Our Investment Approach
Although Castik Capital has a preference for traditional majority buy-outs, funds managed by Castik Capital have a very flexible investment strategy and are able to take minority and majority positions in public or private companies. This flexibility helps to offer owners and managers the most suitable proposition for their business.
The Fund aims at investing €1 billion of equity capital in a small number of defensible, cash generative, or growth companies with high barriers to entry, along the three distinct investment strategies. The Fund had its final close in July 2015 at €1bn.
- Particularly suited for family-owned businesses
- Provide a hybrid equity/debt investment to enable a major acquisition or transformational change
- Family or existing shareholders maintain control of the business
- Acquire majority or large minority stakes in privately held companies, with active participation from management
- Conservative use of leverage
- Support growth and development of company over a long period of time (up to 10 years)
- Anchor investor in listed companies
- Final stake <30% without paying control premium
- Provide equity capital to a listed entity for an acquisition or a restructuring
- Remain a shareholder for many years to help the business grow
- Located in D, A, CH geographies
Castik invests in only a small number of excellent companies. We apply clear selection criteria that enable us to execute our strategy consistently and allow us to utilize significant resources to support the portfolio company’s development. Castik follows a very disciplined investment approach: often we know the companies we invest in for a long time and developed a deep understanding of their market, business model and growth opportunities as well as the challenges the businesses are facing and have built strong relationships with management and incumbent owners before a transaction is reached.
Castik has well-defined investment criteria that capitalize around the possibility for value creation:
- Organic market growth backed by secular trends
- Opportunities for buy-and-build / add-on M&A
- Recession-resilient business model
- Recurring revenue base
- Good cash conversion
- Clear opportunities for value creation
The Fund is able to invest across all sectors. We are looking for defensible, cash generative or growth businesses with high barriers to entry in industries profiting from secular growth trends. Historically, we have found these traits most often in the business and financial services, technology, consumer and retail, healthcare, industrials and (digital) media sectors.
Castik exclusively invests into established companies exhibiting some of the above company criteria:
- Target investment size: c. €100-250m equity per deal
- Target transaction size: c. €300-1,000m enterprise value per deal
- Smaller initial equity investments are possible if there are executable add-ons identified on Day 1 of the investment
- Together with its investors, the Fund is able to invest in companies with an enterprise value greater than €1bn
The geographic focus of the Fund is on Western and Central Europe (DACH, Benelux, France, UK, Italy, Poland, Czech Republic);
Castik has the flexibility to also invest in adjacent geographies, if we identify an attractive investment opportunity in these markets.
- Core Investment Focus
- Secondary Investment Focus
- No Investment