yearbook 2008

E Death, Insolvency, Incapacity and Expulsion of a Limited Partner

36. The death, insolvency, incapacity, etc. of a Limited Partner will not result in the dissolution of the Company. The Company authorizes the General Partner-AG to expel any insolvent Limited Partners and to take over their Participation in accordance with Art. 615 (in conjunction with Art. 578) CO for the Company’s account, provided no Limited Partner or external third party is willing to do so.

37. The General Partner-AG may expel from the Company a Limited Partner which no longer meets the subscription requirements (cf. Section 18); the same applies for other cases pursuant to Art. 105(1) in conjunction with Art. 82 CISA.

V. Company Meeting

A Powers

38. The Company Meeting may take decisions if more than half of all Limited Partnership Shares are represented. If this quorum is not reached, the General Partner-AG shall call a second meeting, which may take decisions without fulfilling the necessary quorum.

39. The Company Meeting decides by absolute majority of all votes represented on all matters that have not been delegated to the General Partner-AG under this Agreement, including in particular the matters listed below.18 If an absolute majority cannot be achieved, the General Partner-AG may submit the matter to a newly convened second meeting, which will take decisions by simple majority.

a) calling of Additional Capital upon expiration of the Investment Phase, and the reinvestment of assets from the proceeds of investments;

b) extending the term of the Company on a maximum of [number of extensions (e.g. two)] occasions by [number of years (e.g. two)] years each;

c) management decisions the General Partner-AG has submitted to the Company Meeting because of a conflict of interests or for other reasons;

d) approving annual financial statements;

e) electing the Auditors;

f) electing or dismissing members of the Advisory Board;

g) discharging the General Partner-AG from liability;

h) amending the Company Agreement, provided such amendments are not governed by the provision below or concern inalienable rights of any Limited Partners.

18 The listed items serve purely as examples and may be freely varied. 361 S y E y C y A Swiss Private Equity & Corporate Finance Association

40. The following matters require a qualified majority of [e.g. two thirds] of the votes represented:

a) dismissal and/or appointment of the General Partner-AG;

b) approval of a restructuring or replacement of the General Partner-AG in the event of the departure of key persons as designated in the prospectus;

c) delegation of management powers by the General Partner-AG to third parties and significant changes to the respective conditions;

d) changes to the investment policy and guidelines pursuant to Section 21 et seq.;

e) prior dissolution and liquidation of the Company;

f) appropriation of liquidity surpluses exceeding the planned repayments;

g) extending the term of the Company beyond the extension as per Section 39b above;

h) appointing an Advisory Board and determining its powers.

41. The General Partner-AG must inform the supervisory authority in advance of resolutions by the Company Meeting concerning amendments to the present Agreement or to the General Partner-AG.19

B Calling of the Company Meeting

42. The General Partner-AG is responsible for the proper convocation of the Company Meeting. The Meeting must be called at least one calendar month in advance. Such call notice must include information on the agenda items, enclosing the necessary documents.

43. Upon application of the General Partner-AG, the Company Meeting may be held without physical attendance by written approval of the motions submitted by the General Partner-AG, unless the holders of more than 10% of all Limited Partnership Shares object. The aforementioned majority requirements will also apply to the passing of such resolutions (cf. Section 38 et seq.).

C [Advisory Board]20

44. An Advisory Board may be set up by the Founding Limited Partners, or at a later stage by the Company Meeting. The Advisory Board represents the interests of the Limited Partners and advises and supervises the management. It is entitled to obtain information from the General Partner-AG on the management of the Company and to inspect the Company’s books. The Advisory Board may exercise certain of the powers granted to the Company Meeting; this applies in particular to the resolutions pursuant to Sections 39a to 39c.

19 Cf. Art. 16 CISA. 20 The appointment of an Advisory Board is optional and the structure lies to a large extent within the discretion of the Limited Partners or Founders; an Advisory Board is typically set up upon establishment of a company. 362 Yearbook 2008

45. The Advisory Board has the following specific powers: y [exercising all powers delegated to it by the Company Meeting;] y [decisions on conflicts of interest between the General Partner-AG and the Company and/or the Limited Partners;] y […]

46. The Advisory Board has [at least three] members. It is elected upon the establishment of the Company or thereafter by the Company Meeting. The members of the Advisory Board may be dismissed at any time by the Company Meeting.

47. The General Partner-AG shall send a representative to the meetings of the Advisory Board. This representative shall however only have the right to participate in the meetings, but no voting rights. The members of the Advisory Board need not be Limited Partners.

48. The Advisory Board may take decisions if more than half of its members are present. Resolutions by the Advisory Board must be taken by the majority of the members present. [In the event of an equal vote, the Chairman will have the casting vote/a new meeting will be convened/the matter will be referred back to the Company Meeting.]

49. The members of the Advisory Board are subject to a duty of confidentiality, also after expiration of their term. They must disclose all current and potential conflicts of interest; where appropriate they must abstain to vote and may not participate in consultations.

50. The Company will appropriately remunerate the members of the Advisory Board for the expenses related to their mandate; [there will be no other remuneration for their activities].

VI. General Partner-AG

A Management and Representation

51. The General Partner-AG is solely responsible for the management of the Company in accordance with the CISA and CO. General Partner-AG signs on behalf of the Company in accordance with its regulations on authorized signatories.21

52. General Partner-AG is responsible for the operational business of the Company within the framework of this Agreement. General Partner-AG shall evaluate potential portfolio companies, structures and decide on any investments of the Company in such portfolio companies. General Partner-AG shall continuously monitor the portfolio companies, specifically with regard to their achievement of set parameters (milestones). It is entitled to intervene in the management of the portfolio companies at its own discretion and, among other things, to take up a position on the board of directors of the companies in question.

53. General Partner-AG shall decide on the calling of Additional Capital and its repayment. Subject to the exceptions set down in this Agreement, the calling of Additional Capital is permitted only during the Investment Phase.

21 As a rule, joint signature by two authorized signatories of General Partner-AG. 363 S y E y C y A Swiss Private Equity & Corporate Finance Association

54. General Partner-AG may, in principle, invest the capital of the Company only once. Liquidity that is not required and the proceeds from the sale of portfolio companies are repaid to the Limited Partners on an ongoing basis, subject to the provision of an appropriate level of liquidity for the Company and the exceptions set down in this Agreement.

55. General Partner-AG must observe strict confidentiality, and must also impose this obligation on its executive and governing bodies, employees and advisors.

56. General Partner-AG is responsible for keeping the Company’s books of account and providing regular reports to the Limited Partners. It must keep and update the register of Limited Partners and the capital accounts of the Limited Partners. It appoints the Custodian and the Paying Agent. In accordance with Section 33 et seq., it decides at its own discretion on any transfer of Participations (including commitments for Additional Capital) to third parties.

57. General Partner-AG may only be the general partner in this Company. It may conduct other business transactions for its own account and for the account of third parties or participate in other companies if such actions are disclosed and the interests of the Company are not impaired, or if the Company Meeting [or Advisory Board] has explicitly approved the business transaction in question (Section 39c).

58. General Partner-AG [and persons associated with it] may not conduct any business transactions or pursue any other interests that conflict with the interests of the Company or that might lead to such a conflict of interests, except in cases where such transactions are approved by the Company Meeting [the Advisory Board if applicable]. Any remuneration and benefits (management fees, trailer fees, etc.) it receives in connection with its function for the Company must be passed on to the Company.

59. General Partner-AG must inform the Company Meeting [the Advisory Board if applicable] about all business transactions in which it, its executive officers, or persons associated with General Partner-AG or its executive officers have a direct or indirect interest that might conflict with the interests of the Company.22 The Company Meeting [the Advisory Board if applicable] will then decide on the further action to be taken. The executive officers must be listed in the prospectus.

60. For its activities, General Partner-AG will receive a fixed remuneration of [percentage rate]% p.a. of the amount of the total capital (Limited Partnership Shares and Additional Capital).23

61. [Share of profits]24

22 Including preceding and successor funds that invest in the same portfolio companies, etc. 23 There are any number of variations in practice; many companies envisage a reduction in the percentage rate and the basis (e.g. on the value of the remaining investments) after the Investment Phase has expired. 24 The share of the profits of the General Partner of General Partner-AG is equally important. The share of profits – referred to in the private equity business as ‘carried interest’ – is generally 20% of the profits. This is mostly carried out by a direct allocation of this share to the General Partner as part of the distribution of profits to the Limited Partners. This method is commonly used worldwide, and is also entirely conceivable under the CISA. In the present model documents, the share of profits is distributed via the Founding Limited Partnership Shares pursuant to Sections 9 and 10. 364 Yearbook 2008

B Responsibility and Delegation

62. General Partner-AG is liable to third parties for the Company’s debts. The liability is unlimited and secondary. General Partner-AG may be sued by the Company’s creditors only if the Company has been dissolved or unsuccessfully sued for collection by other parties, or if the Company itself has become insolvent.

63. General Partner-AG must ensure compliance with this Agreement and any Appendices as well as with the pertinent legislation, specifically the CISA. It must make the required reports to the supervisory authority and provide information requested by the latter.

64. General Partner-AG may appoint an expert advisory body, the remuneration of which must be paid out of the fee of General Partner-AG. The said body has a purely advisory function; it has no management or representation powers.

65. General Partner-AG may delegate the following powers to qualified external third parties:25 y […] y […]26

66. Management powers may be delegated only to appropriately qualified persons or companies; General Partner-AG must ensure the diligent instruction, monitoring and controlling of such delegated parties.

VII. Accounting, Distribution of Income and Auditors

A Accounting, Valuation and Reporting

67. General Partner-AG must issue a quarterly report on business performance. The Annual Report must contain the information specified under Art. 89 CISA.27

68. The financial year of the Company is the [calendar year]. The reference currency is […].

69. General Partner-AG must keep a capital account for each Limited Partner. This account is used to hold the Limited Partnership Shares subscribed by the Limited Partner and the Additional Capital, the deposits paid in respect of the latter and the amounts reimbursed to the Limited Partner in respect of the Additional Capital and the limited partners’ contribution, as well as the proportion of income paid out to them. [Additional current account, possibly a loss carry-forward account].

70. The Company must keep separate accounts for capital gains on the one hand and interest and dividends on the other.

25 Delegation is permitted provided it is in the interests of efficient management (Art. 119 CISO). In addition, the Company Agreement must contain provisions on the delegation of management or representation (Art. 102 CISA). The content and scope of the delegation together with the names and addresses of the delegated parties are to be listed in the prospectus where applicable, with reference to the corresponding agreements where applicable. 26 Art. 119 CISO refers to the delegation of investment decisions. Delegation will often also affect administrative functions such as accounting and reporting, or support functions such as due diligence, monitoring, etc. 27 A semi-annual report with a balance sheet and income statement is not required. 365 S y E y C y A Swiss Private Equity & Corporate Finance Association

71. The valuation of the assets and liabilities, specifically the portfolio companies, will be based on the following principles.28 y […] y […]

72. [Other accounting principles].

B Repayment of Capital and Appropriation of Income

73. General Partner-AG will decide at its own discretion on the amount and timing of distributions of earnings and capital gains realized during the financial year, provided sufficient liquidity is available and appropriate reserves have been created for the current and foreseeable obligations of the Limited Partnership (including management costs and any financing commitments). Provided the provisions of this Agreement are met, the Company may distribute realized earnings and capital gains at any time.

74. Subject to any taxes or other sovereign duties (including any withholding tax), all distributions of disposable earnings and capital gains accounted for as described in Section 73 will be made in accordance with the following principles (after the liabilities and any debts of the Limited Partnership have been covered):29

a) firstly, to the Limited Partners in relation to the called Additional Capital, until the latter has been repaid in full;

b) [secondly, to the Limited Partners in relation to the called Additional Capital, until the distribution of an amount corresponding to [percentage rate]% p.a. of the called Additional Capital;]

c) thereafter, to the Limited Partners in relation to their Limited Partnership Shares.

75. After the liquidation of the Limited Partnership, the Limited Partners will receive repayment in respect of their Limited Partnership Shares provided these are not used to cover liabilities or the liquidation costs of the Limited Partnership.

C Auditors

76. The Auditors30 are appointed for the first time when the Company is founded. Any dismissal or new appointment will be made by the Company Meeting from the group of auditing firms recognized by the Swiss Federal Banking Commission. The tasks of the Auditors are determined by the CISA and the present Agreement.

28 The agreement should list the most important valuation principles. In most cases, it also makes reference to the rules of the corresponding associations. SECA (Swiss Private Equity and Corporate Finance Association) is to be mentioned. Its guidelines correspond largely to those of the EVCA (European Venture Capital Association) and the International Private Equity and Venture Capital Valuation Guidelines. The US private equity guidelines (issued by “PEIGG”) are also very significant. 29 Almost every option is used in practice; the order of appropriation of income described in this case has been kept deliberately simple and serves only as an example. 30 The same auditors as for General Partner-AG; cf. footnote to Section 3. 366 Yearbook 2008

VIII. Miscellaneous Provisions

A Dissolution

77. The Company will be dissolved if one of the following events occurs:

a) if the minimum number of Limited Partners required under the CISA is not reached within the subscription period;

b) upon expiry of the term, including any extensions, pursuant to the present Agreement;

c) by resolution passed by the Limited Partners (Section 40e);

d) by decision of the competent authorities.

B Notices

78. Notices to the Limited Partners and General Partner-AG must be made in writing, by fax or email. The onus of proof of dispatch and receipt lies with the sender.

C Arbitration

79. Any dispute, controversy or claim arising out of or in relation to this Agreement including the validity, invalidity, breach or termination thereof, will be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force on the date when the Notice of Arbitration is submitted.

80. The number of arbitrators will be three. The seat of arbitration will be [place]. The arbitral proceedings will be conducted in English.

81. The rights of the investor and powers of the supervisory authority pursuant to the CISA are reserved.

D Entry into Force

82. The Agreement will become legally effective upon its approval by the Swiss Federal Banking Commission and with the subsequent entry of the Company in the Swiss Commercial Register.

[Place, date: signatures]

367 S y E y C y A Swiss Private Equity & Corporate Finance Association

Appendices

Subscription Form

[… contains provisions relating to the identification for KYC purposes, nationality requirements (US residents) and qualification pursuant to Art. 10 CISA and Art. 6 CISO, etc.]

[Definitions]

………

368 S y E y C y A Swiss Private Equity & Corporate Finance Association

Code of Conduct for Private Equity Investments

IX. S y E y C y A Swiss Private Equity & Corporate Finance Association

SECA Code of Conduct for Private Equity Investments

Trägerschaft und Inkraftsetzung

SECA Fachgruppe “Ethik & Corporate Governance”:

Beat Unternährer Dipl. Ing. ETH, MBA Berkeley Vorstandsmitglied SECA, Leiter Fachgruppe Ethik & Corporate Governance

Beat M. Barthold Dr. iur., Rechtsanwalt, Partner Froriep Renggli, Zürich

Christian Böhler Dr. oec. HSG, dipl. Finanzanalytiker/CIIA Lombard Odier Darier Hentsch

Marco Martelli Dipl. Wirtschaftsprüfer; Direktor Invision Private Equity AG, Zug

Maurice Pedergnana Prof. Dr. oec., Fachhochschule Zentralschweiz; Ge- schäftsführer der SECA

Felix Rohner Partner Capvis Equity Partners AG, Zürich

Christoph Weber-Berg Dr. theol. et lic. oec., Leiter Fachstelle Kirche und Wirt- schaft der Evangelisch-reformierten Landeskirche des Kantons Zürich

Inkraftsetzung: Der SECA Vorstandsausschuss verabschiedete die vorliegende Version am 14. März 2006 zuhanden des SECA Gesamtvorstands. Die SECA Generalversammlung verabschiedete den vorliegenden Code of Con- duct für Private Equity Investments am 20. Juni 2006.

370 Yearbook 2008

Einleitung Private Equity hat heute aus verschiedenen Blickwinkeln eine erhebliche Bedeu- tung. Es ist einerseits eine wichtige Anlageklasse und andererseits kann Private Equity als Instrument zur Unterstützung von zukunftsträchtigen Unternehmungen gesehen werden, womit auch – insbesondere mangels alternativer Finanzformen - ein erheblicher volkswirtschaftlicher Nutzen besteht.

Das Private Equity Geschäft ist eine anspruchsvolle Tätigkeit, die von allen Invol- vierten viel Know-how, Sachverstand, Urteilsvermögen sowie verantwortungsvolles Handeln verlangt.

Eine vom Vorstand eingesetzte Fachgruppe der SECA hat sich darüber Gedan- ken gemacht, welches Erfolgsfaktoren für eine nachhaltig erfolgreiche Tätigkeit im Private Equity Umfeld sind. Diese Überlegungen sollen einerseits einen Beitrag zu eigenverantwortlichem Handeln der Akteure im Private Equity Geschäft leisten und andererseits externen Interessierten einen Einblick in die Herausforderungen dieser anspruchsvollen Investitionstätigkeit gewähren.

Basis für die vorliegenden Überlegungen waren in erster Linie Inputs von führen- den Branchenvertretern sowie Empfehlungen ausländischer Organisationen, wie beispielsweise der EVCA. Die Überlegungen stellen eine Momentaufnahme dar und sind im Zuge der Entwicklungen des Private Equity Geschäfts periodisch zu überprüfen resp. zu aktualisieren. Die einzelnen Kapitel sind im Rahmen der Übersichtlichkeit fast ausnahmslos gegliedert in Fazit, Ausgangslage und Votum.

Die SECA ist überzeugt, dass die Bedeutung von Private Equity als Anlageklasse und volkswirtschaftliches Element weiterhin zunehmen wird und dass professionelles, verantwortungsvolles Handeln der Akteure in diesem Markt die Entwick- lung noch beschleunigen wird.

371 S y E y C y A Swiss Private Equity & Corporate Finance Association

1. Private Equity: Erfolg durch verantwortungsvolles, professionelles Handeln

Private Equity übernimmt eine wichtige Funktion in der Volkswirtschaft, in- dem es Firmen in Phasen dynamischer Entwicklung mit risikofähigem und risikobehaftetem Kapital versorgt. Unternehmen verfügen oft nicht über das für diese Phasen notwendige Eigenkapital. Banken können und wollen diese finanziellen Risiken nicht in ihr Kreditportfolio aufnehmen. Die Übernah- me dieser Risiken und damit die Ermöglichung der entsprechenden Ent- wicklungsoptionen sind zentrale Elemente der volkswirtschaftlichen Funkti- on von Private Equity, das damit die Chancen und Risiken übernimmt, die mit unternehmerischen Umbruchphasen verbunden sind. Kennzeichnend für diese Phasen ist nebst raschen Veränderungen ein hohes Mass an Un- sicherheit. Informationsvorsprünge und -asymmetrien könnten unter Um- ständen einzelne Akteure dazu verleiten, kurzfristige Vorteile zulasten schlechter informierter Risikoträger zu erzielen. Damit erhöhen sie nicht nur die Risiken für die anderen Partner, sondern sie schaden langfristig der Re- putation von Private Equity. Integrität, Ethik, Corporate Governance und transparente Kommunikation sind deshalb nicht nur für den einzelnen Ak- teur am Markt, sondern für die optimale Rolle und Entwicklung von Private Equity in der Volkswirtschaft unabdingbar. Die vorliegende Broschüre soll diese Entwicklung massgeblich leiten und unterstützen.

Im beschriebenen Umfeld von Private Equity mit teilweise in Konflikt stehenden Interessen, sind folgende ethische Werte von zentraler Bedeutung:

Respekt als Grundhaltung des Einzelnen ist die Voraussetzung dafür, dass Fairness und Verantwortung sich entfalten können. Respekt stellt sicher, dass die eigenen Interessen sich dem fairen Ausgleich mit den legitimen In- teressen der Mitbeteiligten auch im Konfliktfall stellen. Respekt ist ausser- dem die Grundlage der Bereitschaft zur Übernahme von Verantwortung, welche über die unmittelbaren Eigeninteressen hinausgeht.

Fairness ist durch das gegenseitige Bestreben gekennzeichnet, Situatio- nen zu schaffen, in denen Chancen und Risiken gleichermassen (bzw. nach Massgabe ihres finanziellen Engagements) auf alle Beteiligten verteilt werden. Interessen sollen offen gelegt und Informationen allen in gleicher Wei- se zugänglich gemacht werden. Das Ideal ist eine Win-Win-Situation, in der keiner der am Geschäft Beteiligten seinen Gewinn auf Kosten des Anderen gemacht hat.

Verantwortung weist über die unmittelbar Beteiligten hinaus auf das Funk- tionieren des Gesamtmarkts sowie auf diejenigen Stakeholder, welche ihre Interessen nicht selber in die Entscheidungen und Transaktionen einbrin-

372 Yearbook 2008

gen können (Kunden, Mitarbeitende und Lieferanten der Zielgesellschaften, Öffentlichkeit und Umwelt1).

Gerade im Spannungsfeld von „Legalität – Legitimität“ werden diese zentra- len Werte die Akteure zu ethisch korrektem Handeln anleiten.

Die Ausführungen im Rahmen des Code of Conduct beruhen auf folgenden Annahmen: Private Equity Finanzierungen erfolgen als indirekte Finanzie- rungen. Bei einer indirekten Finanzierung werden die Mittel der Kapitalge- ber in einem Private Equity Fund gebündelt, der durch einen Fund Manager (Managementgesellschaft) geführt wird. Der Fund Manager befindet sich in einer Doppelrolle. Zum Einen ist er Agent der Fund Investoren und zum Anderen ist er Principal des Portfoliounternehmens. Die Beteiligungsnahme der Private Equity Investoren erfolgt über Private Equity Funds. Die Ausfüh- rungen sind grösstenteils rechtsformunabhängig ausgestaltet. Falls nötig wird zwischen der Limited Partnership (LP) als international üblicher Rechtsform und der schweizerischen Aktiengesellschaft (AG) als derzeit einzig verfügbaren schweizerischen Form der kollektiven Kapitalanlage für Private Equity Funds unterschieden.

Die folgenden Ausführungen beleuchten die Rechte und Pflichten der einzelnen Akteure im Private Equity Bereich unter Berücksichtigung ihrer un- terschiedlichen Interessenlagen. Im Rahmen einer umfassenden Definition und Umsetzung der Governing Principles sollen Massnahmen in den folgenden Teilbereichen definiert werden:

Code of Conduct

Verträge Organe Operative Bewertung, Berichte, Investor Prozesse Portfolio Reports Relations

Abbildung: Massnahmen im Rahmen umfassender Governing Principles

Es genügt vor diesem Hintergrund nicht, die Ethik als „Heilmittel“ zu betrachten, welches vorübergehend verordnet ist. Vielmehr stehen ethische Grundwerte gemeinsam mit dem durchaus legitimen Streben nach Gewinn am Anfang und am Ende jedes Engagements.

Die ethisch korrekte Ausübung des Private Equity Geschäfts entspricht einer volkswirtschaftlich notwendigen und erwünschten Funktion im Rahmen

1 Wobei die Umwelt nicht im eigentlichen Sinne als Anspruchsgruppe verstanden werden kann. Vielmehr ist mit NGOs zu rechnen, welche als Anspruchsgruppen auftreten. 373 S y E y C y A Swiss Private Equity & Corporate Finance Association

effizienter und risikogerechter Kapital Allokation. Führende Akteure im Pri- vate Equity Bereich werden die vorliegenden Grundsätze und Handlungs- anweisungen umsetzen, um sich damit von ihren Mitbewerbern zu differen- zieren.

2. Fundraising und rechtliche Dokumentation

2.1 Fazit Die erfolgreiche Lancierung eines Private Equity Funds hängt von vielen Faktoren ab. Wesentliche Faktoren sind die Ausrichtung des geplanten Funds sowie der Track Record des Fund Managers im Rahmen der beab- sichtigten Investitionsstrategie. Die Initianten eines Private Equity Funds informieren potenzielle Investoren daher in einer frühen Phase der Lancie- rung mittels eines Preliminary Placement Memorandum (PPM) umfassend über den zukünftigen Fund. In einer späteren Phase wird die ausführliche Dokumentation erarbeitet, nämlich das Placement Memorandum und die Gründungsunterlagen des Funds. Diese Vorschläge werden in Verhand- lungen mit den Investoren ausgearbeitet und bilden dann die Grundlage für die spätere operative Tätigkeit wie für die Corporate Governance.

2.2 Ausgangslage Die frühzeitige Planung ist unerlässlich für eine erfolgreiche Lancierung eines Private Equity Funds. Die Planung umfasst dabei u.a. die Definition der Investment Strategie, die Zielmärkte und davon abhängig die Grösse des anvisierten Funds. Weiter definiert der Initiator eines neuen Funds die rechtliche Struktur und die wirtschaftlichen Eckdaten wie Management Fee und Erfolgsbeteiligung des Fund Managers. Der Initiator muss ebenfalls den entsprechenden Track Record aufarbeiten und bereitstellen. Dazu ge- hören Informationen wie Investitionsvolumen und Erfolgszahlen sowie die Darstellung einiger für die gewählte Strategie typischer Investitionen in der Vergangenheit. In Abhängigkeit von der gewählten Strategie und der wirtschaftlichen Situation werden die notwendigen Ressourcen beim Fund Ma- nager (Teamgrössen, fachliche Kompetenzen, finanzielle Mittel) definiert. Die Ergebnisse werden im Preliminary Placement Memorandum (PPM) zu- sammengefasst.

In einer späteren Phase des Fund Raisings werden die im Rahmen des Preliminary Placement Memorandum festgehaltenen Eckpunkte aufgrund des Feedbacks von potenziellen Investoren überarbeitet und im Placement Memorandum (PM) festgehalten. Parallel werden die rechtliche Struktur definiert und die entsprechenden Dokumente erarbeitet (z.B. Limited Part- nership Agreement). Es ist üblich, dass die rechtlichen Dokumente wie das Limited Partnership Agreement das Resultat von Verhandlungen mit zu- künftigen Investoren sind. Im Rahmen dieser Verhandlungen soll der Initia- tor mit geeigneten Massnahmen sicherstellen, dass alle existierenden und

374 Yearbook 2008

potenziellen Investoren laufend über die Änderungen informiert werden. Dem Sponsor eines Private Equity Funds obliegt auch die Pflicht, die Rege- lungen zur der Geldwäscherei einzuhalten.

2.3 Votum Die Dokumentation wird im Wesentlichen aus einem Placement Memoran- dum sowie den Gründungsurkunden bestehen. Das Preliminary Placement Memorandum sowie in einer späteren Phase das Placement Memorandum sind die wichtigsten Marketinginstrumente und müssen vor dem First Clo- sing vorliegen. Beim Marketing der Investitionsmöglichkeit müssen die Vor- schriften der verschiedenen Jurisdiktionen beachtet werden. Es ist üblich, dass die Dokumente im Rahmen der Verhandlungen mit potenziellen Inves- toren laufend angepasst werden. Dabei ist es wichtig, dass alle Investoren laufend über die Anpassungen informiert werden. Die Dokumentation muss vollständig, korrekt transparent und klar verständlich sein. Track Record In- formationen sollen zudem testiert werden.

Folgende Punkte sollen behandelt werden:

Preliminary Placement Memorandum / Placement Memorandum Generelle Informationen zum Fund - Strategische Ausrichtung (Investment Scope und Zielmärkte) - Informationen zu den Zielmärkten (z.B. Marktgrösse, Transaktionsvo- lumen, Konkurrenzsituation) - Fundgrösse bzw. Target (nur PPM bzw. IM) - Grundzüge der rechtlichen Struktur und Domizil der Investitionsgele- genheit - Investment (Anlage) Richtlinien, Investment Kriterien und Investment Periode - Investment Restriktionen inklusive Lending und Borrowing Richtlinien - Exit-Strategien (Investments) - Zusammenfassung der wirtschaftlich relevanten Eckpunkte der rechtlichen Dokumentation wie Limited Partnership Agreement - Darstellung des relevanten Track Records - Darstellung einiger Beispiele für strategiekonforme Investments - Risikofaktoren - Darstellung der steuerlichen und rechtlichen Situation in aus- gewählten Jurisdiktionen (Herkunftsländer der wichtigsten Investoren)

375 S y E y C y A Swiss Private Equity & Corporate Finance Association

Informationen zum Fund Manager - Management Struktur und Management Team - Investment Committee und Advisory Board - Rechte und Pflichten des Managers - Entschädigung des Managers - Andere Erträge des Managers (Verwaltungsratshonorare, Transaktionsgebühren) - Ko-Investitionen Dokumentation zum Fund (z.B. Limited Partnership Agreement) - Parameter der Investitionstätigkeit (z.B. maximaler Investmentbetrag pro Portfoliogesellschaft, Limitationen im Underwriting) - Abrufmechanismus (Drawdown) von Committed Capital bei Limited Partnerships und die Folgen bei Nichterfüllen (Default Clause) - Management Fee und Erfolgsbeteiligung - Ausschüttungspolitik - Regelungen zur Ablösung des Fund Managers - Beendigung und Auflösung des Private Equity Funds oder der Private Equity Gesellschaft - Regelungen zu den erforderlichen Quoren für die Änderungen und Ergänzungen der Dokumentation - Bewertungs- und Berichterstattungsrichtlinien - Aufteilung der Betriebskosten des Private Equity Funds zwischen In- vestoren und Fund Manager - Rechte und Pflichten des Investor Advisory Boards sowie der Annual Investor Meetings (sofern anwendbar) - Handhabung von möglichen Interessenkonflikten - Lancierung anderer Funds durch den Manager bzw. die Übernahme anderer Beratungsmandate durch den Manager während der Laufzeit des aktuellen Funds - Ausscheiden eines Investors bzw. Abtretung und Verkauf der Fund-Anteile

376 Yearbook 2008

3. Investitionsprozess

3.1 Fazit Der Manager des Private Equity Funds tätigt im Rahmen der definierten Investitionsstrategie eine Investition mit höchstem Sachverstand und mit der grösstmöglichen Sorgfalt. Dies setzt eine professionelle Arbeitsweise in allen Phasen des Prozesses voraus.

3.2 Ausgangslage Der Investitionsprozess im engeren Sinn beginnt nach der Identifikation eines möglichen Zielunternehmens mit der Analyse des Targets (Due Dili- gence). Wichtige weitere Phasen sind der Investitionsentscheid, die Struk- turierung und Abwicklung der Transaktion sowie der spätere Exit. Der Betreuung während der Haltedauer ist ein separates Kapitel gewidmet. Ein spezieller Aspekt des Investitionsprozesses ergibt sich, wenn Folgeinvesti- tionen getätigt werden.

Due Diligence Der vom Manager geführte Due Diligence Prozess ist ein zentrales Element im Investitionsprozess und umfasst in der Regel alle wichtigen Unterneh- mensbereiche wie Geschäftsmodell, Finanzen, Recht, Steuern, Technolo- gie, Umwelt und Personalvorsorge.

Investitionsentscheid Im professionellen Umfeld wird der Investitionsentscheid auf Basis eines umfassenden Investitionsantrags getroffen. In einem solchen Antrag werden das Geschäftsmodell, der Businessplan, die Stärken und Schwächen, die Chancen und Risiken sowie die Bewertungsüberlegungen im Detail zuhanden des Investitionskomitees dargestellt. Das Investitionskomitee setzt sich in der Regel aus den Entscheidungsträgern des Fund Managers zu- sammen, die üblicherweise über umfangreiche relevante Erfahrungen ver- fügen. Ein guter Investitionsantrag kann für die Überprüfung der Entwick- lung einer Investition später wieder herangezogen werden und dient somit als ein Referenzpapier für die Beurteilung der Erfolgsentwicklung.

Strukturierung einer Investition / Folgeinvestitionen Investitionen eines Funds können auf viele verschiedene Wege strukturiert werden. In einigen Fällen, insbesondere im Venture Capital Bereich, ist der Fund ein passiver Minderheitsinvestor. In anderen Fällen hat der Fund Kon- trollmehrheiten. Investitionen sollen immer so strukturiert werden, dass sie der Strategie des Funds entsprechen (Kontrolle, Laufzeit etc.). In diesem Zusammenhang besteht ein Private Equity Fund in der Regel auf die Ent- sendung von ihm vertrauten Personen in den Verwaltungsrat sowie die Un- terzeichnung eines Aktionärbindungsvertrags.

377 S y E y C y A Swiss Private Equity & Corporate Finance Association

Besondere Herausforderungen können sich ergeben, wenn im Syndikat mit anderen Funds investiert wird. Einer Gleichschaltung der Interessen ist grosse Aufmerksamkeit zu schenken.

Insbesondere im Venture Capital Bereich sind Folgeinvestitionen (Follow-on Investitionen) häufig. Konflikte können sich unter Anderem ergeben, wenn ein Manager mehr als einen Fund betreut, der ins entsprechende Target investiert hat oder wenn Mitarbeiter des Managers auch direkt ins Target investiert haben.

Dokumentation Die Beteiligung an einem Unternehmen oder der Kauf eines Unternehmens schlägt sich in einer grossen Zahl von umfangreichen Dokumenten und Verträgen nieder. Für den Fund Manager geht es dabei insbesondere dar- um, das Investment durch entsprechende vertragliche Regelungen best- möglich zu schützen (z.B. Gewährleistungen der Verkäufer, Aktionärsrechte und -pflichten).

Verkauf einer Investition (Exit) Der Fund Manager wird die Art und Weise sowie den Zeitpunkt eines Exits in enger Abstimmung mit den anderen Investoren und unter Berücksichti- gung der aktuellen Marktsituation bestimmen. Spezifische Problemstellun- gen können sich ergeben, wenn ein Investmentsyndikat einen Exit- Entscheid zu treffen hat.

3.3 Votum Due Diligence Ein Investment Manager führt im Rahmen der Abklärungen für einen Inves- titionsentscheid eine sorgfältige und den Verhältnissen angemessene Due Diligence durch. Die Erkenntnisse der Due Diligence und die daraus abge- leiteten Schlussfolgerungen sind vor dem Hintergrund des Investitionsan- trags offen und transparent darzustellen. Ein erfolgreicher Fund Manager wird ebenfalls nicht zögern, den Akquisitionsprozess abzubrechen, wenn die Due Diligence entsprechende Ergebnisse zu Tage bringt. Professionali- tät und Objektivität sind absolut erforderlich.

Investitionsentscheid Wenn immer möglich sollte der Investitionsentscheid von mehreren erfah- renen und branchenkundigen Personen getroffen werden. Die Basis für diesen Entscheid bildet ein Investitionsantrag, der umfassend über Ge- schäftsmodell, Businessplan, Stärken, Schwächen, Chancen und Risiken sowie die Bewertungsüberlegungen im Detail und sämtliche Erkenntnisse aus der Due Diligence orientiert. Es ist die Aufgabe des Investitionskomi- tees, Chancen und Risiken entsprechend abzuwägen. Ist die Person, welche den Investitionsantrag ausgearbeitet hat, Mitglied des im Entschei-

378 Yearbook 2008 dungskomitees, sollte sie beim entsprechenden Entscheid in den Ausstand treten.

Strukturierung einer Investition / Folgeinvestitionen Jede Investition soll so strukturiert werden, dass die Interessen des Funds gewahrt werden. Dazu gehören insbesondere Mitspracherechte im Rahmen des Aktionärsbindungsvertrags, der Statuten und des Organisationsregle- ments und sowie die Garantien und Gewährleistungen des Kaufvertrags. Der Fund Manager wird ebenfalls für eine steueroptimale Struktur besorgt sein. Für einen Fund Manager ist es ratsam, ein Netzwerk von Experten zu pflegen, um Transaktionen effizient und optimal abwickeln zu können. Ein eingespieltes Team ist insbesondere in Auktionssituationen wichtig.

Bei der Strukturierung der Transaktion ist ein der Situation angepasster Ak- tionärbindungsvertrag wichtig. Dieser Vertrag regelt unter anderem folgende Punkte: Zusammensetzung des Verwaltungsrats Informationsrechte Entscheide, welche die Zustimmung der Investoren benötigen, z.B.: - Strategie - M&A-Transaktionen - Dividendenzahlungen - Aufnahme / Rückzahlung von Darlehen - Veränderungen im Aktienkapital Vorzeitiger Austritt eines Investors Rechte der Investoren beim Verkauf - Verkaufsrechte - Tag-along / Drag-along Rights (Recht auf Mitverkauf / Pflicht zum Mitverkauf) Konkurrenzverbote

Insbesondere bei Investitionen im Syndikat wird der Fund Manager versu- chen sicherzustellen, dass die Interessen des Funds nicht durch Unstim-

379 S y E y C y A Swiss Private Equity & Corporate Finance Association

migkeiten im Syndikat geschädigt werden können. Dazu dienen insbesondere entsprechende Regelungen im Aktionärsbindungsvertrag oder im Syn- dikatsvertrag.

4. Information und Berichterstattung

4.1 Fazit Die Berichterstattung eines Private Equity Fund genügt den Ansprüchen der traditionellen Rechnungslegung und den darüber hinausgehenden In- formationsbedürfnissen der Private Equity Investoren.

4.2 Ausgangslage Die externe Berichterstattung ist die massgebende Informationsgrundlage für die Entscheidungen der Investoren und soll daher zeitnah, zuverlässig und korrekt sein. Im Rahmen der Berichterstattung sollen die folgenden As- pekte abgedeckt werden: Informationen zu den Portfoliogesellschaften: Die Berichterstattung soll auch die wichtigsten finanziellen und nichtfinanziellen Informationen zu den einzelnen Portfoliogesellschaften enthalten. Nichtfinanzielle Informa- tionen können u.a. Angaben zu Meilensteinen und zu allfälligen Exit- Plänen sein. Informationen zur Bewertung der Portfoliounternehmen: Die Bewertung der Portfoliounternehmen stellt die zentrale Problematik in der traditionellen Rechnungslegung von Private Equity Funds dar. In einem or- dentlichen Abschluss sind üblicherweise der konkrete Wert der Be- teiligung sowie die allgemein gehaltenen Bilanzierungs- und Bewer- tungsgrundsätze offen zu legen. Weitere Hinweise zur jeweiligen Bewer- tungsbasis und den zugrunde liegenden Annahmen der Bewertung werden in der Regel nicht gegeben. Die Bewertungs-grundlagen werden üb- licherweise den Mitgliedern des Investor Advisory Boards vorgestellt.

4.3 Votum Der nach gesetzlichen Vorgaben oder anerkannten Rechnungslegungs- standards generierte Abschluss eines Private Equity Funds mit seinen klas- sischen Bestandteilen Bilanz, Erfolgsrechnung, Mittelflussrechnung und Anhang soll den Investoren ein den tatsächlichen Verhältnissen entspre- chendes Bild der wirtschaftlichen Lage vermitteln (True and Fair View).

Ein Private Equity Fund soll in seinen Geschäftsberichten eine erweiterte externe Berichterstattung vornehmen, welche sowohl den traditionellen Ab- schluss beinhaltet als auch den darüber hinausgehenden Informations- bedürfnissen der Investoren gerecht wird. Neben dem eigentlichen Ab-

380 Yearbook 2008 schluss sind in einem Geschäftsbericht gemäss den gültigen EVCA Repor- ting Guidelines die folgenden Informationen offen zu legen:

Informationen zum Private Equity Markt, z.B: - Übersicht über Entwicklungen und Trends im Private Equity Markt - Regulatorische Entwicklungen - Marktposition des Private Equity Funds Informationen zum Private Equity Fund, z.B: - Executive Summary zur Investitionstätigkeit - Traditioneller Abschluss - Partners’ Capital Account Statement (bei Limited Partnerships) - Fee Statement - Fund Performance (bei Limited Partnerships: IRR) - Fund Summary (Rechtsform und Organisationsstruktur, Investitions- strategie und Anlagerichtlinien, Qualifikation und Track Record des Investment Managers, Investitionsprozess) - Angaben zur Corporate Governance des Funds - Angaben zum Risk Management des Funds Informationen zu den Portfoliounternehmen, z.B: - Investmentübersicht (total investierter Betrag, Investitionen und Des- investitionen, Bewertungen, realisierte und unrealisierte Gewinne und Verluste) - Bewertungsgrundlagen und -annahmen - Wesentliche Finanzkennzahlen (Umsatz, EBITDA, EBIT, Nettoergebnis) - Grunddaten (Name, Sitz, Geschäft, Branche, Rolle des Private Equity Funds, Finanzierungsphase) - Geschäftsverlauf und spezifische Ereignisse - Milestoneanalyse - Exit-Pläne Ein Private Equity Fund soll quartalsmässig Bericht erstatten. Der Jahres- abschluss soll durch unabhängige Wirtschaftsprüfer geprüft werden.

381 S y E y C y A Swiss Private Equity & Corporate Finance Association

5. Bewertung der Portfoliounternehmen

5.1 Fazit Die Portfoliounternehmen werden unter Vorbehalt von Sonderfällen im Rahmen der externen Berichterstattung mit dem beizulegenden Fair Value (Zeitwert) bewertet. Es wird ein adäquater Bewertungsprozess implemen- tiert, der der grossen Bedeutung der Bewertung gerecht wird.

5.2 Ausgangslage Die regelmässige Bewertung der Portfoliounternehmen im Rahmen der externen Berichterstattung ist eine zentrale Herausforderung im Private Equity Geschäft. Eine den wirklichen Verhältnissen entsprechende Bewertung von Portfoliounternehmen ist von zentraler Bedeutung: Sie determiniert im We- sentlichen die Performance eines Funds (Net Asset Value und IRR) sowie (unter Umständen) das Ausmass der Entlohnung des Investment Mana- gers.

Die Bewertung der Beteiligungen erfolgt gemäss den Anforderungen der Fund Reglemente (Limited Partnership Agreement, gesetzliche Vorschrif- ten). Wegen der bekannten Bewertungsproblematik soll ein Private Equity Fund seine Beteiligungen gemäss dem Fair Value Konzept bewerten. Das Konzept des Fair Value Accountings etabliert sich zunehmend als Stan- dard für die Portfoliounternehmen und für das Reporting von Funds.

Ausnahme: Bei Portfoliounternehmen, deren Marktwert schwer zu ermitteln ist, darf die Bewertung gemäss bisheriger Schweizer Tradition zu den Einstandskosten erfolgen, sofern diese tiefer sind als der Fair Value. Dies gilt vor allem für jüngere Unternehmen, die noch weit von der Profitabilität entfernt sind, sowie für Beteiligungen, deren Bewertung zum Fair Value Prinzip unverhältnismässig aufwändig ist.

5.3 Votum Ein Private Equity Fund soll einen adäquaten Bewertungsprozess zur Be- stimmung zuverlässiger Fair Values der Beteiligungen implementieren. Bei der Bestimmung des Fair Values einer Beteiligung gliedert sich der Prozess in die folgenden zwei Schritte:

Im ersten Schritt sind alle bewertungsrelevanten Faktoren und Techniken systematisch zu evaluieren und zur Bestimmung des Fair Values jeder Beteiligung heranzuziehen. Zu diesen Faktoren und Techniken gehören insbesondere:

382 Yearbook 2008

Anschaffungskosten einer Beteiligung Erzielte Preise bei nachfolgenden Finanzierungsrunden oder Markttran- saktionen (Trade Sale, Secondary Sale) Ermittelte Werte aus Bewertungsmodellen (Substanzorientierte An- sätze, Discounted Cash Flow Methode, Market Multiples) Nicht quantifizierte Wertindikatoren wie Milestoneanalyse, spezifische Ereignisse im operativen Bereich (z.B. Liquiditäts- und Finanzengpässe, Verlust oder Wechsel des Managements, ausstehende Gerichtsfälle) und Umweltanalyse (z.B. negative Marktentwicklung, technologische Entwicklungen, politische Veränderungen) Basierend auf einer Gesamtbetrachtung sämtlicher aus dem ersten Schritt resultierender Hinweise für den Fair Value ist im zweiten Schritt nach bes- tem Wissen und Gewissen die Bestimmung des Fair Values per Bewer- tungsstichtag vorzunehmen. Falls aus den anwendbaren Faktoren und Techniken verschiedene Werte resultieren, hat sich der Bewertende situati- onsspezifisch für jene Bewertungsgrundlage zu entscheiden, welche als verlässlichste Quelle des Fair Values betrachtet werden kann. Die Zuver- lässigkeit der Bewertungsmodelle ist genau zu evaluieren. Ein zuverlässiger Preis einer vergleichbaren Transaktion während der Bewertungsperiode ist als bester Hinweis für den Fair Value zu betrachten und dementsprechend einem Modellwert vorzuziehen.

Die Bewertung jeder Beteiligung ist mittels eines standardisierten Valuation Worksheets zu dokumentieren.

In Fällen, in denen die vorgenannten Methoden keine zuverlässige Bewer- tungsgrundlage bieten oder zu aufwändig sind, insbesondere bei jüngeren auf absehbare Zeit nicht profitablen Unternehmen, kann die Bewertung zu den Einstandskosten erfolgen. Abweichungen vom Fair Value Ansatz sind offen zu legen und zu begründen.

Im Rahmen der Corporate Governance sind als Teil des Bewertungspro- zesses angemessene Kontrollmechanismen zu implementieren. Dazu kön- nen folgende Massnahmen gehören: regelmässige Valuation Meetings des gesamten Investment Teams, die Evaluation und Genehmigung der Bewer- tung durch die Geschäftsleitung des Investment Managers, die Evaluation und Genehmigung der Bewertung durch das Kontrollgremium (AG: Verwal- tungsrat, LP: Advisory Board) des Funds sowie die Bewertungsprüfung durch den Abschlussprüfer.

383 S y E y C y A Swiss Private Equity & Corporate Finance Association

6. Interessenkonflikte

6.1 Fazit Potenzielle Interessenkonflikte zwischen dem Fund Manager und den In- vestoren sind im Private Placement Memorandum (PPM) transparent darzulegen und zu erörtern. Adäquate Massnahmen und Mechanismen zur Entschärfung dieser Konflikte sind in der Governance Struktur des Funds (AG: Statuten und Reglemente; LP: Gesellschaftsvertrag) zu implementieren und ebenfalls im PPM offen zu legen.

6.2 Ausgangslage Die Beziehung zwischen dem für die Vermögensverwaltung verantwortli- chen Fund Manager und den Investoren (LP: Limited Partners, AG: Aktio- näre) kann potenziellen Interessenkonflikten ausgesetzt sein.

Derartige Interessenkonflikte in einer Fund Struktur können unter-schied- licher Art sein. Typische Interessenkonflikte sind beispielsweise: Fund Manager: Reduktion des Arbeitseinsatzes und der Qualität der Vermögensverwaltung; insbesondere in Absenz einer angemessenen Anreizentlohnung „Distribution in Specie“ anstelle von Cash Beauftragung einer dem Fund Manager nahe stehenden Institution z.B. mit einem Investment Banking Mandat Falsche Strukturierung der erfolgsabhängigen Entlöhnung 6.3 Votum Im Private Placement Memorandum (PPM) des Private Equity Funds ist darzulegen, wie im Rahmen des Vertragswerks allfällige Interessenkonflikte gelöst werden.

Mittels angemessener Kontrollen und Anreizsysteme können potenzielle In- teressenkonflikte adäquat entschärft werden. Beispiele solcher Massnah- men sind nachfolgend aufgeführt.

Private Equity Fund in der Form der LP – Spezifische Vertragsklauseln im Limited Partnership Agreement (LPA):

Aufnahme von Kontrollrechten für die Investoren: Suspension Clauses (Recht des Investors zur Einstellung weiterer Zahlungen), Divorce Clauses (Recht zur Auswechslung des Investment Managers) sowie Termination Clauses (Recht zur Liquidation des Funds). Bezüglich den Divorce Clauses kann unterschieden werden zwischen No-Fault Divorce Clause und For Cause Divorce Clause.

384 Yearbook 2008

Errichtung eines Advisory Boards, bestehend aus Limited Partners, welches spezifische, im Rahmen des Limited Partnership Agreements de- finierte Aufgaben wahrnimmt (z.B. Information zu den Bewertungen, Be- handlung von Interessenkonflikten, Bewilligungen im Rahmen von Aus- nahmeregelungen). Vereinbarung, dass der Jahresabschluss durch einen unabhängigen Wirtschaftsprüfer geprüft und testiert wird. Diese Prüfung soll insbesondere auch die internen Prozesse und Kontrollen des Fund Managers im Rahmen der Abschlussprüfung miteinbeziehen. Vertragliche Festlegung von Anlagerichtlinien und periodische Über- prüfung der Einhaltung durch unabhängige Wirtschaftsprüfer. Vertragliche Vereinbarung einer Kapitalbeteiligung des Fund Managers am Fund zwecks Interessenharmonisierung mit den Investoren. Private Equity Fund in der Form der AG – Festzulegen in Statuten und Reglementen:

Kontrollrechte der Aktionäre: Recht zur Auswechslung des Fund Man- agers aufgrund Statutenfestsetzung durch Generalversammlung. Kontrolle durch den Verwaltungsrat der AG: Dieser soll beispielsweise die folgenden Überwachungs- und Kontrollaufgaben wahrnehmen (in den Statuten festzulegen): (1) Prüfung der Einhaltung der Anlagerichtlinien durch den Investment Manager;

(2) Genehmigung der Fee-Zahlungen an den Investment Manager;

(3) Überwachung der Liquiditätssituation des Funds;

(4) Genehmigung der Bewertung der Portfoliounternehmen im Rahmen der externen Berichterstattung;

(5) Generelle Überwachung der Performance des Funds.

Verabschiedung verbindlicher Anlagerichtlinien und periodische Über- prüfung der Einhaltung durch unabhängige Wirtschaftsprüfer. Kapitalbeteiligung des Fund Managers am Fund zwecks Interessenharmonisierung.

385 S y E y C y A Swiss Private Equity & Corporate Finance Association

7. Unabhängigkeit

7.1 Fazit Die Corporate Governance soll sicherstellen, dass mit den seitens der In- vestoren anvertrauten Geldern sorgfältig umgegangen wird. Grösstmögli- che Unabhängigkeit zwischen dem Private Equity Fund und dem Fund Manager soll dazu führen, dass die Investoren ihre Kontrollrechte optimal ausüben können. Es kann nicht genug betont werden, dass im professionellen Private Equity Umfeld der Fund Manager und die Organe des Funds dasselbe Ziel verfolgen: ein möglichst optimales Investitionsergebnis.

7.2 Ausgangslage Die Organisation und Ausgestaltung des Private Equity Funds, der Mana- gementgesellschaft sowie allfälliger Kontrollgremien hängen im Wesentli- chen von den jeweiligen Rechtsformen ab. Für jede Rechtsform ist aus den geltenden Rechtsvorschriften zu entnehmen, wie der Fund und die Mana- gementgesellschaft zu organisieren sind und welches die Rechte und Pflichten der jeweiligen Organe sind. Allfälligen rechtlichen Anforderungen betreffend die Unabhängigkeit sind dabei besondere Aufmerksamkeit zu schenken.

Eine angemessene Unabhängigkeit zwischen dem Fund Manager und den Investoren ist ein zentrales Element einer funktionierenden Corporate Go- vernance.

7.3 Votum Die Organe des Funds und der Managementgesellschaft, d.h. beispielsweise Verwaltungsrat, Geschäftsleitung, Investment Committee, sind so zu besetzen, dass das Prinzip der „checks and balances“ optimal funktioniert. Auch unter Berücksichtigung der Einhaltung von Unabhängigkeitsvorschrif- ten soll eine konstruktive Zusammenarbeit zwischen dem Fund Manager und den Organen des Funds jederzeit möglich sein. Oberste Maxime ist der optimale Einsatz der Investorengelder und die Erzielung einer guten Rendi- te für die Investoren.

Es ist sicherzustellen, dass die Kontrollrechte sämtlicher Investoren jederzeit ausgeübt werden können. Um dies zu erreichen, ist die Unabhängigkeit horizontal (z.B. zwischen Fund Manager und Fund) und vertikal (innerhalb der Organe und Geschäftsleitung des Funds oder der Managementgesell- schaft) zu gewährleisten:

386 Yearbook 2008

Eigenständige Willensbildung der von der Fragestellung betroffenen Personen, die über entsprechende fachliche Fähigkeiten verfügen und unter Berücksichtigung der gesetzlichen, statutarischen oder vertragli- chen Pflichten entscheiden. Klare Regelung der Zuständigkeiten, Kompetenzen und Verantwortun- gen, Berichterstattung, Aufsicht sowie der Vorschriften über Beschluss- fassung und Protokollierung in Reglementen und Statuten (AG) sowie Gesellschaftsvertrag (LP).

8. Ko-Investitionen des Fund Managers

8.1 Fazit Ko-Investionen des Fund Managers sind verbindlich im Gesellschaftsver- trag (Limited Partnership) respektive in den Statuten (Aktiengesellschaft) zu regeln. Zwecks Interessenharmonisierung zwischen Investoren und Fund Manager sollte sich letzterer idealerweise am Fundkapital beteiligen.

8.2 Ausgangslage Heute ist es Industriestandard, dass der Fund Manager mindestens 1% des Fund Kapitals beibringt. Dadurch wird versucht, die Interessen zwischen externen Fund Investoren und dem Fund Manager gleichzuschalten.

Einige Private Equity Gesellschaften erlauben es dem Fund Manager, in gewissem Umfang direkt in die Zielunternehmen zu investieren. In den meisten Fällen ist eine derartige Regelung suboptimal. Zur Sicherstellung der Investoreninteressen stellen sich in einem solchen Fall besondere An- forderungen an die Corporate Governance.

8.3 Votum Eine Ko-Investition hat grundsätzlich vor dem Hintergrund zu geschehen, dass jederzeit die Interessen sämtlicher Fund Investoren vollumfänglich gewahrt werden. Im Falle einer Beteiligung des Fund Managers am Fund, was heute dem Industriestandard entspricht, ist dies vollumfänglich gegeben. Der Fund Manager hat in diesem Fall den grössten Anreiz, für den Fund eine optimale Performance zu erzielen.

Direktinvestitionen des Fund Managers in ausgewählte Zielunternehmen sind in der Regel nicht erlaubt. Sind in gewissem Umfang seitens des Fund Managers Direktinvestitionen in die Zielunternehmen dennoch erlaubt, ist einerseits sicherzustellen, dass ein transparentes Auswahlverfahren vorhanden ist und andererseits die Manager zu gleichen Konditionen investieren wie der Fund. In Bezug auf die Grössenordnung derartiger Direktinvesti- tionen ist sicherzustellen, dass der Fund Manager immer den Anreiz hat, sämtliche Portfoliounternehmen angemessen zu betreuen.

387 S y E y C y A Swiss Private Equity & Corporate Finance Association

Es ist ratsam, derartige Ko-Investitionen beispielsweise durch das Advisory Board überprüfen zu lassen.

9. Zusammensetzung des Fund Management Teams

9.1 Fazit Die optimale Zusammensetzung des Fund Management Teams ist ent- scheidend für den Investitionserfolg. Den Aspekten unterschiedlicher Er- fahrungen, Kompetenz, Reputation sowie Ausbildung ist dabei besondere Beachtung zu schenken.

9.2 Ausgangslage Der Zusammensetzung des Fund Management Teams kommt in Bezug auf den Investitionserfolg eines Private Equity Funds eine entscheidende Be- deutung zu. Dabei gilt es zu beachten, dass je nach Phase des Investiti- onsprozesses unterschiedliche Fähigkeiten und Erfahrungen notwendig sind. Bei der Beurteilung eines Investments sind strategische Kompetenzen sowie industrielle Erfahrung gefragt. Zur Durchführung einer Transaktion braucht es erfahrene Dealmaker, bei der nachfolgenden Betreuung industrielle und organisatorische Kompetenz.

9.3 Votum Zur Sicherstellung des optimalen Einsatzes der dem Management Team anvertrauten Investorengelder gilt es, bei der Zusammensetzung des Teams insbesondere folgenden Elementen Beachtung zu schenken:

Fähigkeiten und Erfahrungen: Das Fund Management Team soll so zusammengesetzt sein, dass im Team alle Kompetenzen vorhanden sind, die für eine optimale Aufgabenerfüllung über alle Stadien des In- vestmentzyklus hinweg erforderlich sind. Investitionsentscheide müs- sen aufgrund einer gesicherten Informationsbasis getroffen und umge- setzt werden können. Es muss das Wissen und die Erfahrung im Team vorhanden sein, um die bei einem Einstieg nötigen Prüfungen durchzu- führen, die Analyseergebnisse richtig zu interpretieren und die Transak- tionen formell einwandfrei abzuwickeln. Nach dem Einstieg sind zusätz- liche Fähigkeiten gefragt. Abhängig davon, wie tief sich ein Fund Ma- nager in das tägliche Geschäft einer Portfoliogesellschaft involviert, sind operative Erfahrungen von Teammitgliedern allenfalls ein Muss. Bei der Teamzusammensetzung ist zu entscheiden, welches die optimale Teamgrösse ist und wie dieses zusammengesetzt werden soll. In der Regel zahlt es sich aus, wenn eine Ausgewogenheit zwischen aus- gesprochenen Dealmakern und operativ und führungsmässig erfahre-

388 Yearbook 2008

nen Managern besteht. Ein idealer Fund Manager vereinigt beide Kom- petenzen. Beziehungen: Mit der zunehmenden Reife der Industrie und dem damit einhergehenden Wettbewerbsdruck werden persönliche Beziehungen und Netzwerke sowie lokale und/oder industrielle Verankerung der Teammitglieder zunehmend wichtiger. Oft sind erfahrene Fund Manager Mitglieder in Verwaltungsräten und/oder wirtschaftlichen Interessenver- bänden. Reputation: Ein solider Investment- und Geschäfts-Track Record sowie ein makelloser Ruf jedes einzelnen Teammitglieds sind Grund- voraussetzungen, damit einem Private Equity Fund die notwendigen In- vestitionsmittel zur Verfügung gestellt werden. Weiter- und Fortbildung: Da das Private Equity Geschäft in Bezug auf die Wissensanforderungen sehr komplex ist, sollen in einem Manage- ment Team Gebiete wie Finanzen, Recht, Steuern, Führung ausreichend kompetent abgedeckt sein. Es ist üblich, dass für die Bearbeitung von speziellen Aufgaben, insbesondere im Rahmen der Abwicklung einer Transaktion, externe Spezialisten beigezogen werden. Kontinuität: Eine ausgeglichene Alterspyramide verbreitert nicht nur die Erfahrungs- und Wissensbasis eines Teams, sondern trägt auch massgeblich zur Kontinuität bei. Die Nachfolge kann auf diese Weise orga- nisch gelöst und die Kultur eines Teams erhalten werden. Investoren legen in der Regel grossen Wert darauf, dass in Bezug auf den Fund Ma- nager als Schlüsselperson Stabilität vorhanden ist. Die diesbezüglichen Anforderungen der Investoren werden oft in sog. Key Man Clauses for- muliert.

10. Entschädigung des Fund Managers

10.1 Fazit Im professionellen Private Equity Umfeld spielt heute die erfolgsabhängige Entschädigung eines Fund Managers eine massgebliche Rolle. Das Ent- schädigungssystem ist so zu strukturieren, dass die dem Fund Manager gewährten Anreize zur Erfüllung der Bedürfnisse der Investoren beitragen. Die Entschädigung beinhaltet in der Regel eine fixe Grundgebühr (Mana- gement Fee) und eine variable Erfolgsgebühr (beispielsweise Carried Inte- rest). Die Erfolgsgebühr führt zu einer Interessenharmonisierung zwischen Investoren und Fund Manager.

10.2 Ausgangslage Die Entschädigung ist ein wichtiger Faktor in der Beziehung zwischen dem Fund Management und den Investoren. Mittels erfolgsabhängiger Entschä- digung des Investment Managers werden Interessen zwischen den Investo-

389 S y E y C y A Swiss Private Equity & Corporate Finance Association

ren und dem Fund Manager gleichgeschaltet. Im professionellen Private Equity Umfeld sind die Anforderungen, welche den Fund Manager zu einer erfolgsabhängigen Entschädigung berechtigen, oft sehr hoch.

In der Praxis hat sich die Kombination zwischen fixer (Management Fee) und erfolgsabhängiger (beispielsweise Carried Interest) Entschädigung etabliert.

Die operativen Kosten der Managementgesellschaft werden durch die fixe Management Fee gedeckt. Die Transparenz in Bezug auf die Kosten für die Betreuung eines Funds ist heute gross genug, um die fixe Entschädi- gung adäquat festzulegen.

Die am weitesten verbreitete Bemessungsbasis für die Management Fee ist das zugesagte Kapital (Committed Capital). Je nach Art des Funds beträgt die Management Fee heute zwischen 1.5% und 2.0% des zugesagten Kapi- tals.

Zur Berechnung der erfolgsabhängigen Entschädigung sind in der Praxis zwei grundsätzlich verschiedene Modelle anzutreffen:

(1) Berechnung der Performance Fee als Prozentsatz des NAV-Zu- wachses zu Fair Values zwischen zwei Stichtagen (Bewertungsprin- zip); (2) Berechnung der Performance Fee als Prozentsatz der realisierten Ge- winne (Realisationsprinzip). 10.3 Votum Das Entschädigungsmodell eines Private Equity Funds sollte eine fixe Grundgebühr (Management Fee) und eine variable Erfolgsgebühr (beispielsweise Carried Interest) enthalten. Die Management Fee soll die operativen Kosten („at arm’s length“), welche bei der professionellen Betreuung eines Funds anfallen, decken.

Die Performance Fee ist das Entgelt für die Leistungen des Fund Managers als Investor. Die Performance Fee soll sich nach der absolut erzielten Ren- dite richten. Der Benchmark für die erfolgsabhängige Entschädigung soll sich dabei an den „Best in Class“ orientieren.

Der Entscheid für eines der in der Ausgangslage erwähnten Modelle betreffend erfolgsabhängiger Entschädigung hängt primär von der Ausschüt- tungs- respektive Reinvestitionspolitik sowie der vorgesehenen Lebensdau- er eines Private Equity Funds ab. Bei einem Private Equity Fund in der Form der schweizerischen AG steht als Evergreen Fund mit grundsätzlich unlimitierter Lebensdauer die Wertmaximierung des NAV im Vordergrund. In diesem Fall wird in der Regel für die Ermittlung der Performance Fee das Bewertungsprinzip angewendet. Bei einer Private Equity Struktur in der

390 Yearbook 2008

Form der LP dagegen wird das Kapital aus verkauften Portfoliounterneh- men laufend an die Investoren zurückbezahlt und der Fund wird nach rund 10 Jahren aufgelöst. Das Realisationsprinzip, welches den Fokus auf mög- lichst optimale Exits legt, sollte in diesem Fall zum Zuge kommen.

Entschädigungsmodelle sollen für den Investor vollkommen transparent sein. Änderungen der Entschädigungsmodelle während der Laufzeit eines Funds sollen grundsätzlich nicht möglich sein.

11. Zusammensetzung der Organe und Betreuung des Funds

11.1 Fazit Die Organe des Funds und der Managementgesellschaft sind derart zu besetzen, dass sich der Fund und die Portfoliogesellschaften optimal ent- wickeln können. Es soll sichergestellt sein, dass mit den Investorengeldern sorgfältig umgegangen wird. Die optimale Besetzung der Organe des Funds und der Managementgesellschaft sowie ein gutes Zusammenspiel dieser Gremien bilden eine wichtige Erfolgsvoraussetzung. Die Corporate Governance soll so strukturiert sein, dass die Investoren ihre Kontrollrech- te zu jedem Zeitpunkt wahrnehmen können und eine konstruktive Zusam- menarbeit zwischen den Gremien jederzeit möglich ist.

11.2 Ausgangslage Nach Abschluss des erfolgreichen Fund Raisings folgt die lang andauernde Phase des Aufbaus und der Betreuung eines guten Portfolios von Zielun- ternehmungen. Während der ganzen Lebensdauer eines Funds wollen die Investoren sichergestellt haben, dass mit ihrem Geld sorgfältig umgegangen und eine gute Rendite erzielt wird. Durch Einsitznahme in den Gremien des Funds können die Investoren ihre Kontrollrechte ausüben. Eine gute Corporate Governance stellt sicher, dass die Entwicklung des Funds regel- mässig überwacht und beurteilt werden kann. Allfällig notwendige Mass- nahmen sollen dadurch rechtzeitig eingeleitet werden können.

11.3 Votum Die Organe des Funds und der Managementgesellschaft sollen so zusammengesetzt sein, dass eine gute und konstruktive Zusammenarbeit zwischen den Gremien jederzeit möglich ist. Selbstverständlich sollen die einzelnen Organe und deren Vertreter stets unabhängig urteilen können.

Oft wird die Corporate Governance eines Funds verbessert, wenn in den Organen auch erfahrene Externe wie beispielsweise Industriekenner Einsitz nehmen. Der Fund Manager kann von derartigen Personen bei der Beurtei- lung von Investments respektive während der Phase der Betreuung in der Regel erheblich profitieren.

391 S y E y C y A Swiss Private Equity & Corporate Finance Association

Die Organe des Funds und der Managementgesellschaft haben sicherzustellen, dass mit dem anvertrauten Geld sorgfältig umgegangen wird. Dies geschieht durch eine regelmässige Berichterstattung und Überwachung der Investitionstätigkeit. Die periodische Überwachung der Performance der Portfoliounternehmen solle anhand von Meilensteinen erfolgen. Bei Meilensteinen handelt es sich um Zeitpunkte, an denen gewisse Performanceziele erreicht sein sollten. Die formulierten Ziele sollen einfach messbar und auf die spezifischen Ver- hältnisse der Branche, in der sich das Unternehmen befindet, abgestimmt sein. Über die Corporate Governance ist sicherzustellen, dass bei Nichterrei- chung von Meilensteinen die notwendigen Massnahmen eingeleitet werden. Dazu gehören beispielsweise die Erarbeitung eines Aktionsplans durch das Management, die verstärkte Involvierung des Fund Managers in die strategische Planung oder im Extremfall die Entlassung des aktuellen Manage- ments des Portfoliounternehmens. Zur Sicherstellung der Überwachung und Betreuung der Portfoliogesell- schaften nehmen in der Regel Vertreter des Fund Managers in deren Ver- waltungsräten Einsitz.

12. Mitbestimmungs- und Kontrollrechte der Investoren

12.1 Fazit Die Corporate Governance eines Funds soll so gestaltet sein, dass die In- vestoren ihre Kontrollrechte adäquat wahrnehmen können. Die gewährten Kontroll- und Mitbestimmungsrechte sind im Private Placement Memoran- dum offen zu legen. Die Investoren sind diesbezüglich gleich zu behan- deln; im Falle der AG gilt die Regel „one share - one vote“.

12.2 Ausgangslage Je nach rechtlicher Ausgestaltung des Funds verfügen die Investoren allenfalls über weit reichende Mitbestimmungs- und Kontrollrechte. Aufgrund des Fremdverwaltungsinteresses der Investoren wird das Management des Funds einem qualifizierten Fund Manager überlassen. Der Fund Manager soll Ermessen bei der Vermögensverwaltung haben, weshalb Investoren in der Regel keine Investitionsentscheidungen treffen. Über Vereinbarungen zwischen dem Fund Manager und den Investoren sowie die entsprechende Besetzung der Gremien wird sichergestellt, dass die Investoren die ihnen zustehenden Kontrollrechte ausüben können.

12.3 Votum Die Investoren sollen über Kontrollrechte genereller Art verfügen, welche dem Fund Manager die Ausübung seiner Tätigkeiten ermöglichen und ihn

392 Yearbook 2008 nicht über Gebühr einschränken. Die Investoren sollen jedoch das Recht erhalten, vom Fund Manager regelmässig über die Entwicklung des Funds informiert zu werden.

Im Falle einer Ermessensverletzung sollen den Investoren Massnahmen zustehen, die gegenüber dem Fund Manager durchgesetzt werden können. Grundlage der Kontrollrechte der Investoren ist die Interessen-wahrungs- pflicht des Fund Managers gegenüber den Investoren.

Folgende Kontrollrechte zu Gunsten der Investoren sind zu empfehlen:

Recht der regelmässigen Information: Möglichkeit, über das Gremium auf die Geschäftsführung des Fund Ma- nagers Einfluss zu nehmen, wenn diese nicht entsprechend dem urs- prünglich Vereinbarten handelt; Möglichkeit, den Fund Manager bei schwergewichtigem Fehlverhalten abzuwählen (beispielsweise bei Missachtung der festgelegten Investiti- onspolitik; bei Eintreffen von Fällen, welche in der Divorce Clause definiert sind). Bei Private Equity Funds in der Form der schweizerischen AG ist zudem generell darauf zu achten, dass die Kontrollmöglichkeiten der Aktionäre nicht durch die Einführung von Stimmrechtsaktien eingeschränkt werden. Um eine wirksame Kontrolle durch die Aktionäre zu gewährleisten, soll die Regel „one share – one vote“ nicht durchbrochen werden.

Die den Investoren gewährten Kontroll- und Mitwirkungsrechte sind im Pri- vate Placement Memorandum offen zu legen.

393

S y E y C y A Swiss Private Equity & Corporate Finance Association

Code of Conduct for Corporate Finance Professionals

X. S y E y C y A Swiss Private Equity & Corporate Finance Association

SECA Code of Conduct for Corporate Finance Professionals

1. Membership in SECA implies support of corporate finance development and advancement of financial tools and financial engineering.

2. Members act with integrity, competence, dignity, and in an ethical manner when dealing with the public, clients, prospects, employers, employees, and fellow investment professionals.

3. Members enforce ethical and professional standards and ensure that employees comply with internal policies and applicable laws. Such measures are key to engendering a corporate culture that encourages employees to act knowledgeably and responsibly.

4. Members practice and encourage others to practice in a professional and ethical manner that will reflect credit on members and their profession.

5. Members strive to maintain and improve their competence and the competence of others in the profession.

6. Members use reasonable care and exercise independent professional judgment.

7. Members make sure that conflict of interest situations are dealt with in an appropriate and professional manner.

We strongly believe that full disclosure is the best remedy to deter potential abuses. That is, ad-visors should fully disclose to clients (current clients and prospects), employers, and regulators (if required) any potential conflicts that could arise such as:

a) Direct and indirect ownership of securities. Clients and employers should be aware of investments that may compromise, or call into question, the advisor’s independence and objectivity.

b) Referral fees. Clients should be aware whether the advisor’s firm engages in referral arrangements with third parties and whether their business relationship will generate any referral fees for third parties.

8. Members always act in the best interest of their clients. To accomplish this, advisors should be intimately familiar with the client’s objectives, preferences, needs, and processes. Safeguarding this information is paramount to the advisory process and to the client’s interests.

9. No member will take advantage of its position in SECA or abuse any information addressed to SECA.

396 Yearbook 2008

10. Members will abide by the Code of Conduct issued by the Executive Board of SECA.

11. Unethical conduct will be deemed to include any evasive device intended to conceal non-compliance with the Code of Conduct, designated by the Executive Board of SECA for its enforcement.

397

S y E y C y A Swiss Private Equity & Corporate Finance Association

National Associations

XI. S y E y C y A Swiss Private Equity & Corporate Finance Association

EVCA & National Associations

EUROPA EVCA (European Venture Capital Association) Secretary General: Javier Echarri Telephone: +32 2 715 00 20 Fax: +32 2 725 07 04 E-Mail: [email protected] Website: www.evca.eu

AUSTRIA AVCO (Austrian Private Equity and Venture Capital Association) Secretary General: Jürgen Marchart Telephone: +43 1 526 38 050 Fax: +43 1 526 38 05 10 E-mail: [email protected] Website: www.avco.at

BELGIUM BVA (Belgian Venture Capital Association) Secretary General: Guy Geldhof Telephone: + 32 3 297 10 21 Fax: +32 3 297 10 23 E-mail: [email protected] Website: www.bva.be

CZECH REPUBLIC CVCA (Czech Venture Capital Association) Secretary General: Petra Kursóva Telephone: +420 224 235 399 Fax: +420 224 239 424 E-mail: [email protected] Website: www.cvca.cz

DENMARK DVCA (Danish Venture Capital and Private Equity Association) Secretary General: Ib Bøghave Telephone: +45 7225 5502 Fax: +45 3391 1838 E-mail: [email protected] Website: www.dvca.dk

400 Yearbook 2008

FINLAND FVCA (Finnish Venture Capital Association) General Secretary: Antti Sekki Telephone: +358 9 6969 33 00 Fax: +358 9 6969 33 03 E-mail: [email protected] Website: www. fvca.fi

FRANCE AFIC (Association Francaise des Investisseurs en Capital) Secretary General: Dominique Nicolas Telephone: +33 1 47 20 99 09 Fax: +33 1 47 20 97 48 E-mail: [email protected] Website: www.afic.asso.fr

GERMANY BVK (German Private Equity and Venture Capital Association) Managing Director: Dörte Höppner Telephone: +49 30 30 69 820 Fax: +49 30 30 69 82 20 E-mail: [email protected] Website: www.bvk-ev.de

HUNGARY HVCA (Hungarian Venture Capital and Private Equity Association) Executive Secretary: Natália Gömbös Telephone: +36 1 475 0924 Fax: +36 1 475 0925 E-mail: [email protected] Website: www.hvca.hu

IRELAND IVCA (Irish Venture Capital Association) Director General: Regina Breheny Telephone: +353 1 276 46 47 Fax: +353 1 274 59 15 E-mail: [email protected] Website: www.ivca.ie

401 S y E y C y A Swiss Private Equity & Corporate Finance Association

ITALY AIFI (Italian Private Equity and Venture Capital Association) Secretary General: Anna Gervasoni Telephone: +39 02 760 75 31 Fax: +39 02 763 980 44 E-mail: [email protected] Website: www.aifi.it

THE NETHERLANDS NVP (Nederlandse Veregning van Participatiemaatschhappijen) Secretary General: Tjarna D. Molenaar Telephone: +31 20 571 2270 Fax: +31 20 670 8308 E-mail: [email protected] Website: www.nvp.nl

NORWAY NVCA (Norwegian Venture Capital Association) Secretary General: Knut Traaseth Telephone: +47 227 00 010 Fax: +47 227 00 011 E-mail: [email protected] Website: www.norskventure.no

POLAND PPEA (Polish Private Equity Association) Secretary General: Barbara Nowakowska Telephone: +48 22 458 84 30 Fax: +48 22 458 85 55 E-mail: [email protected] Website: www.psik.org.pl

PORTUGAL APCRI (Associacão Portuguesa de Capital de Risco) Secretary General: Paolo Gaetano Telephone: +351 21 330 45 04 Fax: +351 21 353 67 52 E-mail: [email protected] Website: www.apcri.pt

402 Yearbook 2008

RUSSIA RVCA (Russian Venture Capital Association) Secretary General: Albina Nikkonen Telephone: +7 812 326 61 80 Fax: +7 812 326 61 80 E-mail: [email protected] Website: www.rvca.ru

SLOVAKIA SLOVKA (Slovak Venture Capital Association) Telephone: +421 905 640 181 Fax: +421 2 4828 7645 E-mail: [email protected] Website: www.slovca.sk

SLOVENIA SLEVCA (Slovenian Venture Capital Association) c/o Small Business Development Centre Telephone: +386 61 21 7827 Fax: +386 61 21 7846

SPAIN ASCRI (Asociacion Española de Capital Inversión) Secretary General: Dominique Barthel Telephone: +34 91 411 96 17 Fax: +34 91 562 65 71 E-mail: [email protected] Website: www.ascri.org

SWEDEN SVCA (Swedish Private Equity & Venture Capital Association) Managing Director: Tom Berggren Telephone: +46 8 678 30 90 Fax: +46 8 678 40 90 E-mail: [email protected] Website: www.svca.se

UNITED KINGDOM BVCA (British Venture Capital Association) Chief Executive: Peter Linthwaite Telephone: +44 20 7025 2950 Fax: +44 20 7025 2951 E-mail: [email protected] Website: www.bvca.co.uk

403 S y E y C y A Swiss Private Equity & Corporate Finance Association

OTHER African Venture Capital Association www.avcanet.com

Gulf Venture Capital Association www.gulfvca.org

Australian Venture Capital Association www.avcal.com.au

Brazilian Venture Capital Association www.abcr-venture.com.br

Canadian Venture Capital Association www.cvca.ca

China Venture Capital Association www.cvca.com.hk

Hong Kong Venture Capital and Private Equity Association www.hkvca.com.hk

Indian Venture Capital Association www.indiavca.org

The Venture Capital Club for Indonesia Tel: + 62 21 720 6119

Israel Venture Association www.iva.co.il

Korean Venture Capital Association www.kvca.or.kr

Malaysian Venture Capital Association www.mvca.org.my

New Zealand Venture Capital Association www.nzvca.co.nz

Philippines www.philvencap.com

Singapore www.svca.org.sg

404 Yearbook 2008

South African Venture Capital Association www.savca.co.za

Taiwan Venture Capital association www.tvca.org.tw

Thailand Venture Capital Association www.venturecapital.or.th

Turkish Venture Capital Association www.turkvca.org

U.S. National Venture Capital Association www.nvca.org

U.S. Emerging Markets Private Equity Association www.empea.net

405

S y E y C y A Swiss Private Equity & Corporate Finance Association

Index of Persons

XII. S y E y C y A Swiss Private Equity & Corporate Finance Association

Index of Persons (without academic titles)

Surname Forename Company Pages(s)

A Achermann Gilbert Institut Straumann AG 304 Ackermann Fabian KPMG Ltd 222 Affentranger Anton Affentranger Associates SA 155 Aisher Patrick Markus Kinled Holding Limited 332 Albrecht Hans Martin Raiffeisen Schweiz 141 Althaus Konrad Binder Corporate Finance AG 284 Altorfer Urs Luserve AG 308 Amstutz Thomas Absolute Private Equity AG 151, 336 Andreas Neumann Zürcher Kantonalbank 95 Angiolini Federico EPF Lausanne 37 Appenzeller Hansjürg Homburger AG 302 Arbenz Beat Ernst & Young 203 Aschwanden Manuel ETH Zürich 38

B Bächinger Konrad Castle Private Equity AG 338 Bachmann Patrick KPMG AG 118 Bader Hanspeter Unigestion 264 Balsiger Peter aventic partners ag 165 Banik Christoph Institute for Financial Services Zug IFZ 17 Barthold Beat M. Froriep Renggli Rechtsanwälte 297, 371 Bass Albert Das Finanzkompetenzzentrum CCF AG 137 Bauer Michael Capvis Equity Partners AG 64 Bauer Thomas endurit GmbH 19 Bauknecht Gero 28 Baumann Brigitte Go Beyond. Ltd. 209 Baumgarten Mark-Oliver Staiger, Schwald & Partner Rechtsanwälte 321 Baumgartner Curt Nellen & Partner 312 Baumgartner Hans Private Equity Holding AG 239, 345 Sal. Oppenheim jr. & Cie. Baur Leonid 7, 86, 136, 243 Corporate Finance (Schweiz) AG Beaud Christophe Club Valaisan des Business Angels 137, 187 Becker Frank Invision Private Equity AG 220 Beck-Wagner Madeleine Beck Group Ventures 283 Global Equity Partners Beffa Sandro 207 Beteiligungs-Management Schweiz AG Benoit Jean-Guillaume Credit Agricole (Suisse) SA 192 Beretta Alessandro EPP - Energy Producting Properties LLC 295 Berg Nicolas Redalpine Venture Partners AG, XING 28, 50, 137, 240 Berger Jacques Defi Gestion SA 195 Bernhard René Institute for Financial Services Zug IFZ 39, 42 Bertschinger Urs Prager Dreifuss Rechtsanwälte 332 Biedermann Christoph C. Biedermann Septima 332 Bieri Christoph Kurmann Partners AG 306 Billeter Thomas 332 Binder Peter Binder Corporate Finance AG 284 Birbaum Claudine Private Equity Holding AG 239, 345 Bizzozero Marco Deutsche Bank Private Wealth Management 198 Bjønness Søren 17 Bliggensdorfer René International Capital Advisors ICA 218 Blum Oliver CMS von Erlach Henrici 290 Böckenförde Björn Zurmont Madison Management AG 274 Bodin Marc 3D Capital AG 276 Bodmer David Bodmer Advisors AG 332 Bodmer Philip 28 Bödtker Christophe LODH Private Equity AG 228 Böhler Christian Lombard Odier Darier Hentsch 371 Bohnenblust Peter The Corporate Finance Group 258 Bomholt Jan BrainsToVenture AG 175 Böni Pascal Remaco Merger AG 242 Bontognali Ivan 332 Borer Christophe Affentranger Associates SA 7, 332 Both Peter Credit Suisse 332 Boulad Abdullah Swiss Equity Group AG 251 Bourgeois Marc endurit GmbH 19 Brandes Nicole Capital Dynamics 181 Brauchli Barbara PricewaterhouseCoopers AG 7, 132, 237 Brechbühl Beat Kellerhals Rechtsanwälte 305 Brennan Patrick NewFinance Capital 138

408

Yearbook 2008

Surname Forename Company Pages(s)

B Bridge Michael Absolute Private Equity AG 151, 336 Brugger Marc LFPE S.A. 225 Bruix Cédric Argos Soditic SA 164 Brunner Samuel VenGrow Corporate Finance AG 265 Bruppacher C. Mark BHP Bruppacher Hug & Partner 283 Bruppacher Peter R. Sekretariat Bruppacher 332 Bucher Gregor Credit Suisse Asset Management 194 Büeler Martin PricewaterhouseCoopers AG 132 Bugs Michael PricewaterhouseCoopers AG 145 Bühlmann Beat Horizon21 Private Equity 136, 346, 215 Bünter Andreas VenGrow Corporate Finance AG 265 Bürge Andreas b-impact AG 332 Burger Max Apax Partners World Wide LLP 162 Buri Marco H. Complementa Investment-Controlling AG 134 Burkard Thomas TCO Transition Company AG 255 Burkhalter Sascha M. Finavision Management GmbH 332 Bürkler Nicolas Institute for Financial Services Zug IFZ 20, 70

C Campestrini Silvio AAA - Corporate Finance Advisers AG 276 Cappis Christian Netzwerk Espace Mittelland 137 Cassani Alexander Bank Sarasin & Cie AG 168 Casutt Andreas Niederer Kraft & Frey 314 Cesari Mario Vestar Capital Partners 332 Chandra Barbara KPMG AG 118 Chantre Oliver JPh Hottinguer Corporate Finance SA 221 Chillemi Jacques Pictet & Cie 236 Christophers Hans LPX GmbH 229 Cina Jean-Michel Staatsrat 137 Clausen Tom Capvent AG 286 Colic Claudia 332 Comte Pierre 28 Cordero Ricardo Reichmuth & Co Privatbankiers 318 Croset Jean-Claude SCM Strategic Capital Management AG 247 da Silva Howard Deloitte AG 196f. Däpp Hans 28 Davidson John C. Swiss Reinsurance Company 69 de Boer Frédéric ZETRA International AG 271 de Dardel Christophe Unigestion 264 De Gottardi Curzio Banca dello Stato del Cantone Ticino 280 de Vallière Philippe 332 Deflon William WSD Strategy Consultants (Suisse) 329 Degosciu Michel LPX GmbH 81, 229 Dellenbach Hans Emerald Technology Ventures AG 199 Demaria Cyril 19 Den Otter Matthäus Swiss Funds Association SFA 134 Derendinger Peter Alpha Associates 158, 345 Desepibus Thierry ALTIUM CAPITAL AG 161 Diab Mohammed Defi Gestion SA 195 Dialer Philipp SECA 2, 8, 20 Domanig Gina Emerald Technology Ventures 46, 138, 199 Dorfmeister Barbara Wiener Börse AG 140 Doutriaux Stéphane IMD Lausanne 37 Dreher Peter ARALON AG 163 Duffé Andreas Capital Communication AG 286

E Eberhard Peter PEPR Peter Eberhard Public Relations 316 Ebner Martin Patinex AG 122f. Egger Roger Egger & Egger AG 294 Egolf Thomas TAT Capital Partners AG 254 Ene Mirela EVCA 17 Eriksson Andrew MissionPoint Capital Partners 332 Erni Marcel Partners Group 136, 235 Ernst Bettina ETH Zürich 37 Eschler Roland Swiss Equity Group AG 251

F Fankhauser Georg Remaco Merger AG 242 Fecker Lukas Alvarez & Marsal Europe Ltd 332 Federer Thomas Credit Suisse Asset Management 194 Feldmann Clarence P. Schneider Feldmann AG 320

409 S y E y C y A Swiss Private Equity & Corporate Finance Association

Surname Forename Company Pages(s)

F Feurstein Burkhard gcp gamma capital partners 205 Fiechter Ulrich Dr. Ulrich Fiechter, Unternehmensberatung 332 Fischer Gérard SFA & CEO Swisscanto Holding 134 Flammer René Bank Julius Bär & Co. AG 167 Fletcher Andrew AIG Private Equity AG 157, 337 Flett Richard Horizon Equity Partners 139 Fopp Leonhard CONTINUUM AG 332 Fouquet Jean-Francoise Credit Agricole (Suisse) SA 192 Fourie J-P SAVCA 139 Franz Ingo Creathor Venture Management GmbH 191 Frei Alan aventic partners ag 165 Frei Patrik Venture Valuation AG 332 Frei Thomas LODH Private Equity AG 228 Friedli Peter New Venturetec AG 342 Friedli Rolf Capvis Equity Partners AG 183 Frischknecht Martin Credit Suisse 193 Friz Enrico Walder Wyss & Partners 328 Fülscher Jan Business Angels Schweiz 332

G Gähwiler Felix Dynavest AG 293 Galeazzi Michel 3i Schweiz AG 150 Gall Alex E. Steiger Engineering AG 323 Gantner Alfred Partners Group 135, 235 Gauch Urs P. Credit Suisse 141 Gehrer Hanspeter Bank Vontobel 171 Geier Christian Palomar Private Equity AG 315 Geilinger Ulrich HBM Partners AG 7, 44, 212 Geiser Roman Burson-Marsteller 285 Gericke Dieter Homburger AG 141, 302 Giger Corinne Capital Dynamics 181 Glaus Hannes Lustenberger Glaus & Partner 5ff., 126, 134, 140, 308, 353 Gloor Martin Core Capital Partners AG 190 Gogniat Gérard J. 332 Grabherr Oliver gcp gamma capital partners 205 Grauwiler Emanuel BrightHill 177 Gröli Martin PricewaterhouseCoopers AG 145 Grossmann Henning Technopark Zürich 256 Guggenheim Daniel Paguasca Holding AG 315 Guggenheim David Alternative Capital Management AG 277 Guillemin Pierre Swiss Life Asset Management 253 Gunsch-Wegmann Yvonne SWX Swiss Exchange AG 325 Gut Alexander Gut Corporate Finance 210 Gutzwiller Thomas IMG 135 Güzelgün Ayhan Migros Bank 311 Gygax Rudolf Novartis V 30

H Haegler Rolf TAT Capital Partners AG 254 CeTIM – Haemmig Martin 140, 332 Center for Technology & Innovation Management Hafizovic Sadik ETH Zürich 37 Hamburger Marc StartZentrum Zürich 322 Hane Werner ARALON AG 163 Häner Olivier Migros Bank 311 Hansen Sven Good Energies 138 Hartmann Bernd Verwaltungs- und Privat-Bank AG 327 Hartmann Dirk Baumgartner Mächler Rechtsanwälte 281 Haselbeck Fritz ZfU Zentrum für Unternehmensführung AG 332 Häusermann Walter Häusermann Task Management 332 Heer Dominik The Riverside Company 259 Heiz Christoph Meyer Lustenberger 310 Heiz Iwan UBS Global Asset Management AG 262 Hepp Stefan SCM Strategic Capital Management AG 70, 247 Heppelmann Stefan Stern Stewart & Co. 136 Hermann Ralf ZETRA International AG 271 Hess Hans Geberit, Schaffner, Comet, Burkhardt Comp. 136 Hinderling Thomas 30 Hirzel Aloys Hirzel. Neef. Schmid. Konsulenten 300 Hitz Stephan Hitz & Partner Corporate Finance AG 214 Hoch Thomas Co-Investor AG 189 Hoefner Andreas Warburg Alternative Investments AG 268

410

Yearbook 2008

Surname Forename Company Pages(s)

H Hofer Paul R. PRHGroup Suisse SA 332 Hofstetter Philipp PricewaterhouseCoopers AG 141, 238 Hogenmüller Christian Zumtobel Group 140 Holle Thomas AON Jauch & Hübener GmbH 278 Hosang Markus BioMedinvestor AG 174 Huber Matthias Chemolio Holding AG 332 Huber Rudolf Axega GmbH 332 Hüppi Hansjörg Hüppi AG 332 Hutchinson David Box89 Intelligence Services 332

I Ighodaro Adiba Actis 139

J Jans Marcel BDO Visura 173 Janson Manuel Intercountry Consulting Corporation 332 Jaun Markus U bridge GmbH 332 Johansson Bjørn Dr. Bjørn Johansson Associates Inc. 292 Jones Philip London Pensions Fund Authority 134 Jouin Pascal Index Venture Management SA 217 Julian Gretzinger Zürcher Kantonalbank 95 Jung Oliver Adinvest AG 153

K Kaeser Tobias S. Bank Julius Bär & Co. AG 167 Kahlich Herbert FundStreet AG 298 Kaiser Peter Regent Fund Management AG 241 Kälin Francesco SUVA 324 Kaltofen Arnd VI Partners AG 267 Kappeler Marc aventic partners ag 165 Karch Harald International Capital Advisors ICA 218 Kaufmann Fernand High Power Lithium 138 Kawakami-Gavina Seeko Harbert Management Corporation 211 Kehrli Stephan Kehrli & Zehnder Global Wealth Management AG 305 Keiser Erich Druckerei Odermatt AG 2 Keller Adrian PricewaterhouseCoopers 238 Keller Ulrich UBS Global Asset Management AG 262 Khan Agil Deutsche Bank Private Wealth Management 198 Killen Nicolas Borel & Barbey 285 Klingelfuss Marc Bank Vontobel 141, 169 Kluchnik Jorge Regent Fund Management AG 241 Knechtle Tobias Cinven GmbH 187 Kobel Oliver 3i Schweiz AG 150 Kobelt Ulrich 332 Koch Markus Abegglen Management Consultants 277 Köhler Gert Creathor Venture Management GmbH 191 Kohn Eric F. Barons Financial Services SA 332 Kollros Jan adbodmer ag 152 Köppen Kai The Riverside Company 259 Krebs Alexander Capvis Equity Partners AG 7, 136, 183 Kreienbühl Reto BC Partners 282 Krepper Lutz AON Jauch & Hübener GmbH 279 Kretschmer Ralph Credit Suisse 138 Kropp Friedrich Kropp Consulting 332 Kubr Thomas Capital Dynamics 134 Kühni Beat Lenz & Staehelin 141, 307 Kundert Ronald Zürcher Kantonalbank 272 Kunz Richard nebag 341 Künzler Patrik MIT / ETH Zürich 37 Kurmann Jürg Kurmann Partners AG 306 Kusio Daniel BV Holding AG (BV Partners GmbH) 179

L Lamprecht Simon shaPE Capital AG 248 Lanz Rolf CGS Management casparis gloor lanz & co. 186 Lanz Rudolf The Corporate Finance Group 258 Lardi Adelio Lardi & Partners SA 307 Larsen Michael Harbert Management Corporation 211 Lattmann Massimo S. Venture Partners AG 7, 10, 13, 135, 138, 266 Lauper Serge-Alexander SCM Strategic Capital Management AG 70, 73 Laupper Michael Ulexit Capital 263 Leemann Eduardo AIG Private Equity AG 337

411 S y E y C y A Swiss Private Equity & Corporate Finance Association

Surname Forename Company Pages(s)

L Lescroart Philippe Bureau van Dijk 19 Letter Peter EPS Value Plus AG 201, 343 Liebens Francis Néocia - SDIP SA 313 Liebreich Michael New Energy Finance 138 Lingjaerde Sven Endeavour Vision 200 Looser Leo Looser Holding AG 332 Lüchinger Werner 332 Lusengo Zenzo AMB Private Equity Partners 139 Lüthi Marc Banque Bénédict Hentsch & Cie SA 172

M Maag-Pelz Jennifer Capital Concepts International AG 180 MacDonald Scott Emerald Technology Ventures 46 Mächler Philipp Baumgartner Mächler Rechtsanwälte 281 Mäder Martin Fabrel Lotos 204 Marfurt Can Zürcher Kantonalbank 138 Märk Urs Bank am Bellevue 166 Markvoort Hans LGT Capital Partners AG 134, 226, 338 Martelli Marco Invision Private Equity AG 371 Marthaler Stefan Zürcher Kantonalbank 272 Martin Jürg MSM Investorenvereinigung 231 Maurer Remo Portelet AG 316 Mazumder Sita IFZ / HSLU - Wirtschaft 135 Mazzi Ferdinando Oakbridge AG 233 Mégret Dominique 30 Meier Henri B. HBM BioVentures AG 340 Meier Jürg 28, 30 Meier Walter BT&T Gruppe Holding AG 178 Meister Steffen Partners Group 235 Menzi Martin Swiss Capital Group 250 Merta Martina Netviewer AG 136 Meyer Martin Wirtschaftsförderung Wallis 137 Meyer Victor PricewaterhouseCoopers AG 134 Meylan Boris JPh Hottinguer Corporate Finance SA 221 Micheletti Fulvio UBS AG 141 Miranda Luis IDFC Private Equity 140 Missankov Ivan Momentum Group 139 Morandi Claudio Claudio Morandi Consulting 333 Moser Martin Bratschi Wiederkehr & Buob 333 Mück Rainer MMP Mück Management Partners AG 230 Muffler Jürg Fabrel Lotos 204 Mühlemann Daniel Chervil Capital Invest AG 289 Müller Christoph BDO Visura 173 Müller Peter Start Angels Network 249 Müller-Ganz Jörg Helbling Corporate Finance AG 141, 213 Müller-Känel Oliver 333 Mundinger Jochen EPF Lausanne, Routerank 38, 137 Mürer Robin Apax Partners 333

N Näf Beat Müller-Möhl Group 312 Neeracher Christoph Bär & Karrer AG 141, 281 Neidhart Bernhard Amt für Wirtschaft und Arbeit des Kantons Zug 26 Nicod Alain VI Partners AG 267 Niederhauser Peter Redalpine Venture Partners AG 135, 240 Nix Petra Kirchhoff Consult (Schweiz) AG 333 Nüssli Christophe The Corporate Finance Group 258

O Oberhänsli Patrick Robeco (Schweiz) AG 319 Ochsner Markus OLZ & Partners Asset and Liability Management AG 234 Oehler Adrian Integra Holding AG 304 Ogg Matthias Moody's Investor Service 17 Ohnemus Peter 28 Ospel-Bodmer Adriana adbodmer ag 152 Global Equity Partners Ott Kurt 207 Beteiligungs-Management Schweiz AG Ottiger Simon RCI Unternehmensberatung AG 317

412

Yearbook 2008

Surname Forename Company Pages(s)

P Paganoni Roberto LGT Capital Partners AG 7, 9, 61, 134, 226 Pamberg Günther B. COFIDEP SA 290 Parenti Alessandro Advisory & Merchant Partners AG 154 Parravicini Mario Wincor Nixdorf AG 329 Patroncini Guido Zurmont Madison Management AG 274 Payne Andros Humatica AG 84, 303 Pedergnana Maurice SECA 2, 8f., 17, 20, 137f., 371 Pedrazzini Jean-Pierre Egon Zehnder Associes SA 295 Pedrazzini Massimo Studio Legale 333 Pedrett Daniel Arques Corporate Revitalization AG 280 Peretti Klaus Kessler & Co Inc. 306 Perret Marcel Swisscom AG 324 Peter Uwe 333 Petersen Michael 3i Schweiz 141 Petersen Torsten Säntis Capital Investment AG 134, 246 Peyrot Paul Peyrot & Schlegel 333 Pezzei Hansjörg AON Jauch & Hübener GmbH 279 Pfeifer Alexander Bax Capital Advisors AG 282 Pfister Bernd Invision Private Equity AG 136, 220 Pfister Peter Deutsche Bank Private Wealth Management 198 Pfister Peter Start Angels Network 249 Pieper Thomas Die Schweizerische Post / PostFinance 292 Polmann Sabine Swiss Life Asset Management 253 Priddy Gregory P. 28 Pronk Nikolai Gilde Buy Out Partners AG 206 Pümpin Cuno Invision Private Equity AG 136 Puyal Heusser Erika Zürcher Kantonalbank 272

R Ramseier Urs Gsponer Consulting Group International AG 333 Raschle Lukas ZETRA International AG 271 Rebetez Jean-Claude aventic partners ag 165 Reimann Thomas Lutz Rechtsanwälte 333 Reinisch Peter Global Life Science Ventures AG 208 Economic Development of the Canton Rhyner Beat 294 of Zurich / Standortförderung Richiger Robin R. Bank Vontobel AG 169 Riediker Daniel Alegra Capital AG 138 Ries Gerhard BioMedinvestor AG 174 Rihs Andy Sonova Holding AG 135 Rinderknecht Thomas M. Rinderknecht Klein & Stadelhofer 318 Ritter Markus Private Equity Invest AG 317 Rodriguez Yann IDIAP Research Institute Martigny 38 Rohde Alexander Good Energies 299 Rohner Felix Capvis Equity Partners AG 371 Romanzina Peter Landsbanki Kepler 224 Rompel Hans-Dieter Co-Investor AG 189 Roost Ueli SF-Chem 136 Rosenow Ralf Rosenow Grob Schilling 319 Roth Balz Go Beyond. Ltd. 209 Rötheli Andreas Lenz & Staehelin 307 Roy Subhasis Landsbanki Kepler 224 Rudolf Joachim HBM BioVentures AG 340 Rüegg Kurt Swiss Capital Group 250 Ruhier Felix FRC Unternehmensberatung GmbH 297 Ruprecht Fritz HelveticStar Effekten AG 300 Rutishauser Peter Equatis AG 202 Rutsch Werner E. ClaridenLeu AG 100

413 S y E y C y A Swiss Private Equity & Corporate Finance Association

Surname Forename Company Pages(s)

S Sägesser Martin Interims Management 333 Salesny Petra Alpha Associates 158 Sassenburg Hans 28 Sal. Oppenheim jr. & Cie. Sauser Ronald 141 Corporate Finance (Switzerland) AG Scheidegger Alfred Nextech Venture 232 Schellert Ulrike MMP Mück Management Partners AG 230 Schenk Luca OLZ & Partners Asset and Liability Management AG 234 Schenker Urs Baker & McKenzie 333 Scherrer Roland UBS AG 261 Schillig Beat venture kick 35 Schlachter Robert LGT Capital Partners AG 61 Schlaepfer Alexander 333 Schlup Robert Bloch & Partner 333 Schmid Peter 28 Schmid Wolfgang CFP Business Consulting AG 289 Schmidli Fredi Start Angels Network 249 Schmidt-Soelch Wolfgang Heidrick & Struggles 299 Schneebeli Felix Constellation Schweiz AG 291 Schneider Conradin AIG Private Equity AG 157, 337 Schneider Martin Schneider Feldmann AG 320 Schnorf Werner Rudolf Zurmont Madison Management AG 274 Schönbächler Ernst 333 Schönmann Beat 333 Schuler Paul Fortman Cline Consulting GmbH 296 Schülin Philipp AFINUM Management AG 156 Schum René C. TCO Transition Company AG 255 Schuster Jürg Start Angels Network 249 Schweitzer Florian BrainsToVentures AG 7, 8, 32, 33, 175 Schwerzmann Urban Value Partners Associates AG 327 Scriven Thomas H.I.G. European Capital Partners LLP 333 Sebati KLM South African Ambassador 139 Seghezzi Thomas South African Embassy 139 Semmens Guy Argos Soditic SA 164 Sigg Ralph Tendo Corporate Finance AG 333 Simoneschi Nicola Capital Finance and Trust Company (1923) SA 182 Skowronski Bogy CMS Corporate Management Services 188 Specker Urs Carey AG 287 Spiegel Lesley Technopark Zürich 256 Spieler Martin Handelszeitung 136 Spiess Matthias Bank Sarasin & Cie AG 168 Srivastava Govind Soleil Capitale 333 Staehelin Max R. 333 Staehli Roland E. Marchmont AG 309 Stebler Markus P. IMC Investment & Management Consultants AG 216 Steffenoni Claudio Bank am Bellevue 7, 118, 141, 166 Stehli Martin A.I.M. Group AG 333 Steinbach Herbert 28 Stemmle Daniel Valartis Bank AG 326 Stillhart Yvonne LODH Private Equity AG 228 Streib Christoph Credit Suisse 193 Strijker Arjen stamford consultants 322 Ström Ola Carlsdorff Partners AG 333 Strub Karel ZETRA International AG 271 Suard Claude Defi Gestion SA 195 Sumers Gary Blackstone Real Estate Group 70 Sunderji Anand Asset Management 140 Sunderland Neil V. Adinvest AG 153 Superina Marco Credit Suisse 123 Suter Rudolf Optixx AG 314 Svensson Karl Advisory & Merchant Partners AG 154

T Tappy Damien Endeavour Vision 200 Thakur-Weigold Siegmar Warburg Alternative Investments AG 268 Thalmann Oliver Aravis Energy 140 Theler Christoph Zürcher Kantonalbank 141 Thoma Peter Säntis Capital Investment AG 246 Thommen Andreas Hirzel. Neef. Schmid. Konsulenten 7, 13, 300 Thurner Marc University of Applied Science Biel 38 Tirtey Stefan Doughty Hanson Technology Ventures 135 Tischhauser Philippe The Corporate Finance Group 258

414

Yearbook 2008

Surname Forename Company Pages(s)

T Trocia Robert Binder Corporate Finance AG 284 Trunz Roger OLZ & Partners Asset and Liability Management AG 234 Tschäni Rudold Lenz & Staehelin 7, 8 Tschopp Alexandra CEPAX Sustainable Solutions AG 287 Tschopp Felix Tschopp Corporate Finance AG 333 Tuchschmid Stefan ETH Zürich 37

U Unternährer Beat The Corporate Finance Group AG 7, 8, 86, 258, 371

V van den Berg Hans Venture Partners AG 9, 266 van der Geest Edwin Dynamics Group AG 293 Vandebroek Jos G.L. Vandebroek Ventures AG 333 Vätto Timo Citigroup 141 Ved Hiren Alchemy Capital Management 140 Villiger Andrea SECA 2, 8, 17, 20 Vincent Jack focus360 296 Vogel Alexander Meyer Lustenberger 310 Vogel Bernard Endeavour Vision 200 Vogt Matthias Ciba Vision AG 333 Volkart Gregory H. Volkart Management Consultants 328 von Radowitz Konstantin Deloitte AG 196f. von Richter Andreas General Electric 138 von Salis Ulysses Niederer Kraft & Frey 333 von Tscharner Patrick J. Tscharner Capital Partners 333 Vuilleumier Jean-Pierre CTI Invest 30, 31

W Wägli Rolf EPS Value Plus AG 201, 343 Wagner Lucian EuroUS Ventures 28, 333 Walter Dominik C. BridgeLink AG 176 Walther Michael GHR Rechtsanwälte 298 Wang Pying-Huan Deutsche Bank Private Wealth Management 198 Wang Zhi Swiss China Consulting GmbH 333 Watts Michael 28 Weber Bruno Valcor AG 326 Weber Martin Schellenberg Wittmer Rechtsanwälte 320 Evangelisch-reformierten Weber-Berg Christoph 371 Landeskirche des Kantons Zürich Weibel Matthias P. FAES Finanz AG 333 Weigel Winfried 333 Wein Nikolaus Deutsche Bank Private Wealth Management 198 Wenger Christian Wenger Vieli Rechtsanwälte 7, 9, 28, 30f., 135, 141, 270 Wenger Paul André BridgeLink AG 141, 176 Wenzl Martin Wiener Börse AG 140 Wicki Andreas HBM Partners AG 212 Wierichs Gero more! than words 2 Wietlisbach Urs Partners Group 235 Willa Stéphane Migros-Genossenschafts-Bund 311 Willi Gerhard ZETRA International AG 271 Wipf Christian ALTIUM CAPITAL AG 161 Wipfli Cyrill Partners Group 235 Wipfli Martin nebag 341 Wood Bryan R. Alta Berkeley Venture Partners S.A. 160 Wunderlin Christian Institute for Financial Services Zug IFZ 39 Wurmser Michael AstonBrooks International 333 Wyss Ralph Gilde Buy Out Partners AG 206

Z Zgraggen Pius OLZ & Partners Asset and Liability Management AG 234 Zimmermann Heinz LPX GmbH 77 Zingg Karin CTI Start-up 291 Züllig Peter STB Group AG 323 Zünd Mark LODH Private Equity AG 228 Zürcher Wolfgang Wenger & Vieli Rechtsanwälte 270 Zwahlen Beat cfoXpert ag 288 Zweig Andrés F. Vaccani, Zweig & Associates 325

415