Private Equity – CIC to form global strategies for European clients

March saw the operational launch of Corporate & Investment Counseling (CIC), an independent company formed to develop and implement global private equity investment strategies for European clients. CIC considers itself a third-wave continental European private equity advisor’, and will aim to create transparency to facilitate the transfer of investment selection know-how from advisor to client.

The founders of CIC, Kurt Abplanalp, Berndt Samsinger and Agnes Varsanyi, combine extensive private equity experience with human resources and team assessment expertise. Kurt Abplanalp, a former COO of the Bemberg Group and board member of Lindt Sprungli, has worked as an independent private equity adviser for the past five years. Berndt Samsinger, meanwhile, will be familiar to most readers of this journal as the president of SECA, the Swiss Private Equity and Corporate Finance Association. Agnes Varsanyi, research associate at the Institute for Research in Business Administration/Human Resources Management at the University of Zurich, is a former executive search professional who specialises in private equity team assessment. CIC is currently in negotiation with potential US partners, who are expected to come on board this summer.

Berndt Samsinger stresses that CIC is not adopting a fund-of-funds approach, but will rather develop products tailor-made to individual clients’ needs, coaching and accompanying them through the decision-making process to enable them to develop the in-house private equity investment expertise so many institutions lack. CIC is targeting would-be investors, primarily private banks, pension funds and insurance companies, with sufficient assets to be able to commit substantial sums – CHFr 50 million to CHFr 100 million (A102 million) or more – to private equity. The firm is currently in final negotiations with three potential clients – to major Swiss private banking houses and an industrial group.

Samsinger maintains that the fund-of-funds route is not the best option for many groups: “Investors going through a fund-of-funds are paying fees up front for not much value added, and they do not necessarily get the opportunity to acquire expertise themselves”. CIC will charge a management fee of between 0.5 per cent and 0.75 per cent on fund investments that it structures and will receive carry subject to a 15 per cent hurdle.

The firm believes it has an additional USP in the form of the specialist team scrutiny skills contributed by Agnes Varsanyi, says Samsinger: “We do not consider that funds-of-funds or other advisers can provide in-house human resources know-how”. CIC, Samsinger says, sees its involvement with clients as temporary: “We expect our clients to be able to operate professionally within the private equity sphere within three to five years”.

The attractions of a private equity advisor prepared to educate’ its clients to operate independently are, on the surface, persuasive – always presuming clients can be confident that their in-house investment teams are going to remain in place for a protracted period. If not, then the need for external advice is likely to last rather longer than predicted by Samsinger. In any case, given the long fixed life of private equity fund investments, three to five years appears a rather short time-frame in which to build a truly value-added adviser-client relationship.