About the company

GuidePoint Security is a US-based global provider of consulting services to the public sector and commercial markets, focusing on management, technology and risk consulting.

The company is headquartered in Washington D.C. and employs more than 17,000 professionals in more than 55 locations globally. GuidePoint Security is led by seasoned professionals with proven and diverse expertise in traditional and emerging technologies, markets, and agenda-setting issues driving national and global economies.

Investment rationale

• Complexity of the cybersecurity landscape is becoming more pronounced, with ever-evolving threats and thousands of products available to customers. Therefore, demand for cybersecurity services from organisations is set to grow.
• GuidePoint Security had the potential to scale rapidly via a buy-and-build strategy and organic growth.
• The business had a team of highly experienced cybersecurity practitioners and consultants with deep domain knowledge and expertise. They had developed a best practice approach to evaluating, selecting, implementing, managing and optimising cybersecurity solutions.

Private equity manager profile

• ABS Capital Partners (“ABS Capital”) provides growth equity capital to business-to-business (“B2B”) software and tech-enabled services businesses. The businesses are typically underpinned by strong technology and data and are looking to scale up with the right partners.
• The private equity manager has over 30 years of investment experience and has invested in approximately 130 companies across eight funds.

Our relationship

Pantheon has a long-established relationship with ABS Capital. It has made several primary and secondary investments in various ABS Capital funds and has also previously co-invested alongside the manager.

Active management and value creation

• ABS Capital accelerated the growth trajectory of GuidePoint Security by focusing on its organic growth and geographic expansion. This has broadened the client base across the USA and positioned it for international expansion. GuidePoint Security has more than 3,800 client organisations across the USA, including one third of the Fortune 50 and 40% of the Fortune 500, along with more than half of the US government cabinet-level agencies.
• ABS Capital joined GuidePoint Security’s board of directors. This has brought additional expertise and strategic guidance to the company.
• ABS Capital also recruited top executives with experience in building and leading finance teams for high-growth technology companies.
• ABS Capital has supported GuidePoint Security’s commitment to hiring top cybersecurity talent and investing in innovative service offerings to address new and emerging risks.

Exit

• In October 2023, GuidePoint received another round of funding from Audax Private Equity, a middle market investment firm. PIP took the opportunity to partially exit the investment at a money multiple of 5.7x and an internal rate of return (“IRR”) of 74%.

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About the company

Eleda is a group of Nordic businesses that provide infrastructure development and services. The network of companies operates independently within several segments, addressing the need for green transition, including water and sewerage, power distribution, district heating, roads, data centres, railways and electric vehicle charging stations.

Business description

• Eleda’s decentralised operating model allows its companies to deliver the highest quality services to their customers with the optimal mix of local presence and the resources of a larger organisation.
• The company’s headquarters are in Stockholm, Sweden. It has more than 3,100 employees and a turnover exceeding SEK 16bn (equivalent to US$ 1.5bn).

Investment rationale

• The company is well placed to take advantage of key developing sustainability trends like electrification, renewable energy and water preservation.
• The private equity manager has specialist experience in the sustainability sector and a proven investment track record in the Nordic mid-market space.

Private equity manager profile

• • Altor Equity Partners (“Altor”) has raised more than EUR 11bn in total commitments since inception and has invested in nearly 100 companies.
  • The investments have been made in medium-sized Nordic and DACH¹ companies with the aim of creating value through growth initiatives and operational improvements.
  • Among current and past investments are Trioworld, OX2, FLSmidth , H2 Green Steel and Piab.

¹DACH comprises three countries: Germany, Austria and Switzerland.

Our relationship

Pantheon has a long-established relationship with Altor Equity Partners. Pantheon was one of the founding limited partners in Altor in 2003, and has continued to support the franchise, investing in Altor’s five successor funds and in ACT I, its climate transition fund.

Active management and value creation

Altor created Eleda in April 2020 through the merger of three well-positioned infrastructure services platforms. At the time of the merger, the company had a turnover of approximately SEK 6bn. Today, Eleda has over SEK 15bn of revenues, driven by strong organic growth of more than 10% per annum, and through 19 acquisitions.

Exit

Eleda was acquired by Bain Capital, a global private markets investment firm, in December 2023. PIP made a return of 5.1x on the original cost and an IRR of 60%.

About the company

Based in Poland, Velvet CARE is a major producer and distributor of branded paper tissue products, including toilet paper, facial tissues, kitchen towels, moist wipes, cosmetic pads and buds. It employs more than 850 people across offices and manufacturing facilities in Poland and the Czech Republic.

The company owns the iconic Velvet CARE brand in Poland, which has a 20-year history and a brand recognition of 97% in the country.

Investment rationale

• Abris Capital Partners (“Abris”) has a strong track record in the tissue manufacturing sector. Through its prior investment in a jumbo roll paper producer in the region, and the evaluation of potential add-on acquisitions, Abris has developed significant insights and sector knowledge in the space.
• Velvet CARE is a non-discretionary consumer staples business, where industry growth is driven by the increase of tissue consumption per capita in the Central and Eastern Europe (CEE) region, as well as product innovations.
• At the time of the investment, Velvet CARE was considered to benefit from a number of competitive advantages: strong brand awareness; private label growth opportunities; and margin improvement potential following recent capital expenditure investment for the installation of a new jumbo roll machine.
• In addition, Abris identified upside potential from a possible merger with upstream and downstream value chain players, including those that were already identified by Velvet CARE’s management team, thus offering the potential to create a regional leader.

Our relationship

Pantheon has a long-established relationship with Abris, having invested in the two most recent funds through both primary and secondary investments. Pantheon is also an LPAC¹ member in both funds.

¹Limited Partner Advisory Committee.

Active management and value creation

• During Abris’ investment holding period, Velvet CARE sales increased by 2.3 times and the company’s EBITDA grew by seven times.
• Velvet CARE expanded its export business fivefold.
• In 2020, the company completed the add-on acquisition of Moracell, the largest manufacturer of paper hygiene products in the Czech Republic. This consolidated Velvet’s presence in the CEE market, strengthened the company’s position as a regional leader, and expanded its international footprint with limited client overlap.
• More than EUR 130m was spent on production, automation and storage capital expenditure to improve competitive positioning across all product categories. In addition, this improved profitability and product quality.
• Following the development and implementation of a comprehensive Environmental, Social and Governance (“ESG”) programme Velvet CARE received B Corp certification in 2023, demonstrating the highest standards of social and environmental performance.
• The company also received a gold medal from EcoVadis, an independent sustainability rating agency.

Exit

Velvet CARE was acquired by a fund managed by Partners Group in December 2023. PIP achieved a gross IRR of 30% and net multiple of invested capital (MOIC) of 4.1x

About the company

Confluent is a US-based technology company that offers a data platform to help enterprises harness business value from tracking and streaming data points such as sales, trades, orders and customer feedback.

Business description

• The company’s solutions transform its customers’ data into data products, spanning various end-user domains, including financial services, manufacturing, Internet of Things (IoT), retail and ecommerce.
• Confluent’s cloud-native platform acts as a central nervous system for companies, allowing them to connect all their applications around real-time data streams, providing data integration, data processing and analytics.
• Confluent’s offering is based on Apache Kafka, an open-source data streaming platform that is reliable, durable and scalable. Thousands of organisations (including more than 75% of the Fortune 500) use Kafka.

Investment rationale

• Strong upside potential, with businesses becoming ever more reliant on using data to drive decision-making. Confluent provides a unique solution by offering the infrastructure that connects data across organisations.
• Index Ventures (“Index”) has a very strong track record of providing venture capital backing to innovative entrepreneurs in the IT space. Index led the Series B round of funding in Confluent, in April 2015.
• The founders of the business were originally with LinkedIn, where they had been working on Apache Kafka, an open-source data streaming platform, and therefore were well placed to commercialise the technology with backing from Index Ventures.

Private equity manager profile

• Index Ventures is a leading European venture capital firm with offices in London, San Francisco, New York, Jersey and Geneva. It invests in technology-enabled companies with a focus on artificial intelligence, ecommerce, fintech, mobility and security. Since its founding in 1996, the firm has raised and invested more than $15 billion.
• Index Ventures has a strong investment track record, with notable successful investments including Adyen, Deliveroo, Dropbox, Farfetch, King and Slack.

Our relationship

• Pantheon has a 20-year relationship with Index Ventures. It has several primary and secondary investments in Index Ventures’ funds and has also co-invested alongside Index in certain growth opportunities.
• Pantheon is a member of multiple Index Ventures and Index Growth Advisory Committees.

Active management and value creation

• During Index’s period of active ownership, Confluent has emerged as a key player in the big-data software industry, with the demands imposed by artificial intelligence (AI) workloads fuelling growth further.
• The company’s data infrastructure software platform has gained significant traction among enterprises, with a client portfolio now that numbers over 2,500 customers.
• As an active investor, Index made over 50 C-suite level introductions, significantly contributing to early-stage enterprise customer deals.
• In addition, Index participated in executive level hiring at Confluent, from introducing suitable candidates to helping Confluent complete executive hires, to working closely with the CEO and President on several executive transitions.
• Index headed the company’s M&A sub-committee, with active involvement in several M&A transactions, and actively participated in the company’s strategic development, especially in the creation of Confluent’s key product, ConfluentCloud.
• With Index’s backing, Confluent was successful in initiating partnerships with giant tech incumbents to broaden its reach. In April 2019, it partnered with Google Cloud and integrated Confluent’s managed service with Google Cloud Platform. Additionally, in November 2020, the company announced plans for a partnership with IBM, when the computer manufacturer agreed to resell Confluent Platform to its own users.
• Confluent’s last private valuation in 2019 was US$2.5 billion, and by June 2021, when it completed an IPO on the Nasdaq, it was valued at US$ 9.0 billion.

Exit

• Index co-led the discussions for the Series C and D investments with external investors, and actively participated in the IPO process, including investment banker selection and pricing.
• After publicly listing Confluent on the Nasdaq in 2021, Index Ventures has been steadily selling down stock. It recently exited a significant portion of its holdings. So far, PIP has made a blended net return of c.8.2x cost and a blended net IRR of c.45% on its investment (in USD terms), with more than 7x the original cost of the investment having been distributed to date.

About the company

Nomios provides cybersecurity and networking solutions for enterprises. The company’s services include managed detection and response, network security, and secure access service edge (SASE). The business aims to simplify and automate network operations while enhancing security.

Headquartered in France, Nomios has a presence in 20 offices across Europe and has more than 600 employees.

Investment rationale

• The company operates in a large and growing cybersecurity market.
• It is the market leader in the Netherlands and France, with a growing presence in the UK, Belgium, Germany and Poland.
• At the time of the investment, there was a significant opportunity to conduct a buy-and-build strategy and drive consolidation in the market.

Private equity manager profile

• IK Partners (“IK”) is a London-headquartered European mid-market private equity firm focused on investments in the Benelux, DACH (Germany, Austria, Switzerland), France, Nordics, and the UK, with an emphasis on leveraging local expertise and market knowledge.
• Since its founding in 1989, IK Partners has raised more than €17 billion of capital and invested in over 190 European companies.
• IK Partners targets investments across various sectors, including business services, healthcare, consumer and industrials.

Our relationship

• Pantheon has a long-established relationship with IK Partners. It has several primary and secondary investments in various IK Partners funds and has also completed multiple co-investments alongside the private equity manager.

Active management and value creation

• Since IK acquired the company in January 2019, Nomios has undergone a transition towards becoming a cybersecurity business of scale across Europe.
• The company has successfully doubled its revenues through organic growth, which has been realised across service lines and geographies.
• Nomios has capitalised on its proven track record of client stickiness, maintaining and achieving high vendor accreditations and high employee loyalty.
• Nomios has also launched several new strategic initiatives, including the successful unveiling of various security operating centres (SOC’s) in its key markets.
• The company has also expanded its footprint in Europe through two acquisitions in Poland and Italy.

Exit

• In November 2023, Nomios was acquired by Keensight Capital, a private equity manager focused on pan-European growth buyout investments. PIP made a return of 2.8x on the original cost and IRR of 25%.

About the company

Perspective is a wealth and investment manager with 143 advisers providing coverage of the UK market through a network of 40 local offices.

Headquartered in Chorley, United Kingdom, the business provides financial advisory services in the areas of retirement planning, asset management, personal wealth and corporate planning for customers in the United Kingdom.

Investment rationale

• The financial advisory market in the UK is highly fragmented. CBPE saw the potential to consolidate the market through Perspective.
• The business had strong foundations from which to launch a buy-and-build strategy. With a strong compliance culture, client and adviser churn was low. The team was highly experienced and well-aligned with CBPE on strategy. The business had experience of undertaking M&A but had only recently started its M&A journey.
• CBPE and the team recognised the opportunity to build a diversified wealth manager of scale through acquisitive growth of the long tail of relatively small Independent Financial Adviser (“IFA”) firms. Many of these IFAs were approaching retirement and did not have the resources to invest in new technology and compliance systems.
• CBPE partnered with Perspective’s management team, who all reinvested in the business, therefore ensuring a strong alignment of business objectives.
• CBPE understood the key element of a successful wealth business and the importance of maintaining Perspective’s client-centric culture, which reduced compliance risks and ensured client retention and growth.

Private equity manager profile

• Founded in 1984, CBPE is a London-based private equity investment firm that specialises in investing in small and middle-market companies in the UK. The firm has a particular focus on acquiring businesses from founders and management teams in sectors such as healthcare, business and financial services, industrials and technology.
• Since becoming an independent business in 2008, CBPE has raised three funds and has over £1bn in assets under management.
• CBPE works very closely with the management teams of its portfolio companies to drive growth, and is adept at implementing buy-and-build strategies. Since 2008, CBPE has completed more than180 investments, demonstrating its active role in the market.

Our relationship

• Pantheon has a long-established relationship with CBPE. It is a primary investor in several funds, and a secondary investor in CBPE IX and has also previously co-invested alongside the manager.

Active management and value creation

• During CBPE’s investment, the business grew significantly from £2.6bn to £8.0bn of assets under management through a focused buy-and-build investment strategy, supported by strong organic growth.
• Together with Perspective, CBPE built a highly efficient M&A execution and integration team, which allowed Perspective to become the go-to acquirer for retiring Independent Financial Adviser businesses. Perspective has completed over 50 acquisitions since CBPE invested in it.
• CBPE facilitated significant investments in central support functions and technology. This enabled all acquisitions to benefit from consistently high standards of advice and compliance.

Exit

• In February 2024, Perspective agreed a sale to Charlesbank Capital Partners, a US middle-market private equity firm. The transaction closed in May 2024. PIP made a return of 5.4x on the original cost.

About the company

Founded in 2003, Altor Equity Partners (“Altor”) is a mid-market private equity firm based in Europe that seeks to scale and optimise companies with world-class potential through fundamental business improvements and earnings growth.

The consideration of sustainability is one of many factors that form part of Altor’s investment approach. Beyond mitigating sustainability risks as part of its investment process, Altor has implemented a framework of comprehensive sustainability performance monitoring of its portfolio companies.

It is a signatory to the Science Based Targets initiative (“SBTi”) and it is supporting its portfolio companies to develop science-based targets and implement decarbonisation pathways. Altor’s ambition is to make every Altor-backed company a sustainability leader in its respective industry.

PIP has backed Altor since 2003 and, in March 2024, made a commitment to Altor’s ACT I, which is a fund focused on investment opportunities that have a specific green transition or industrial decarbonisation theme. In Europe, there is a significant and growing push to decarbonise supply chains in order to meet the European Union’s target to reduce net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

As a result, Altor believes that many businesses are seeking to secure compliant, more sustainable supply chains to achieve their own targets, and this push is leading to an increase in businesses that can help to  deliver sustainable supply chains at significant scale within the next five to 10 years.

Altor’s ACT I aims to primarily invest in companies across a range of sectors where the green transition is central to their business models, and will include businesses that either have existing green transition value chains or businesses that are developing newer but proven industrial processes to directly deliver green end-solutions.

Altor has already identified a long list of attractive targets within a range of investment themes.

About the company

Yellow Hive is a leading Dutch insurance distribution platform with active broker and managing general agent (“MGA”) capabilities. The company, which serves both small and medium-sized enterprises and consumers, is a financial services intermediary for property and casualty insurances, employee benefits, risk assessment and mortgages.

The business is headquartered in the Netherlands and has more than 500 employees.

Investment rationale

• Yellow Hive had a high-quality platform displaying robust historical organic growth supplemented by proven buy-and-build capabilities.
• Resilient business model with expansion into higher margin MGA/niche sectors, which will drive cross-selling opportunities with the potential for significant synergies and economies of scale.
• Fragmented and growing underlying market provides an attractive buy-and-build opportunity.
• A strong alignment with a core, high-quality private equity manager.

Our relationship

Pantheon is an existing primary investor in IK Partners’ (“IK”) Small Cap Fund II and has been an active investor with the private equity manager since 2000, having invested in several of their mid-cap funds on a primary basis and completed eight co-investments.

Active management and value creation

• IK acquired Yellow Hive in 2020 and has since grown revenue and EBITDA by 5.5 and 6.0 times respectively.
• Mergers & Acquisitions are in the DNA of the company. All the business segments are supported by a shared services centre, which enables the business to seamlessly integrate new businesses to the platform, driving efficiency and generating synergies. Furthermore, the company has a good track record of transferring its portfolio of policies into its own MGA channel, and therefore further synergies are anticipated.
• Yellow Hive has the long-term goal of replicating the platform that it has today on a pan-European scale. The company, assisted by IK, has built a pipeline of targets into its plan and aims to execute on this to grow business earnings.

In 2020, and subsequently in 2023, PIP invested in Action, a leading European general merchandise discount retailer operating across 12 countries, which is backed by 3i Group plc, an international investment company focusing on private equity and infrastructure.

Action believes that sustainability should be accessible for all, by providing customers with good quality, sustainable products at the lowest price.

To achieve this, the company has set itself ambitious and measurable targets through the implementation of the Action Sustainability Programme. Initiatives delivered to date as part of this programme include:

• A commitment to reduce Scope 1 and 2 carbon emissions by at least 60% by the end of 2030, from a 2021 baseline. In the last two years, and while significantly growing the store and distribution network, the company has already achieved a 46% reduction as part of this target. This was delivered by procuring c.90% of electricity from renewable sources, disconnecting most stores from the gas supply, improving energy efficiency of stores, installing solar panels at seven out of 13 distribution centres, switching to biodiesel for 150 Action trucks, and piloting four new zero-emission e-trucks;
• Ambitions to reduce its emissions from the supply chain. The company has now established a full baseline for Scope 3, which represents 99% of its total carbon footprint (of which product raw materials, manufacturing and transportation represent 75% of the total);
• A focus on product circularity, working in partnership with Circle Economy, the Ellen MacArthur Foundation and Delft University of Technology. The company is working end-to-end from initial product design to disposal to improve material inflow, product lifespan and ease of recyclability.
• In 2023, Action delivered circularity improvements of +4.85% across all product categories and launched its first ever circular product in the form of plastic storage baskets. These baskets are a closed-loop product, made entirely from damaged items that have been returned by customers, thereby avoiding 5,000kg of waste. The company will look to expand its range of recycled, closed-loop products in the future; and
• Action has made significant progress in its goals to source more certified sustainable products. During 2023, Action sourced 100% sustainable cotton (private and white label products) and cocoa (private label products), and made significant progress towards its goal of achieving 100% sustainably sourced timber by 2024, with 95% of timber products certified as sustainable in 2023.

Action intends to build on its progress so far to ensure that it is able to meet the expectations of its cost- and eco-conscious customers.

About the company

Vistra is a global provider of corporate and trust services.

BPEA EQT (“BPEA”) first invested in Vistra in 2015, completing a major merger with Orangefield at the time of acquisition.

The combined entity has become the third largest player globally in the corporate and trust services industry and the largest in Asia, with a broadened geographical reach a broadened geographical reach and coverage in 85 locations across 45 jurisdictions, broadly split equally between Asia and Europe.

Investment rationale

• Vistra is an asset-light business with high recurring revenues and strong cash conversion.
• At the time of acquisition, Vistra had a deep track record of acquisitions alongside robust organic growth. There was significant scope for more bolt-on acquisitions and operational improvement opportunities.
• Strong alignment with management team who also took up equity stakes in the new enlarged business.

Our relationship

Pantheon has been a long-term investor with the manager, having backed its funds on a primary and secondary basis since 2005. In addition, Pantheon has been an Advisory Board member for numerous BPEA funds.

Active management and value creation

BPEA first invested in Vistra in 2015, completing a major merger with Orangefield at the time of acquisition. This initial acquisition was followed by 21 additional bolt-ons which added $77m of incremental EBITDA at a blended average multiple of 9x Enterprise Value (EV)/EBITDA, delivering on a planned transformational Mergers and Acquisitions (M&A) strategy.

Through this M&A and organic growth, BPEA expanded Vistra’s geographical reach to the Americas, UK, and Middle East, and restructured its divisions to better service the faster-growing Alternative Investment client base.

As a result, Vistra has grown revenue and EBITDA by over 131% and 172%, respectively since 2015.

Exit

Vistra merged with Tricor in 2023, creating a business with a combined enterprise value of $6.5bn. This transaction gave existing investors, like PIP, the opportunity to exit at an attractive return of 3.4x cost multiple.