From Chaos to Control: Effective Cash Flow Management
Monitoring, analysing, and optimising the inflow and outflow of cash within a business is a vital component of any turnaround. It involves effectively...
European Late-Stage Venture Capital Fund
Appointment by the LPs to replace the General Partner in a €50 million regulated European late-stage venture capital fund to divest the remaining portfolio companies and liquidate the fund structure. The appointment started with the beginning of the liquidation phase of the fund.
The fund was aged and had at the beginning of the liquidation phase over 50% of unrealized value and numerous portfolio companies in Austria and Germany. All funds’ positions were minority investments with little ability to take influence on the management or strategy of the underlying portfolio.
The initial portfolio review included the valuation and the potential exit routes, including timing and ability to realise the assets.
Given the minority positions of the fund and missing ability to take influence on the portfolio level and give the low alignment between portfolio management and previous fund management (GP), it was particularly difficult to establish a reliable exit plan on reliable return assumptions.
During the execution process, it turned out that portfolio companies had previously miscommunicated liquidity constraints and liability positions, which had made the realization even more difficult.
Drawing on our experience in complex fund situations and in fund restructuring and managed exits, we were able to divest of the majority of portfolio companies by realising significant value for investors. Some residual portfolio assets still provide significant upside potential for investors while the fund is in the last stretched before being ultimately closed.