2016 Annual Review 2 introduction introduction 3
Contents 2 Introduction 4 Bridgepoint at a glance 8 What drives us 10 Locations 12 Our investments in 2016 30 Managing Partner’s overview 38 Investment and sector expertise Our aim is to deliver attractive returns to our 52 Current investments investors by investing in companies and building 54 Responsible Investing 61 Bridgepoint Charitable Trust stronger, broader-based businesses with greatly 64 Offices enhanced long-term growth potential. As a long-established, experienced and Chris Busby responsible private equity investor we help Partner, Head of investment in the UK companies and management teams by investing in expansion, operational transformation or via consolidating acquisitions. Bridgepoint funds typically take controlling stakes in well-managed companies valued up to €1 billion. We are attracted by opportunities in sectors and niches with strong underlying growth and global competitive advantage or in cash generative businesses with high visibility of earnings.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 4 Bridgepoint at a glance Bridgepoint at a glance 5
Investors by type* 3% 7% Bridgepoint has a blue chip investor base Bridgepoint comprising public and private pension 5% funds, asset managers, family offices, sovereign authorities and insurance 6% at a glance companies around the world. Non-corporate pension 4% Financial institutions and Family offices 52% Asset Manager Corporate Pension Sovereign entity Endowment and Foundation 20% Insurance Bridgepoint 3%
€12.4bn 323 Investors by location* 5% 5% assets under management add-on acquisitions made Bridgepoint has investors across the globe with over 250 investors in last 10 years from 30 countries.
Americas Europe Asia Pacific Middle East & Africa 33% €21.6bn €1bn 57% of committed capital raised to date committed to eight investments by Bridgepoint funds in 2016 €1.6bn 64 75,000 *BE V, IV and BDC III only returned to investors in 2016 Investments made in over 75,000 employees in last 10 years current portfolio
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 6 Bridgepoint at a glance Bridgepoint at a glance 7
Issa Hassan Associate, London
Portfolio growth in 2016 12% Revenue 12% EBITDA
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 8 What drives us What drives us 9 What drives us We are driven by a set of values about how we do business, underscored by our duty to invest responsibly. These are shared across our Firm and are fundamental to our professional and personal conduct. We believe they define us and help us maintain the highest levels of corporate governance and apply the highest standards of professionalism across Bridgepoint.
Performance-driven We settle for nothing less than superior performance achieved by entrepreneurship, initiative, intelligent judgement and teamwork. Thoughtful We always seek to make a difference – for investors, companies or in our duty as a responsible investor within the broader community. Straightforward We are straightforward, open professionals who act without arrogance and embrace the views of others without prejudice.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 10 locations locations 11 Frankfurt Istanbul London Luxembourg Madrid New York Paris Shanghai Stockholm Warsaw
Local ambition, global reach We have a local presence in every major European private equity market. With a network of eight European bases and offices in New York and Shanghai, we can deploy resources effectively when identifying and completing transactions as well as manage value creation in the businesses we support.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 12 Our investments in 2016 Our investments in 2016 13
Identifying value Business growth Returning proceeds “Bridgepoint and the management In 2016 we invested Fund investments Bridgepoint investments €1 billion in eight new collectively generated returned over €1.6 billion teams in which our funds are invested businesses with a total 12% and 12% year-on- of capital to investors are excited by the opportunities enterprise value of year average revenue with 13 realisations €1.9 billion EBITDA growth presented by the times.” Guy Weldon Chief Investment Officer Our investments in 2016
In 2016 our Bridgepoint Europe and Bridgepoint Development Capital funds performed strongly thanks to our team’s skill in exploiting our investment and operational resources.
With a focus on six sectors, our teams With a long-standing track record of not only have in-depth understanding acquiring sector leaders operating in of markets and extensive industrial fragmented markets, Bridgepoint worked networks and relationships, but are with management teams to transform also able to bring market knowledge these investments into platforms for to bear in accelerating growth in our consolidation and value creation. portfolio companies. Generating ‘internal growth’ through During the year we targeted sectors operational improvement was also an with strong underlying structural growth important driver of earnings growth drivers growing ahead of the broader in 2016. Bridgepoint is well resourced economy or where Europe had a global to deliver far-reaching business competitive advantage. In addition, an transformation thanks to an extensive intentional tilt towards greater diversity team that includes operational support, of trading revenue in these times of portfolio development (especially in volatility can also be detected in our China and the US) and procurement. new investment activity this year.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 14 new investments new investments 15
Revenues Employees Transaction size French dental and medical technology company €145m 800 Not disclosed Acteon
Sector Location Directors Bridgepoint Website Acteon is a leading global player in the equipment and imaging technologies Healthcare France Olivier Balouka representatives www.acteongroup.com design, manufacture and distribution of with No 1 market positions across a Marie-Laure Pochon Olivier Nemsguern dental equipment, imaging technologies number of products including ultrasonic Jean-Baptiste Salvin and consumables. instruments and intra-oral cameras. Its product portfolio includes a As healthcare spending and access complete range of dental equipment to dental care worldwide grow, so too including ultrasonics and polishers, does the market for dental equipment imaging equipment including intra-oral which historically has always shown cameras and x-ray systems, and dental resilient growth rates. There will also consumables ranging from anaesthetic be opportunities for the company to to hygiene products. Medical equipment accelerate its growth plans by targeting includes endoscopes and surgical add-on acquisitions in under-exploited equipment sold under its COMEG brand. yet highly profitable geographies and by continuing to develop market leading Its products are sold in over 50 countries technologies. and 80% of revenues are generated outside France. The group operates This investment was made by BDC, the four manufacturing facilities across Bridgepoint fund that invests in small Europe with the majority of products and mid-cap companies. assembled or manufactured in-house. The company is a global leader in dental
“A true market leader in a fragmented dental products sector acquired at a time when spending on dental care worldwide is on the increase.” Olivier Nemsguern Partner, Bridgepoint Development Capital, France
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 16 new investments new investments 17
Revenues Employees Transaction size Global provider of capital markets software for banks and asset managers $200m 700 Not disclosed Calypso
Sector Location Directors Bridgepoint Website Founded in 1997, Calypso has a global while at the same time managing Media & Technology London / San Francisco Scott Collins representatives www.calypso.com footprint with 22 offices in 19 countries margins and increased regulation, C.J. Fitzgerald David Nicault and a worldwide client base of nearly have created the need for integrated Thomas Gavin Xavier Robert 35,000 professionals at more than solutions able to reduce operating Pascal Xatart Denis Villafranca 160 financial institutions in over 60 costs, improve capital allocation and countries. Over 50% of the company’s comply with regulations; and the move employees are engaged in R&D across to outsource software requirements five global development centres. to those third party vendors with the requisite technological advantage. Calypso’s software has a reputation for ease of use, innovation and an ability Consequently, the global market for to meet increasing rigorous regulatory capital markets software is estimated at real-time data reporting and is widely over $3 billion, with long-term growth recognised as a leader in its field, potential of more than 6% per annum especially in mid-sized institutions. and Calypso’s addressable new contract Its products provide solutions for growth is even greater. trading, risk management, regulatory With Calypso’s products benchmarking reporting, controlling and accounting as the best technology available in within capital markets, investment its segment, the company is well management, clearing and liquidity positioned to gain market share from management functions. the replacement of legacy systems in The company operates in a market with institutions as they outsource and from favourable trends: constant pressure its existing client base as the company on financial institutions to improve risk introduces new products. management and return on capital,
“There is constant pressure on financial institutions to improve risk management and return on capital. Calypso has been at the forefront of addressing this growing demand with a single, integrated platform that is acknowledged as both reliable and scalable across asset classes.” Xavier Robert Partner, Head of Bridgepoint’s investments in the Media & Technology sector
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 18 new investments new investments 19
Revenues Employees Transaction size Online travel agent specialising in cruise holidays £128m 225 £52m Cruise.co.uk
Sector Location Directors Bridgepoint Website Cruise.co.uk is a market-leading online rates from its clients. Growth is further Consumer United Kingdom Steve Bacon representatives www.cruise.co.uk travel agent in the UK specialising underpinned by increased demand from James Bilefield Henrik Nordman in cruise holidays via a website that an ageing population and increasing Seamus Conlon Adrian Willetts attracts 17 million visitors annually. supply from new ships entering service. Faisal Galaria Cruise.co.uk has a unique model based Future growth will also be driven by the around attracting visitors to its content- fundamental structural shift in the travel rich website which functions both as a sector away from traditional high street research portal and initial gateway into travel agents towards online booking, as the booking process. The website is used evidenced by compound growth of 20% to collect data on the customer which is seen in the online channel since 2012. then passed to an agent who provides This investment was made by BDC, the tailored, expert advice to the customer Bridgepoint fund that invests in small and completes the booking process. and mid-cap companies. The company consistently wins market share from smaller online providers and high street travel agents, as well as the cruise operators’ own websites and enjoys market-leading repeat booking
“The company has grown impressively and we will seek to maintain and enhance its trusted expert reputation as we work with management to accelerate business growth through acquisitions and drive further value through digital and marketing expertise.” Adrian Willetts Partner, Bridgepoint Development Capital
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Revenues Employees Transaction size Childrens’ residential activity centres £32m 870 Not disclosed Inspiring Learning
Sector Location Directors Bridgepoint Website Inspiring Learning is a provider of out government funding is also available Business Services United Kingdom Jason Andrews representatives www.inspiring-learning.com of classroom learning for primary and to ensure the trips are inclusive and John Bentley Robin Lawson secondary school children in the UK. available to all pupils. Martin Robinson Alan Payne Operating 10 residential activity centres Inspiring Learning is the second largest with over 4,000 beds principally in provider in its fragmented private the North, East and South East of the market and is an excellent platform UK, the company has been providing from which to pursue consolidation as educational residential courses for smaller competitors struggle to match schoolchildren for over 30 years. It the range and quality of facilities which also offers the residential element of can be offered by a well capitalised the government’s National Citizenship national provider. Service aimed at 15-17 year olds and through its Camp Beaumont Day The UK privately-provided RAC market is Centres provides non-residential multi- forecasting strong annual growth over the day camps in London and the Home next five years driven by increasing pupil Counties during the school holidays. numbers, supportive government policy and a switch in the provision of RACs from In the UK, Residential Activity Centres legacy Local Authority operators, who enjoy strong support and robust are withdrawing from the market, to well demand from teachers, parents and invested private providers. pupils as a fun, educational activity, with 95% of all UK schools organising at This investment was made by BDC, the least one expedition a year. Expeditions Bridgepoint fund that invests in small are typically booked by teachers and mid-cap companies. but paid for by parents. Ring-fenced
“Inspiring Learning is capable of growing both organically and by acquisition thanks to its strong capital base and a recognised ability to provide the volume and variety of out of classroom learning experiences required by schools nationally.” Robin Lawson director, Bridgepoint Development Capital
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Revenues Employees Transaction size Branded dried fruit and snacks business TRY353m 406 Not disclosed Peyman
Sector Location Director Bridgepoint Website Peyman is the second largest producer It also exports to more than 30 Consumer Turkey Tuncer Akgun representatives www.peyman.com.tr of packaged dried fruit, nuts and seeds countries, primarily in the Middle East, Hakan Barslan in Turkey, a rapidly evolving segment the Balkans and Central Asia. Martin Dunn of the country’s broader fast-moving The packaged dried fruits and nuts consumer goods sector. market in Turkey is valued at €2.2bn Established in 1995, the company and is one of the highest growth sub- initially operated as a wholesaler segments of the Turkish consumer but in 2001 it began selling its own goods sector. branded products. In the last eight This is driven by increasing demand years it has transformed from being a for hygienic, healthy, convenient and regional operator to become a national consistently high quality snacks as brand name and the second largest evidenced in the shift from unpackaged player within its sector. It has around to packaged snacks consumption. 50 products, split across four main, distinctively branded ranges: Dorleo, Over the next five years Peyman will Bahceden, Citliyo and Nutzz. focus on increasing production output, winning market share, significantly Peyman’s products are sold via expanding the number of outlets where traditional convenience stores, it sells its products and developing known as ‘bakkals’, with products adjacent snack offerings to further reaching around 45,000 outlets accelerate growth. throughout Turkey via more than 6,000 supermarket retailers, including the market-leader Migros.
“With fresh capital and additional consumer expertise, Peyman is capable of transforming into a larger and broader snack brand.” Martin Dunn Partner, Bridgepoint
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Revenues Employees Transaction size Agricultural crop protection and nutrition business €237m 945 €456m Sapec Agro
Sector Location Directors Bridgepoint Website Sapec Agro is an innovative agricultural R&D capabilities (which reformulates Manufacturing & Spain / Portugal Eric van Innis representative www.sapecagrobusiness.com business that develops and sells existing active ingredients to adapt and Industrials Nuno Loureiro Héctor Pérez nutrition and crop protection products register new products for use with high to help farmers maximise crop yields. value crops) as well as its expertise in the complex regulatory environment. Headquartered in Portugal, Sapec Agro was a primary buyout from a family- The crop protection and nutrition sector controlled business. It has offices in 23 has grown over the last 15 years through countries worldwide, four manufacturing economic cycles, with future growth sites and has sales in over 70 countries. underpinned by a rising population The business focuses on two areas: crop and increasing demand for food. The protection to control weeds, insects, business enjoys one of the largest and disease via a range of herbicides, registered portfolios in Europe. insecticides and fungicides; and In the next five years Sapec Agro will nutrition, which provides specialty crop continue to reformulate and develop nutrition to increase plants’ resilience existing and new products as well as and growth rates. expand geographically into new markets. With its specialist focus on high value It is also expected to contribute to the agricultural activities such as greenhouse consolidation of its sector. grown fruits and vegetables, vine and olive production, the company is a market leader in Spain and Portugal and is a growing presence in France, Italy, Mexico and Brazil. It is renowned for its
“An opportunity to use its leading-edge R&D and expertise in the complex regulatory agro environment to drive further revenue growth, enter new territories, launch new customised products and explore consolidation.” Héctor Pérez Partner, Bridgepoint, Spain
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 26 new investments new investments 27
Revenues Employees Transaction size Children’s apparel and toys retailer PLN1.6bn 2,681 €247m Smyk
Sector Location Directors Bridgepoint Website Smyk is the leading retailer of children’s In Poland the company operates in Consumer Poland Michał Grom representatives www.smyk.com apparel, toys and accessories in Poland the fastest growing major economy in Marek Janeczko Vince Gwilliam with a developing presence in the wider Europe and benefits from good market Mark Rollmann Khai Tan CEE region and a reputation for its growth as the region’s average spend Xavier Thiry Maciej Zuzałek superior quality, range and service levels. per child moves towards that more often seen in Western Europe and the USA. Founded in 1952 as a single, iconic This is a trend that the company is Warsaw store, it has more recently responding to with a fast growing digital expanded to 130 stores across Poland presence as well as more conventional and, since 2006, entered Germany, store openings in its key markets – Romania, Ukraine and Russia on a supported by the consumer’s preference smaller scale. for local brands providing superior value. The company leads the market in As the leading children’s retailer in the both apparel and toys ahead of its region, Smyk is also looking to ways to more global competitors, thanks do business better and for additional to a combined offer of recognised future growth – internationally but also international brands and own-label from the additional potential offered by goods that are sold in own stores and targeted acquisitions, thereby ensuring via franchising and in-store concessions that its heritage and reputation are outside its home territory. Smyk safeguarded for generations of children also sells a range of accessories and to come. durables for the childcare market such as car seats, baby carriages and beds.
“A strong foundation for progress based on a brand that is iconic and well-known for its superior quality, range and leading service levels.” Khai Tan Partner, Bridgepoint, Poland
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 28 new investments new investments 29
Revenues Employees Transaction size Functional drinks business SEK468m 80 Not disclosed Vitamin Well
Sector Location Directors Bridgepoint Website Vitamin Well is a functional drinks Nordic region and Europe generally Consumer Sweden Jonas Pettersson representatives www.vitaminwell.com business that develops, manufactures as levels of consumption catch up Martin Randel Johan Dahlfors and markets a portfolio of vitamin- with those in the more developed US Magnus Gottås enriched sports and energy drinks in the market. This will be further enhanced by Johan Gustafsson Nordic region where it enjoys market longer-term macro trends of health and leadership and high consumer brand wellness, and consumers’ increasing awareness. The company’s portfolio preferences for natural products. currently consists of four brands: Vitamin Vitamin Well plans continued growth Well, Nocco, VW+ and Nobe. in its native Nordic region, as well as The company has in-house product an acceleration and broadening of its development, sales and marketing teams international expansion, complemented in Sweden and sells via a network of with further product innovation and distributors in international markets. The targeted acquisitions. business also has a fast-growing export This investment was made by BDC, the business with almost half its revenues Bridgepoint fund that invests in small now derived from 27 countries outside and mid-cap companies. of Sweden, including from Germany, the Netherlands and Spain. The functional drinks segment is forecast to grow significantly in the
“Consumers increasingly seek healthier alternatives to carbonated soft drinks and Vitamin Well’s products cater to this growing demand.” Johan Dahlfors Partner, Bridgepoint Development Capital, Nordic region
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 30 Managing Partner’s overview Managing Partner’s overview 31
“A notable feature of several of the newer assets is the international nature of their A message from our revenue base reflecting an intentional tilt towards greater diversity of trading revenue in Managing Partner these times of volatility.”
2016 will undoubtedly go down as a acquisitions as they pursued consolidation pivotal moment in Europe’s relations with strategies to build scale and improve its member countries and the rest of the competitive position. New investment world. The surprise vote in favour of Brexit activity was also matched by strong in the UK in June 2016 has had an impact divestments with some €1.6 billion returned on corporate and political Europe in ways to our investors in 2016. that are yet to unravel. Looking back at the By the end of the year, Bridgepoint Europe last 12 months, I am struck by one thing in V, the €4 billion middle market buyout fund particular: the unpredictability of events. we raised in 2015, had committed 56% of its In reviewing our own performance in 2016, primary capital to 10 platform assets, in line I am pleased to report that our Bridgepoint with or ahead of plan. A notable feature of Europe and Bridgepoint Development several of the newer assets is the international Capital funds performed strongly, thanks nature of their revenue base reflecting an to our team’s skill in investing, managing intentional tilt towards greater diversity of and selling businesses well, in far from trading revenue in these times of volatility. usual circumstances. This theme is also reflected in the diversity of currency in which each asset is held. During the year we invested €1 billion in The middle market in Europe has become eight new companies with a total enterprise increasingly global with the Fund’s largest value of €1.9 billion. Bridgepoint-backed currency exposure now the US Dollar. businesses also completed 56 add-on
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 32 Managing Partner’s overview Managing Partner’s overview 3378
In this regard, following the model successfully As the reality of Brexit comes nearer, and Frédéric Pescatori Partner, Head of investment in France “We will continue to limit exposure executed in Shanghai, we opened an office uncertainty rises, in 2017 we expect corporate in New York in 2016 that supports due investment and employment decisions to slow to purely domestic UK business diligence, revenue development and add-on with a potential dampening effect on the UK preferring instead UK exporting acquisitions for the Fund’s European assets economy showing through. in the third largest market by revenue for the companies… as a result, we believe With QE remaining central banks’ primary Bridgepoint portfolio. defence against unpredictability and volatility, that our funds are better insulated Bridgepoint Development Capital, our lower two notable benefits from an investment from the negative potential mid-market buyout and growth capital business, perspective have emerged: supporting asset reached two milestones: it made its 14th and prices and fuelling debt markets. Although consequences of Brexit.” final platform investment from BDC II, its €350 helpful when selling companies, it meant million fund; and significantly, it successfully that acquiring assets required even smarter raised its successor fund, BDC III, exceeding origination, greater clarity of investment case its target of £500 million to close on its hard as well as pricing discipline. And for businesses cap of £600 million. It’s a great result that already part of the Bridgepoint family, it allowed positions the BDC business well for the next us to ensure that the better margins and three to four years, that saw it attract significant covenant terms available in the favourable debt commitments from a number of longstanding markets were used appropriately to optimise investors in previous Bridgepoint funds. their financial structures.
The environment for investing Portfolio performance As 2016 drew to a close, to the surprise of many In 2016 Bridgepoint’s funds’ investments commentators, relatively positive external collectively generated 12% and 12% year-on- market conditions in Europe continued and in year average revenue and EBITDA growth. particular, the UK economy was surprisingly This is real demonstration of our portfolio robust. However, we shouldn’t be fooled by this: companies’ continuing resilience and skill in it represented something of a “phoney war”. driving long-term value creation in what, in
Portfolio performance
14% 12% 12% 12% 11% 9%
2014 2015 2016 2014 2015 2016
Revenue growth EBITDA growth
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 34 Managing Partner’s overview Managing Partner’s overview 35
Capital returned to investors Europe in any case, remains a relatively to investors with 13 exits, including the €1.8 low-growth and uncertain market. billion sale of French property management services group Foncia, the £835 million sale This is reflected in the level of add-on of Oasis Dental Care to Bupa in the UK, and 2013 acquisition activity across our funds. five exits at BDC including those in Sweden Transactions totalling €8.6 billion have been of specialist care services supplier to the high €1.2bn completed to date by Bridgepoint Europe IV acuity autism segments Solhaga and transport with significant acquisitions by Wiggle (of Chain 2014 management software provider Memnon Reaction Cycles) in the UK and Groupe Thom Networks, and in the UK of Beck & Pollitzer, €2.0bn in France (of the 38 store Oro Vivo chain in the engineering services company. Germany and of 370 stores of Stroili in Italy) as 2015 well as smaller in-fill transactions at Moneycorp Bridgepoint’s Capital Markets team also €1.8bn and Oasis. Bridgepoint Europe V also completed took advantage of buoyant conditions in the important in-fill acquisition activity at Azzurri, European leveraged loans market to arrange 2016 Balt and Element Materials Technology. debt totalling €2.5 billion, allowing us to secure more borrower-friendly and flexible terms in the Returning capital to investors €1.6bn financial structures of the companies our funds All private equity funds are judged by their own whilst enabling us to return €1.6 billion of ability to drive IRR and capital returns while capital to investors. actively investing in longer-term growth and value creation across their portfolios People and Talent to maximise value. In 2016 Bridgepoint In 2016 we welcomed 34 new team members investments returned €1.6 billion of capital across Europe and recognised in particular the
“Acquiring assets Gwenaëlle Le Ho Daguzan Edward Woods Director, Paris required even Partner, London Amaury Blanloeil Senior Associate, Bridgepoint smarter origination, Development Capital, Paris greater clarity of investment case as well as pricing discipline.”
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 36 Managing Partner’s overview Managing Partner’s overview 37
contribution of two colleagues who opportunities arising from Brexit- were promoted to the partnership, related dislocation across Europe. Aaron Collins Emma Watford and Edward Woods. Associate, London All of this translates into three very Christopher Brackmann Our ability to develop our own clear objectives for the year ahead: Director, Frankfurt people and attract new colleagues for our flagship Bridgepoint Europe remains critical to our success and funds, it’s about high quality we are fortunate in the breadth and origination, pricing discipline and depth of talent we can call upon driving portfolio performance from our team. People who work harder whilst for our lower middle at Bridgepoint have many things market business BDC, similarly, it’s in common but above all else is an about driving portfolio company absolute determination to build performance and making a great successful businesses. It is in this start to the investment period for spirit of wishing to succeed and its newly raised BDC III fund. evolve successfully that we have For wider Bridgepoint more introduced a number of initiatives generally, it’s about assessing what such as team surveys and diversity makes most sense strategically and inclusion programmes across for the future development of our the Firm to ensure that we do so. business and what will have the 2017: looking ahead most enduring positive impact on As the reality of Brexit approaches our Firm. and political changes within These times are not without the Eurozone take shape, we risk. External factors create expect corporate investment and big challenges for us and the employment decisions to become businesses we own. Yet the more challenging. ambition of colleagues across This said, our funds invest across Europe, China and the US remains the whole of Europe and we have undiminished. It’s also very deliberately been careful in our encouraging that the management portfolio construction. So, for teams of the companies in which example, we will continue to limit our funds are invested are similarly exposure to purely domestic excited by the opportunities UK business preferring instead presented by the times. I thank UK exporting companies likely them and our own teams for to benefit from a post-Brexit their hard work and dedication weakness of Sterling. As a in the last 12 months and remain result, as we enter 2017, we confident that their efforts in 2017 believe that our funds are better will be similarly rewarding. insulated from the negative potential consequences of Brexit, whilst being positioned to take William Jackson advantage of new investment Managing Partner
“These times are not without risk. External factors create big challenges for us and the businesses we own.”
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 38 Investment and sector expertise Investment and sector expertise 39
What we like to invest in Funding and resources In addition, Bridgepoint’s We are attracted by opportunities Bridgepoint is currently investing operations in Shanghai and New by market leading growth two funds with distinct but York ensure that we are able to companies with ‘buy and build’ complementary strategies: accelerate the development of and operational improvement Bridgepoint Europe V, a €4 billion portfolio companies in these potential and in businesses fund which is focused on investing markets, leading due diligence that focus on sectors where in market leading businesses that on the operations of proposed Investment and Europe has global competitive are typically valued between €200 new European platform assets advantages or where we can million to €1 billion; and BDC III, a and identifying, reviewing and exploit expansion potential as £600 million fund managed by our executing add-on acquisitions, much outside as in Europe. This is lower middle market and growth accelerating value creation via typically reflected in companies capital fund, focused on high growth revenue development initiatives sector expertise trading ahead of the broader companies valued up to €150m. and operational improvement in economy or in businesses with respective markets and, supporting Our investment teams are also able high visibility of earnings and exit processes with potential to call upon expertise from a range contracted income. Chinese or US acquirers. Our aim is to invest in high-performing, Investments by sector of specialists whose skills include Bridgepoint is especially known operational expertise to improve market-leading, well-managed businesses €957m Business Services for helping to create value business performance, growth through market consolidation by prospects and market position that have the potential to grow through €1.86bn Consumer “…especially known identifying and arranging funding and an in-house Capital Markets expansion, operational transformation or €376m Financial Services for add-on acquisitions for team specialising in debt finance for helping create via acquisition. €694m Healthcare platform investments operating in structuring. Bridgepoint also value through market €675m Manufacturing & Industrials fragmented sectors or securing pioneered the development of in- operational improvement to house procurement expertise using consolidation and We focus on six core sectors: Business €949m Media & Technology drive earnings growth. In 2016, the latest technology to drive best arranging funding for Services, Consumer, Financial Services, Bridgepoint portfolio businesses procurement practice and achieve made 56 add-on acquisitions. significant cost reductions. add-on acquisitions.” Healthcare, Manufacturing & Industrials 17% 17% and Media & Technology. Each sector team is organised on a pan-European 12% Denis Villafranca basis but with a global outlook, with teams Partner, Paris Marion Combette working across offices and continents Associate, Paris to build knowledge and ensure proper 13% 34% understanding of the dynamics of the 7% space as well as to identify new and add- on investments. As a result, we have been able to identify and acquire businesses where significant value can be created under our ownership and where in turn businesses are able to exploit our reach and know- how to enhance their operational performance, growth prospects and market position.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 40 sector expertise: Business Services sector expertise: Business Services 41
Our interest in business services companies can be sub-divided Investment and portfolio into professional services and asset and facility services. Within performance this, we are attracted to international businesses in fragmented markets with defensive characteristics. We also consider route- Business based assets, where a company’s market positioning leads to 2016 was a strong year for our business both defensibility and growth. services team across both Bridgepoint In terms of thematic trends, we are attracted to service Europe and Bridgepoint Development business that can help companies respond to ever-tightening Capital, with exits in the UK including Services regulation and compliance, particularly in sectors with a industrial services business Beck significant safety or environmental risk exposure. This theme & Pollitzer and outsourced drug led to our investment, at the end of 2015, in testing specialist development services provider Quotient A focus on defensible, high quality, growth Element Materials Technology. Clinical, and in France, property companies that can lead industry consolidation Technical consulting also continues to be of interest, following management business Foncia and staffing and expand internationally helps us to drive value successful past investments in companies such as ERM, an and recruitment company Penelope. environmental consultancy. We’re particularly interested in In terms of new investments, Element within business service sub-sectors. Meanwhile, larger firms that can access expertise without being overly Materials Technology is an excellent reliant on a small number of specialists. we are closely monitoring opportunities in cyclical example of a highly defensible, industries such as the oilfield services segment. We believe that tech-enabled outsourcing is the next phase of international growth proposition. the outsourcing trend for professional services businesses, as The company operates in the global these firms realise that carving out back-offices and process outsourced materials testing market, with divisions to other providers simply transfers people rather than laboratories across the US and Europe. translating into meaningful efficiency savings. During the year, we also invested in Emma Watford Head of Business Services sector In cyclical industries, timing can be key, and we are particularly Inspiring Learning, which operates in the cognisant of the oil price at present. Following volatility and very attractive niche of residential activity pressure on the oil price this year, we anticipate a gradual centres and school trips. recovery over the medium term, given production decline forecasts and high production costs as reserves deplete. This Prices remain competitive for many should provide opportunistic investment opportunities. of the sub-sectors that Bridgepoint specialises in, and so we expect buy-and- build to remain an important driver of value for investments in this sector over the coming years. €1.6bn Invested in 15 deals in the Business Services sector in the last 10 years
of our portfolio is currently % invested in the Business 17 Services sector
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 42 sector expertise: Consumer sector expertise: Consumer 43
Deal activity in the consumer sector was particularly buoyant Investment and portfolio during 2015-2016, with Bridgepoint successfully completing performance six of the c.60 private equity consumer investments in our size range in Europe. Our experience in the sector has enabled Consumer us to identify areas of potential ‘above trend’ growth that are In 2016 Bridgepoint invested in four new perhaps counterintuitively at odds with the overall consumer consumer investments: Cruise.co.uk, The consumer sector is a major part of Bridgepoint’s environment across the region. Peyman, Vitamin Well and Deliveroo, DNA. In 2016 we made a number of investments In 2016 slow GDP growth masked significant changes in habits, reflecting our investment themes. preferences and technologies that will underpin the major Consumer spending and confidence reflecting both the target sub-sectors and growth consumer success stories of tomorrow. also held up well across our consumer profile we’re interested in – especially in businesses Health and wellness continue to be major consumer sector portfolio companies, with little highly attuned to technological shifts affecting preferences as well as government priorities and we are discernible impact from Brexit during committing to it with investments such as Turkish dried fruit, 2016, as reflected in the consistently consumer behaviour patterns. nuts and seeds company Peyman and Vitamin Well, a Nordic positive like-for-like sales at Pret A functional drinks business. Peyman generated impressive Manger and the Azzurri restaurant growth during 2016, driven in part by a government ban on chains in the UK, as well as in France unhealthy snack food types in schools nationwide. A similar and Italy, enhancing the progress of health trend in the UK can be detected in Bridgepoint Europe Histoire d’Or during the year. V’s investment in the Zizzi chain of restaurants which now sells over 3,600 vegan pizzas every week, following their introduction earlier that year. In Poland, biscuit manufacturer Dr Gerard was the first local biscuit maker to completely remove Jason McGibbon trans-fats from its products. Head of Consumer sector Acceleration of consumer tech trends is leading to increasing experiential and leisure spend, a trend that we had identified when making investments in the Nordic Cinema Group and in restaurant chains. We are also conscious of the normalising effect of rapid technological change that will have a profound impact on consumer business models. Yesterday’s disruptive technologies are tomorrow’s incumbents and it seems tomorrow is already here for millennials who habitually adopt the latest consumer internet innovations. This means consumer services relating to online, networks and geo-location technologies quickly become mainstream and so provide investment opportunities. We also see a major opportunity to strip out the least satisfying elements of the consumer experience, such as waiting to pay or queuing to sit. The efficiency of transaction will become an important differentiator and those businesses that can provide a seamless experience, without sacrificing personal service, stand to benefit. Witness sandwich chain Pret A Manger which €2.1bn is increasingly catering to busy, on-the-move consumers who Invested in 16 deals in the Consumer want the same consumer quality and choice even at functional sector in the last 10 years locations and transport hubs. We are also seeing many more consumer brands following their customers internationally. Today, consumer sector business of our portfolio is currently plans frequently feature internationalisation targets; this plays % invested in the Consumer well into Bridgepoint’s own strengths. For instance, during 34 sector 2016, our French jewellery chain, Histoire d’Or acquired an Italian rival Stroili Oro and German Oro Novo. Indeed virtually all of our consumer portfolio now works with Bridgepoint’s network across Europe, the United States and in China.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 44 sector expertise: Financial Services sector expertise: Financial Services 45
We divide our financial services coverage into ‘technology’ Investment and portfolio and ‘services’. Both aspects present exciting business performance propositions at this point. During 2016 we established a dedicated effort around Financial Our investment in Calypso is a good financial technology. ‘Fintech’ became a major buzzword example of how we use our financial in 2016, the year that technology permeated virtually all aspects of consumer transactions, most conspicuously with services experience with other in-house contactless payment, via card and mobile phone, and feeding expertise, in this case our Media & Services into different habits and expectations of ease, convenience Technology capabilities. The company, and an ability to transact whenever and wherever. which is a global leader in capital markets technology, was acquired on a proprietary Institution-focused fintech also represents a major Financial services are in flux, as new technologies basis from its founders. opportunity. Amid a sustained period of low or even negative collide with regulation and challenging monetary rates of interest, financial institutions – particularly banks and In November, we sold 1st Credit, a debt conditions. For investors experienced in the insurers – are looking hard at the profitability of their core purchaser, in a £130 million trade sale. activities, so that speed of process and cost reduction have Our other financial services investments sector, this spells great opportunity in both become major strategic priorities. On top of this, regulatory continue to perform well, in spite – scrutiny demands ever more sophistication in terms of fintech and for services businesses. and sometimes because of – wider information tracking and disclosure across multiple business market volatility. lines, further driving demand for customised automation. Unlike the traditional financial services sector, which is predicated upon layers of trans-national and national regulation, fintech is highly scalable across borders and William Paul therefore fits well with Bridgepoint’s international coverage. In Head of Financial Services sector addition, the fintech and financial software market in Europe is highly fragmented and offers opportunity for consolidation. On the flip side, fintech is attracting high levels of capital given the ‘hype’ in the sector. However, we believe there are compelling and enduring fundamental drivers that we are well placed to exploit through our network and experience with existing fintech investments such as alternative assets software provider eFront, and Calypso, a market leader in capital markets technology. The services segment is subject to longer-term shifts and is no less interesting for it. The entire insurance vertical interests us, as insurers focus more on their core business processes. We expect opportunities in areas such as broking, compliance and claims management, as well as new business models around capital deployment. Asset and wealth management stands to benefit from ageing €520m populations as well as regulatory changes such as the Retail Invested in four deals in the Financial Distribution Review in the UK. As the market polarises towards Services sector in the last 10 years quality players, Bridgepoint is leveraging its experience with past investments in firms such as Tilney and Quilter Cheviot to invest in larger consulting firms with a specialist product and of our portfolio is currently an opportunity for international expansion and consolidation. % invested in the Financial In the lending vacuum left by the banks, there is opportunity 7 Services sector for niche lenders and we also see technology-driven, quality and scalable firms focused on prime customers as an attractive segment.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 46 sector expertise: healthcare sector expertise: healthcare 47
We divide our Healthcare coverage into services, medtech, Investment and portfolio and pharmaceuticals. 2016 was a busy year for M&A across performance these sub-sectors, including some notable ‘big pharma’ transactions. We have exploited prevailing high valuations Healthcare with a number of successful sales, while rebalancing our In line with our refocusing towards global portfolio towards more global healthcare markets. markets, in late 2015 Bridgepoint Europe V Sophisticated patients, innovation, and a rapidly Macro growth drivers in the healthcare market are well acquired Paris-based Balt, a global transforming pharmaceutical value chain are driving rehearsed – ageing populations, innovation and the need business that designs and manufactures to achieve scale. Meanwhile, with 85% of the European stents, catheters and other interventional growth, while high valuations made 2016 a good year market directly or indirectly publicly funded, there is funding neuroradiology devices. pressure as mature markets are unable to increase allocations to realise assets. 2016 was a busy year for M&A across During 2016, we exploited favourable to match underlying growth demand. our three sub-sectors of interest: services, medtech valuations in the sector, with the sale of Beneath those headlines, we see interesting opportunities. Oasis Dental Care to BUPA for £835 million and pharmaceuticals. The demographic time bomb, long-trailed, is now actually following a nation-wide roll-up of dental happening as baby-boomers move into their 70s. But unlike practices and significant investment in the generation before them, they are very well informed marketing and clinical infrastructure, and and sophisticated buyers of healthcare, with respect to the exit of MédiPôle Partenaires in France. available treatments. Looking ahead to 2017, we will continue to Demand for high quality care from this educated consumer base creates the opportunity for differentiated healthcare rebalance our portfolio in favour of medtech businesses that are able to tap into the 15% of the market that and pharma. We will consider further is privately funded – a trend that has benefited both Oasis opportunities to support appropriate care Jamie Wyatt Healthcare and Care UK. for the elderly. Head of Healthcare sector In recent years, we have continued to rebalance our In this regard, when assessing new portfolio from predominantly single country services, prospects, we assess the quality of a service towards more exposure to the global healthcare markets first. Only then do we look at the business of medtech and pharma. model. We consider this the correct The pharma sector began reconfiguring its business models approach both from an ethical and business 30 years ago and that trend continues to create huge perspective, given the highly regulated ‘niches’ such as outsourced clinical research (a $30 billion nature of the market, and a growing market) and contract manufacturing (up to $60 billion). This prevalence of independent quality reviews, has thrown up huge opportunity for growth businesses. scoring systems and the competitive In addition, recent years have seen an IPO boom in the advantage of favourable ratings from the US biotech sector, providing a war chest to fund biotech recipients of care. research. Outsourced providers of such services are seeking to consolidate in order to reap quality and cost benefits in their service of global pharma companies. Medical device technology is also a global market, driven by an increasing pace of innovation. Technology that can, for example, improve the way that medical procedures are €1.4bn conducted, while reducing risk to the patient, can be quickly Invested in 12 deals in the Healthcare scaled and rolled-out globally, resulting in an outsized impact sector in the last 10 years on lives saved and improved.
of our portfolio is currently % invested in the Healthcare 13 sector
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 48 sector expertise: Manufacturing & Industrials sector expertise: Manufacturing & Industrials 49
This thematic approach to the manufacturing and industrials Investment and portfolio sector helps us to uncover businesses that stand to gain performance disproportionately from major shifts in global demographics, consumer behaviour and technology. Manufacturing Recent years have seen Bridgepoint sell All things being equal, the prevailing low growth in Europe a number of industrial and manufacturing and recession in many major emerging markets during 2016 should temper return expectations. But all things are businesses to achieve outstanding returns not equal – the emergence of an extra billion consumers for our investors, such as the sales of & Industrials has created anomalies and pockets of hyper-growth. The speciality chemicals company CABB rise of an emerging market middle class, long predicted, and SPTS, an equipment provider to is now a reality. As economies such as Brazil, Nigeria and chipmakers. Europe is full of remarkable manufacturing and industrial Russia emerge from recession, and stronger growth in China At the end of 2016 we completed companies. It is also a sector that is being transformed resumes, this theme will return ever more strongly in the years ahead. Many countries in South East Asia and the sub- one of Iberia’s largest private equity by technology and buoyed by emerging market continent are just at the start of this journey. transactions, with the €456 million acquisition of a Portuguese agro- demographics. We invest in differentiated businesses The manufacturing buzzword of 2016 was ‘robot’, and with chemicals company from Sapec Group. good reason. Long-trailed by science fiction, automation with robust technology and good growth prospects The company’s crop protection and technology has precipitated a seismic shift in the nutrition products help farmers to that will benefit from our international network. manufacturing sector, driven by recent leaps in computer speed combined with the networking possibilities of the maximize their yield, increasing their internet. As inanimate objects go online, demand for new efficiency while catering to the growth industrial products will experience a renaissance. On the of consumers and consumption. The business has highly defensible product- Chris Bell back of these advances, an industrial innovation ‘push’ in Head of Manufacturing & Industrials sector manufacturing techniques that began in the automotive specific formulations for specific crops. industry is now being extensively exploited across the While the macro outlook is less certain economy, from supermarkets to oil refiners. Meanwhile, with labour costs in Europe and China on the rise, in terms of GDP growth and global trade, automation is seen as the only way to increase economic we remain confident that our thesis-led and productivity growth. approach to the sector will continue to enable us to find unique angles and We also see a growing societal preference for resource improvement strategies for Europe’s efficiency feeding into the industrials and manufacturing best growth companies. sector. This is the hypothetical ‘ESG opportunity’ of corporate reporting becoming reality, as businesses demand efficiency and a cultural shift among consumers makes a virtue of thrift. Bridgepoint Europe IV’s investment in Austria-based AHT Cooling Systems is a case in point. The company makes large refrigerators for supermarkets such as Aldi and Lidl, which are simple to install, maintain and move, and highly cost-effective. The company has delivered more than a million fridges, excellent growth prospects and first-class €1.2bn customer service. This plays into a sub-trend in the sector: Invested in eight deals in the product and service convergence. AHT’s customers demand Manufacturing & Industrials not just excellent fridges but a dependable, fast service that keeps downtime to an absolute minimum. sector in the last 10 years
of our portfolio is currently % invested in the Manufacturing 12 & Industrials sector
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 50 sector expertise: Media & Technology sector expertise: Media & Technology 51
Tech touches everything. As such, the mutual benefit of Investment and portfolio collaboration between our technology expertise and other performance Bridgepoint sectors is becoming ever more fruitful. Fintech is a case in point. Our acquisition of capital markets Media & Our technology portfolio, which cuts software provider Calypso in 2016, was off-market. Our across many other sectors, has the financial services expertise meant we understood the pressures faced by Calypso’s client base. Relieving those potential to outperform non-tech driven pressures is a function of efficiency and technology. So, in this business models, given scalability and Technology sense, Calypso’s clients, investment banks, are technology the current pace of innovation and businesses. The combination of the two – financial services disruptive change. and tech expertise – made us very relevant to the sellers and Meanwhile our existing media businesses Technology has become a cross-sector enabler. allowed us to acquire the company off-market. Highly unusual continue to perform impressively. Dorna for a company of its size. Software companies, especially when vertically SBK, the sports business with exclusive focused, can offer not only double-digit growth Meanwhile, software focused on industry verticals is the rights to promote and manage MotoGP, perfect business model for an investor such Bridgepoint, as continues to enjoy strong growth in a and high margins, but also defensive characteristics. it is both highly scalable and defensible, given the specialist booming market for sports TV rights knowledge required. Meanwhile, media continues to be a strongly and sponsorship. performing sector for us. We tend to focus more on the corporate rather than consumer tech markets, with a preference for enterprise software, subscription-based models and companies with rich proprietary data sources. However, if a company can dominate its vertical, we consider B2C, as is the case with our investment Xavier Robert in Wiggle, an online bicycle accessories store. Head of Media & Technology sector Our track record in the media sector has been strong and our interest remains undiminished. In mid-2015 we invested in the Nordic Cinema Group, with the conviction that fears around home cinema technology damaging the market were overdone. We continued to invest in the company’s expansion of sites and in best practice efficiencies and digitisation. This resulted in the company being successfully sold to AMC, the largest cinema group in the world, two years after our original investment. As the pace of innovation increases, we deliberately scan the sector for major disruptors, in the belief that if you look at a threat long enough, it becomes an opportunity. We believe virtual reality technology could be a game-changer across multiple media industries (not just video gaming) and we are closely monitoring its development and impact. Artificial intelligence is finally coming of age and will have profound impact across all sectors. To take just one example, the anticipated advent of autonomous cars at some point €1.5bn in the coming years will be transformative not just for Invested in nine deals in the Media & transportation, but habits, lifestyles and a wide range of Technology sector in the last 10 years service industries. Block-chain technology is our third horizon technology. Again, while its immediate application is likely to be in financial of our portfolio is currently services, the potential of a technology that can record an % invested in the Media & event transparently yet completely securely will have untold 17 Technology sector ramifications across sectors.
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 52 current investments current investments 53
Current investments
Portfolio company Date acquired Transaction size Revenues Fund Portfolio company Date acquired Transaction size Revenues Fund
Business A-Katsastus Group 2006 Not disclosed €111m BE II Healthcare Acteon* 2016 Not disclosed €145m BDC II Services Anaveo* 2015 Not disclosed €47m BDC II Balt 2015 Not disclosed €68m BE V
Cambridge Education Group 2013 £185m £120m BE IV Care UK 2010 £414m £620m BE IV
Element Materials Technology 2016 Not disclosed $310m BE V Compagnie Stéphanoise de Santé (C2S)* 2011 Not disclosed €175m BDC I
Inspiring Learning* 2016 Not disclosed £32m BDC II Diaverum 2007 Not disclosed €617m BE III
Inspired Thinking Group* 2014 £28m £90m BDC II
KGH Customs Services* 2013 Not disclosed SEK608m BDC I/II Financial Estera 2015 Not disclosed $82m BE V Services Leeds Bradford Airport 2007 £145m £32m BE III Moneycorp 2014 £212m £137m BE IV
LOC Group* 2013 Not disclosed £60m BDC II
TüvTurk 2009 TRY347m TRY133m BE IV Manufacturing AHT Cooling Systems 2013 Not disclosed €399m BE IV & Industrials DMC Power 2007 Not disclosed $28m BE III
Consumer Azzurri 2015 £250m £245m BE V Flexitallic 2013 €450m $160m BE IV
Cruise.co.uk* 2016 £52m £128m BDC II Sapec Agro 2016 €456m €237m BE V
Dr Gerard 2013 Not disclosed PLN350m BE IV
Fat Face 2007 £360m £220m BE III Media & BigHand* 2012 £48m £28m BDC I/II Technology Groupe Thom 2010 €599m €630m BE IV Calypso 2016 Not disclosed $200m BE V
Hobbycraft 2010 Not disclosed £157m BE IV Dorna SBK 2013 Not disclosed €335m BE IV
Peyman 2016 Not disclosed TRY353m BE V eFront 2015 €300m $110m BE IV
Pret A Manger 2008 £364m £760m BE III MVF* 2015 Not disclosed £50m BDC II
Smyk 2016 €247m PLN1.6bn BEV Nordic Cinema Group 2015 SEK4.7bn SEK3.1bn BE V
The Dining Club Group* 2015 Not disclosed £19m BDC II Trustly* 2014 Not disclosed SEK295m BDC II
Vitamin Well* 2016 Not disclosed SEK468m BDC III * Denotes a Bridgepoint Development Capital investment
WiggleCRC 2011 £180m £357m BE IV
* Denotes a Bridgepoint Development Capital investment
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 54 responsible investing responsible investing 55
Michael Black Managing Partner, Bridgepoint Responsible Development Capital Investing
We have built responsible investing principles into our work and business practices and recognise that being a responsible investor is good for business.
That is why we have adopted a rigorous approach to the governance of our firm as well as the companies in which we invest. We have also put in place relevant ‘ESG’ principles to demonstrate our commitment to embed these criteria into our decision-making and ownership practices as well as into those of the companies our funds own.
This approach is overseen by our Audit & Risk Committee which comprises senior members of the team and is led by the chairman of our Advisory Board. Bridgepoint itself is also a signatory of the United Nations Principles for Responsible Investment and supports and endorses the recommendations of the Walker Guidelines on greater disclosure and transparency in private equity.
Bridgepoint is a signatory of the United Nations Principles for Responsible Investment
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 56 responsible investing responsible investing 57
An experienced leadership team
Governance A number of committees also exist potential acquisitions, divestments, Risk Management Daniel Wagener Director, London Bridgepoint has a number of to handle day-to-day operations refinancings, restructurings, A partner-level General Counsel is governance structures to ensure within the Firm: the Bridgepoint developments and financings responsible for ensuring that the that it remains accountable and Europe Operating Committee, of investments and investee Firm respects and adheres to internal transparent and that there is Portfolio Management Committee, companies in relation to the funds policies and operating procedures. complete alignment of interest Bridgepoint Europe and Bridgepoint managed by the Firm and to Internal guidelines are also in place to between the Firm and its investors. Development Capital Investment recommend the expenditure eliminate conflicts of interest, taking Advisory Committees and of due diligence costs. into account the Firm’s obligations A Group Board, Bridgepoint Bridgepoint Development Capital under its fund management Advisers Group, takes executive Board. These run the day-to-day Advisory Board agreements and fiduciary duties. In responsibility for the strategic operations of Bridgepoint and The Firm also benefits from the addressing conflicts, it seeks to do so direction of Bridgepoint with a report to the Group Board and input of an Advisory Board which with integrity, professionalism and in particular focus on: Partners’ Group on a regular basis. provides insight, knowledge and the best interest of its investors. • policies, standards and procedures experience to allow Bridgepoint Investment decisions are reached Each Bridgepoint fund also has an required to give effect to the team members to make better through an Investment Advisory Investors’ Committee drawn from Group’s strategies and goals informed decisions about Committee (for each of Bridgepoint representatives of investors in that • control of Bridgepoint’s finances investments and developments Europe and BDC) comprising fund to provide a forum for discussion • regulatory and risk management as a Firm. members of the group board as of the fund’s investment strategy or • ESG matters and the setting of well as other partners with specific It comprises figures from different performance and any potential or ESG policy and targets sector or operating experience. aspects of corporate and political actual conflicts of interest. • output of the Group’s key life who are able to provide us with committees, including the The role of the Committee is external perspectives on strategic, Conflicts Committee, the to consider advice from the political, social and other matters Allocations Committee, the Audit various advisory companies to supplement the expertise of the “A commitment to embed ESG and Risk Committee and the within the Bridgepoint Group Bridgepoint team. Remuneration Committee. and to assess and recommend criteria into our decision- making and ownership practices as well as into the companies our funds own.”
The group board, Bridgepoint Advisers Group, has executive A list of partners and other colleagues responsibility for setting the Firm’s strategy and ensuring is profiled in full on the Bridgepoint that the shared values and business objectives we have set website (www.bridgepoint.eu) ourselves are upheld and met. Its members include: The Firm supports and endorses the recommendations of the Walker Guidelines for greater disclosure and John Barber William Jackson transparency in private equity. Benoit Bassi José María Maldonado Michael Black Frédéric Pescatori Chris Busby Guy Weldon Raoul Hughes
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 58 responsible investing responsible investing 59
ESG in practice Prior to making a new investment, After we make an investment Integrating responsible and sustainable ESG and sustainability Bridgepoint identifies material and a company becomes part of our considerations are environmental and social risks and portfolio, we work with management investing into our portfolio opportunities by requiring pre- teams to implement appropriate present throughout the investment proposals to include ESG policies and procedures Bridgepoint investment an analysis of ESG issues for relevant to their sector. For example, Fat Face process – before we consideration by our Investment we typically seek to improve energy The UK’s leading ‘active lifestyle’ make an investment, Advisory Committee. In particular, and water use, waste recycling clothing brand while we are invested we will expect companies to comply and more ethical supply chain with relevant environmental and management. We encourage them and when we finally employment laws, especially in to work with like-minded trading sell a company – and relation to employees’ health and partners to assess material risks and Carbon footprint of Factory assessed safety, rights and welfare. to mitigate future risks with targets factory in Bangalore by an independent are a key part of the reduced using third party to ‘SMETA’ and timelines for improvement. governance of the funds’ We also expect each portfolio lighting sensors and (Sedex Members solar panels Ethical Trade Audit) portfolio companies. company to assess material Portfolio companies are also guidelines every year environmental risks of their structured in such a way that major operations and to work towards decisions can only be reached with Nickel-free zips used to avoid skin allergies Washed in a laundry relevant international good the agreement of Bridgepoint. that recycles water practice standards, setting targets using an effluent for improvement. This is typically Made in a factory which treatment plant included in our 100-day plan when supports workers and their families with an we acquire a business. education and health Cotton sourced programme and an on- through the Better site nursery for children Cotton Initiative
AHT Cooling Systems Ben Marten Legal Counsel, London The company is the leading manufacturer of conventional ‘plug-in’ refrigeration equipment
Intelligent frame heating with hot gas from the cooling process – no electrical Sliding glass lids power needed keep goods at the right temperature and are energy- saving
AHT cabinets are fully recyclable – more than Sustainable 96% of the used production process components and to ISO 14001 materials can be environmental re-used management system Energy-saving compressor technology with ‘green’ refrigerants R290 (Propane) and R600a (Isobutane). Refrigerants used do not have any negative impact on the ozone layer and have no impact on global warming
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 60 responsible investing responsible investing 61
Bridgepoint Giving
Our charitable foundation – persons who suffer from chronic In 2016 we’ve supported Bridgepoint Charitable Trust (‘BCT’) – loneliness and who are in need of Aenilce was formed and is funded by the support. It recruits and mobilises Contact the Elderly Firm and its employees. It provides volunteers to host discussion / catch support to charities nominated by up groups and afternoon teas or meals Fundacja Dzieci Niczyje our teams across our network and in their homes for elderly people, Gut Hausen considered by trustees who are typically people aged 75 and above Orchestre à l’Ecole drawn from across the Firm. BCT (see www.contact-the-elderly.org.uk). also matches the fundraising efforts United World Schools And United World Schools, a of individual team members and UK-based charity which provides supports the charities sponsored by education to isolated communities colleagues or companies having a who do not receive the benefit of close relationship with the firm. government education systems, In 2016 we committed over £240,000 typically in the Far East (see www. to charities, including three previously unitedworldschools.org). adopted by Bridgepoint offices With these two new donations, BCT – Orchestre à l’Ecole in France, will have given almost £2 million to Nobody’s Children in Poland and charities across Europe – in France, Aenilce in Spain. Germany, Poland, Spain, Sweden, These were joined by two new Turkey and the UK. charities. Firstly, a UK charity that aims to reduce the number of elderly
United World Schools was Committed to charities in 2016 a charity supported by £240,000 Bridgepoint in 2016
Given to charities across Europe £2m
Charles Barter General Counsel, London
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 62 responsible investing responsible investing 63
How a penny has made a difference
A clever piece of technology has been helping three Bridgepoint investee companies raise lots of money for their chosen charities. It’s called Pennies, a financial technology charity – the digital upgrade of the traditional collection box, helping customers make their pennies count for charity when they pay by card – in-store, online or in an app. Pennies works with three of Bridgepoint’s portfolio companies businesses, Zizzi Ristorante, ASK United Kingdom United Kingdom Italian and Hobbycraft in the UK. To date, over £1 million has U nited World Schools Contact the Elderly been raised thanks to customers of these companies from more The BCT donation will fund the BCT will support the Invisible Face of than 4.8million donations, since December 2010. building and running of a new school Loneliness, a national campaign tackling in Sdao in Northern Cambodia for a loneliness across the UK. This sets out to By making their customers’ year, including the employment of continue the work of the charity by allowing it pennies count, this has made a big difference to each of the two teachers, after which UWS will to employ a dedicated Business Development/ charities they have supported: partner the school with one in a more Campaign Manager and create 25 new groups Cancer Research UK, Great affluent country who will then take on nationwide that will save 200 older people from Ormond Street Hospital, and its running costs. The village currently chronic loneliness and give 300 volunteers the Together for Short Lives. has no functional school. opportunity to support those most in need.
www.unitedworldschools.org www.contact-the-elderly.org.uk
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review 64 Offices Offices 65 Offices
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Vincent-Gaël Baudet Partner, Paris Bridgepoint Advisers Limited, a subsidiary of Bridgepoint Advisers Group Limited, is authorised and regulated by the Financial Conduct Authority
2016 Bridgepoint Annual Review 2016 Bridgepoint Annual Review www.bridgepoint.eu