Strategies

Your Private Equity Specialist to Deliver Leading Risk-Adjusted Returns

Our investment approach is based on both capital preservation and sustainable value creation. The track record of the SwanCap team dates back to 2000 and has since been focused on investing in private equity via three complementary strategies that have consistently generated strong and compelling risk-adjusted returns: Primary Fund Commitments, Direct Co-Investments, and Direct Secondary Transactions.

Our product offering includes well-diversified SwanCap Fund products as well as managed accounts which are tailored to the individual needs and risk appetite of individual investors providing a one-stop-shop service offering.

Distinct access to attractive and mostly restricted investment opportunities across all strategies as well as a rigorous and highly selective investment process are pivotal to SwanCap’s multi-strategy approach. We relentlessly strive to create an optimal portfolio diversification for our clients with low volatility, efficient capital deployment and “ALPHA” generating asset selection. Our long-term track record demonstrates our ability to source and invest in top-tier investment opportunities across various market cycles.

SwanCap’s comprehensive team experience, deep understanding of the market and deeply entrenched networks provide access to best-in-class private equity investments, and have therefore allowed us to source the most attractive transactions across our three investment strategies.

SwanCap has always followed a highly selective investment strategy by being focused on a 360° due diligence review and thorough understanding of the associated risks and opportunities of a given investment, which allow us to select the highest quality, most compelling investments.

Primary Fund Commitments

Primary Fund Commitments is one of the three core pillars of our strategy. Throughout the past 20+ years, SwanCap has committed over €2.5 billion to 150+ buyout funds; allowing us to develop immeasurable, often difficult-to-replicate relationships in Europe and North America. This track record, which extends beyond our investment returns, provides SwanCap with access to numerous, best-in-class highly sought-after funds.

The SwanCap Team spends a significant amount of time in the analysis, due diligence and assessment of a multitude of fund managers; and for over two decades, SwanCap has developed robust assessment and structuring skills, formalised investment processes and gained invaluable industry insights to implement an optimal portfolio construction for our investors.

Cases

  • 175+
    # fund commitments
  • Bregal
    Bregal
    Primary Commitment

    At a glance
    Bregal Unternehmerkapital is part of a family-owned business that has grown over several generations. Bregal specialises in majority and minority holdings, particularly in mid-sized companies based in Germany, Switzerland and Austria – the “Mittelstand”. Its investment activity is based on long-term commitment and independent of developments in the financial markets.

    SwanCap Relationship
    SwanCap has known the Bregal Unternehmerkapital team for many years. During this period, the understanding of the team's abilities was sharpened and the feasibility of the investment philosophy was demonstrated. SwanCap is proud to be part of a small group of founding LPs forming today’s Bregal Unternehmerkapital.

  • Gryphon
    Gryphon
    Primary Commitment

    At a glance
    Gryphon Investors is a San Francisco-based, control oriented private equity firm that was founded in 1995. Operating in the lower-end of the US middle market, Gryphon’s industry focused strategy and high-energy team bring tremendous industry insights and operational expertise to every transaction. This tight integration of investment and operational professionals is rare in lower middle market investing.

    SwanCap Relationship
    Gryphon has been a long-term relationship of SwanCap spanning across several, successful fund and co-investment engagements. SwanCap began a dialogue with Gryphon in 2016 following a comprehensive screen of the US mid-market, where Gryphon materialized as a leading lower mid-market investors with significant in-house operating skillset, driving alpha via hands-on operational value creation.

  • Hg
    Hg
    Primary Commitment

    At a glance
    Hg has led 100+ investments in the software and services sector during the last 25 years. Hg’s objective is to pursue investment theses supporting long-term growth, leveraging its expertise working with software and services companies to implement initiatives designed to maximise organic expansion, as well as through rolling up fragmented sectors.

    SwanCap Relationship
    Hg is one of our key sector partners in Europe given its dedication and experience in the software and services sector. Over many years we have built a strong relationship with the Hg team and followed the consequent execution of Hg’s “bathtube” model which has nurtured numerous successful business models.

    Back in 2017, this strong conviction led to our first commitment alongside the LP in the Hg Genesis 8 fund and quite recently to the re-up in Hg Genesis 9.

  • PAI Partners
    PAI Partners
    Primary Commitment

    At a glance
    One of the oldest and most experienced private equity firms in Europe. PAI makes controlling investments in LBOs through acquiring majority stakes in mid- to large-sized European companies. PAI’s team has built an outstanding reputation for unlocking the complex, truly transforming investments, real sector and investment focus, local market knowledge and networks, and pan-European culture and capability.

    SwanCap Relationship
    Back in 2001, SwanCap has started to support PAI’s carve-out from BNP by backing the sponsor’s Fund III. Since that date, SwanCap has developed a trustful relationship supported by numerous co-investments which allowed us to re-up in every fund of the sponsor. For us PAI is a textbook case of how a trustful relationship between an LP and a GP.

Fund investment characteristics

  • Mid-market focused, complemented by selective engagements in the small-cap and large-cap space;
  • Private equity buyout, buy & build, special situations, and growth equity;
  • Generalist or sector-focused strategies;
  • Country or regional focus in Europe and North America;
  • Hands-on value creation;
  • Highly experienced investment and operating teams with a strong track record;
  • Not active in venture capital, credit or real estate funds.

Direct Co-Investments

We believe SwanCap is one of the most experienced co-investors in Europe with 100+ co-investments and over €1 billion of equity invested to support world-class management teams across Europe and North America. In 2001, SwanCap started to invest directly into companies alongside leading private equity buyout sponsors, establishing SwanCap as one of the early pioneers in the institutional co-investment market.

In every transaction, SwanCap performs a deep-dive due diligence to ensure a very high quality of the company and its markets, to get the full picture of the underlying transaction dynamics and to assess whether the transaction fits to our portfolio strategies and the high standards of our investment philosophy.

The ultimate goal of our due diligence is to source the most attractive transactions alongside sponsors providing a true edge in transforming and driving the business to ensure attractive financial returns coupled with the highest standards towards sustainable and responsible investing.

Cases

  • 100+
    # co-investments
  • Altice USA
    Altice USA
    Co-Investment

    At a glance
    Altice USA is a leading US communications and media company providing high-speed broadband and ultra-HD video, digital advertising solutions, local news, telephony and wireless offerings. The Company serves businesses and consumers predominantly in the United States.

    SwanCap Relationship
    For over two decades, SwanCap has entertained a strong relationship and pro-active dialog the former private equity owners of the Company, facilitating the opportunity to participate in the successful growth story of Altice USA from its stage as a private company to its listing on the New York Stock Exchange.

  • Engineering
    Engineering
    Co-Investment

    At a glance
    Engineering is a leading Italian IT company providing a full set of digital transformation services including System Integration, Application Development & Maintenance and IT Outsourcing. Engineering employs ~12,000 employees across Italy and its growing international footprint.

    SwanCap Relationship
    Leveraging on an existing relationship with the Company and its management, SwanCap invested in Engineering back in 2016. During our investment period the Company grew relentlessly capturing significant business opportunities from the acceleration in the digital transition among private and public clients.

  • Intralinks
    Intralinks
    Co-Investment

    At a glance
    Intralinks is the market leader in virtual data rooms (“VDRs”), which are designed for the mergers and acquisitions, alternative investment and capital markets communities. The Intralinks VDR is a SaaS application providing a secure, customizable environment to exchange sensitive documents and information.

    SwanCap Relationship
    Due to SwanCap’s strong positioning with the private equity owner of Intralinks, SwanCap was granted with the opportunity to invest in Intralinks well into the ownership period, allowing excellent visibility on early outcomes of key strategic initiatives; and a quick exit to the new strategic owner of the Company.

  • Visma
    Visma
    Co-Investment

    At a glance
    Visma offers software and services that simplify and digitise core business processes in the private and public sector. The Company operates across the entire Nordic region along with Benelux, Central and Eastern Europe. With 12,500 employees and 1,000,000 customers, Visma is one of Europe’s leading software companies.

    SwanCap Relationship
    Even well ahead of our investment in 2014, the SwanCap Team monitored the impressive development of the Company and its roll-out in the Nordics. This trajectory continued during our investment period and even thereafter; making Visma one of the leading and most innovative software players in Europe.

Co-investment characteristics

  • Company with an impressive historic development, a sustainable competitive advantage, strong management team and a unique value proposition in respect to the prevailing and expected market conditions;
  • Transaction with a strong deal setting (relative pricing, funding, etc.) and, importantly, being led by a skilled sponsor that has a thorough understanding and demonstrated track record in the relevant industry, the growth plan and enjoys strong ties with the management;
  • Portfolio effect that is in full alignment to our investment guidelines and our high E-S-G criteria and creates a positive, complementary effect to the fund / managed account.

Direct Secondaries

SwanCap takes an opportunistic and value-based approach towards investing in secondary opportunities with the overall objective of sourcing high-quality portfolios with an attractive value creation thesis run by top-tier sponsors that enhance the financial returns of our programs and mitigate the J-curve impact. Given our market positioning and transaction experience, SwanCap is often the partner of choice, which allows us to generate best-in-class secondary returns.

Value-based investing requires an in-depth understanding of the underlying companies and subsector fundamentals. SwanCap’s long-term track record, our differentiated sourcing capabilities as well as our integrated investment approach for primary, secondary and co-investments allows for superior due diligence and investment selection.

Cases

  • 50+
    # secondaries
  • Project Emily
    Project Emily
    Secondary

    At a glance
    Emily was a proprietary opportunity on a portfolio of mature small-cap funds acquired in a bilateral negotiation from a local financial institution leveraging on strong portfolio insights. Highly diversified pool of underlying investments managed by high-quality GPs.

    SwanCap angle / Investment thesis
    SwanCap benefitting from a unique insight on a portfolio of funds to which SwanCap has privileged access thanks to long-dated local relationships. This allowed a detailed bottom-up due diligence. The identified qualities and upside potential of some underlying industrial companies resulted in a strong value creation in a relatively short runway.

  • Project Omega
    Project Omega
    Secondary

    At a glance
    Omega was a continuation vehicle in support of the international growth trajectory of a German pharmaceutical company. The company has enjoyed resilient growth under the stewardship of a German mid-market sponsor and experienced a once-in-a-lifetime opportunity to supply an innovative US bioscience company requiring additional time and capital.

    SwanCap angle / Investment thesis
    SwanCap has strong inroads to the respective private equity sponsor and its advisor; via our local network SwanCap managed to thoroughly diligence the company and the outlined growth opportunity and develop a defensible, independent investment case. Thanks to our strong relationship we muscled ourselves into the deal which enjoys a strong trajectory delivering on initial business plans.

  • Project Sigma
    Project Sigma
    Secondary

    At a glance
    Sigma was a limited auction process on a portfolio of LP interests in a portfolio of funds managed by a GP based in the Nordics. Underlying portfolio composed predominantly of lower mid-market companies operating in the resilient Business Services space. Fully invested portfolio providing strong visibility on the underlying assets.

    SwanCap angle / Investment rationale
    Due diligence process supported by an established relationship with the GP. Ideal secondary timing with expected early realizations on a mature portfolio coupled with upside potential on a few key assets presenting additional runway for implementation of a proven value creation strategy.  

  • Project Silverbear
    Project Silverbear
    Secondary

    At a glance
    Silverbear was a proprietary opportunity regarding interests in three mature funds acquired following a bilateral negotiation with a UHNWI. The portfolio included funds managed by highly sought-after US GPs, with a strong focus on technology investments. High-conviction investment thesis relying on a detailed assessment and extensive modelling of the underling portfolio companies representing the key value creators.

    SwanCap angle
    Deal secured thanks to SwanCap’s ability to price and execute a fairly complex transaction where the sellers could only provide minimal information due to a Feeder structure. Independent access to the GPs allowed SwanCap to run full due diligence on the acquired funds and build bottom-up return scenarios. The strong performance of the portfolio’s assets resulted in very strong returns, in line with our upside case.

More on our secondary characteristics

  • Sourcing focused on proprietary transactions leveraging on the capacity to provide liquidity solutions in an expedited manner and with certainty of execution, in certain cases on relatively small transactions in less efficient segments of the market;
  • Deep understanding of the value creation potential of the underlying portfolio and the runway to create additional value under the stewardship of high-quality managers;
  • Achieving an optimal risk / return profile by levering proprietary insight and detailed bottom-up modelling, presence of early liquidity events that enhance returns, diversification elements and complementary portfolio risk effects.

Managed Accounts

SwanCap provides customized investment solutions for institutional investors and large family offices seeking a differentiated and individually tailored exposure to private equity. Our managed account solutions combine the deep expertise of SwanCap in assessing our core investment strategies and addresses bespoke investment horizons, allocation and portfolio development targets – fully customized to the individual needs of our clients.

SwanCap’s heritage as a captive player for a leading financial services firm has given us a unique perspective on the internal and external requirements needed to design and manage inhouse portfolio programmes. The mission critical nature of our services and the importance of transparency and honesty to our investors are core tenets to SwanCap on which we aim to be best-in-class. As such, SwanCap provides a full-service offering, which can rely on the expertise of our investment teams and the execution excellence of our Luxembourg based AIFM.

Every managed account is unique and independently designed to fit to the requirements and ambitions of our investors. The following overview provides a selection of our recent customised managed account solutions.

Recent customised managed account solutions

Captive Investment Activity

Prior to the foundation of SwanCap as an independent investment platform, the SwanCap Team managed the private equity investment programme of HypoVereinsbank / UniCredit. Those activities and networks formed the roots of today’s culture. While we aim to constantly enhance our operating procedures, the philosophy of risk-adjusted performance management by employing a multi-strategy investment approach has not changed.

  • Investment Strategy: Multi-strategy approach combining compelling Primary Fund Commitments, attractive Direct Co-Investment opportunities and selective Direct Secondary Transactions;
  • Investment Focus: Europe & North America; Mid-Market to Large-Cap;
  • Investment Status: Fully realised.
Example: Managed Account A

On behalf of a well-known German pension association SwanCap onboarded a large evergreen managed account in support of its portfolio ramp-up. The account was won via an advisor-led process, where SwanCap emerged as the best fit due to a compelling track record, a high level of due diligence experience and the ability to tailor our investment products and investor reporting to the specific needs of this client.

  • Investment Strategy: Primary Fund Commitments complemented by selective Direct Secondary Transactions facilitating an accelerated portfolio ramp-up;
  • Investment Focus: Focus on top European names and selected North American funds;
  • Investment Status: In investment and deployment mode.
Example: Managed Account B

On behalf of a German insurance company SwanCap onboarded a sizable managed account to execute on private equity investments. SwanCap emerged as the winner of this competitive process due to the ability to provide strong personal interaction, which is rooted in SwanCap’s Investment Boutique approach.

  • Investment Strategy: Primary Fund Commitments with a special focus on sector-thematic funds;
  • Investment Focus: Europe & North America; Mid-Market;
  • Investment Status: In investment and deployment mode.
Example: Managed Account C

By supporting the private equity ambitions of a leading pension association, SwanCap onboarding one of the largest and most demanded accounts in the German market. SwanCap’s Investment Boutique approach and its ability to deliver a comprehensive overview and assessment of attractive small-and lower mid-market GPs in Europe and the US allowed SwanCap to win this mandate.

  • Investment Strategy: Primary Fund Commitments;
  • Investment Focus: Europe & North America; Small-Cap and (Lower) Mid-Market;
  • Investment Status: In investment and deployment mode.
Example: Managed Account D

On behalf of a well-known family office SwanCap manages a bespoke managed account which combines primary commitments, selected secondary exposures and own products. SwanCap managed to win this client by offering tailormade solutions and dedicated management services.

  • Investment Strategy: Primary Fund Commitments with a special focus on sector-thematic funds;
  • Investment Focus: Europe and North America;
  • Investment Status: In investment and deployment mode.