Realizing Value

We look at the optimal exit routes to realize highest returns on our investments and to recycle part of the cash into new investments. The time frame for realizing value –the investment horizon- has been typically 5 to 7 years, although some exceptions of shorter-term holdings do occur.

The principal exit routes for harvesting an investment are listed below:

  • Trade Sales: the sale of a portfolio company to an industry player, including a large competitor. The majority of exits that we contemplate will be achieved through this route. This often brings robust valuations especially in the case of a same industry competitor, who is seeking to gain market share, and is willing to pay a premium for the portfolio company;
  • Repurchases: the repurchase of Growthgate Capital’s stake by the other co-shareholders, founders or the management team in a MBO transaction;
  • Refinancings: the purchase of Growthgate Capital’s investment by another investment institution including another buyout or Private Equity firm;
  • Initial public offerings: the part sale of a portfolio company (typically 30 percent) via a public listing of shares on a regulated stock exchange. This exit route is most suitable at such times when capital market conditions are optimum and valuation indicators are high.