A word from our Chairman and CEO
“Difficult circumstances stimulate creativity, the driver of all growth.”
After two years of financial and economic crisis, the investment market is reviving and gathering speed. With its solid capital base, conservative investment policy and long-term investment horizon, Gimv has withstood the financial and economic crisis. It has also guided its portfolio companies - some of them in hard-hit sectors - relatively unscathed through this difficult period. In the words of a well-known Chinese proverb, Gimv has converted the crisis into an opportunity. It comes out of the crisis with strong resources, ready to invest in growing industries of the future, and in companies with profitable niche positions in traditional sectors. By contributing to the success of our portfolio companies, we secure our own progress and the creation of value for our shareholders.
Growth-oriented culture in an international network
Gimv continues to partner with promising businesses both in Europe and wider afield. In Europe, the French private equity market grew faster last year than elsewhere. Our Paris office did a number of attractive deals, such as Inside Secure, Private Outlet, Onedirect and Brunel. Gimv also made a number of attractive investments in Belgium, the Netherlands and Germany, including RES Software, Square Melon, McPhy Energy and PE International.
The crisis years have led Gimv to pay growing attention to being adequately diversified in terms of geography and end markets. Looking for growth, both Gimv and its portfolio companies are keen to move into new areas, and in particular the increasingly important Asian growth market. Barco, Punch Powertrain, VCST and Eden Chocolates among others have set foot in China. In particular through its Gimv Asia Advisory Council (GAAC), Gimv is proving its value as a provider of advice to our companies that see the Asian market as growth potential.
Careful selection criteria remain essential in deciding whether or not to make an investment. In certain transactions price expectations are too high. But high prices also provide exit opportunities, as is clearly the case right now in Venture Capital. The considerable interest shown by industrial partners in innovative companies has enabled us to divest a number of shareholdings over the past year at attractive prices. These include Plexxikon, Movetis, Liquavista and CoreOptics from our Venture Capital portfolio, as well as ANP and Scana Noliko in Buyouts & Growth.
Funds up to speed
Despite the difficult economic and financial times, Gimv has raised more than EUR 600 million from institutional investors for Gimv-managed co-investment funds. In the hands of specialised teams, supported by Gimv’s extensive knowledge network, these funds create good opportunities for future investments in high-potential areas.
In 2010 we successfully launched the Gimv-Agri+ Investment Fund and DG Infra Yield, in conjunction with leading Belgian financial players. Both funds have got off to a flying start: Gimv-Agri+ has invested growth capital in Belgian company Eden Chocolates and DG Infra Yield has invested in the Belwind wind farm off the coast of Zeebrugge.
The other two main co-investment funds, Gimv-XL and DG Infra+ are up to cruising speed. DG Infra+ has some highly promising projects on the table, which will strengthen its market position. Gimv-XL is keen to invest in Flemish growth stories, as demonstrated by its recent decision to invest in PinguinLutosa, one of the largest vegetable processors in Europe.
"Powering companies for growth: the central theme of all our activities."
Attractive profit growth
Our conclusion on FY 2010-2011 is unambiguous. Gimv achieved a good result. First because of the number of successful divestments, with realised capital gains providing nearly half our net profit, and second thanks to the better operating results reported by the majority of our portfolio companies, which has a knock-on effect on their portfolio value. The gross return on our portfolio was a very creditable 23.5 percent.
This global result, together with our strong cash position, means that we can sustain our internal growth, that we can continue building a diversified portfolio and that we can maintain our existing dividend policy.
It is right to thank our investors here for the confidence they have placed in us over the last year. And to ensure them of our ambition and commitment to continue to shape Gimv with unreduced momentum and the same growth-oriented approach.
Herman Daems and Koen Dejonckheere