Raising the value of human capital
The past 24 months has presented some of the most challenging circumstances for European businesses in living memory, with both the coronavirus pandemic and energy crisis putting an enormous amount of pressure on company P&Ls and balance sheets. As discussed in our last report, we have been proactive in providing continuous support for the financial health of our portfolio companies. However, one key issue that does often get lost when looking at the health of small and medium sized companies is not that of the P&L or balance sheet but of the people that are so crucial to our joint success.
Navigating these unprecedented times has put a massive amount of strain on the management teams and employees of every company, but particularly those that are targeting challenging levels of growth year on year despite market conditions, as is the case with most of our portfolio. It is not an easy transition to make from a “buying” to a “selling” market and to materialise the pricing power needed by businesses to acclimatise to this adjustment and, as a result, workload has never been so heavy for many of these management teams. We are thus fully aware that higher turnover rates for CFOs and other C-suite executives presents a huge challenge for sponsors and lenders who are aiming for continuity and consistency to weather the current macro-economic storm.
As a result, Kartesia is ensuring that human capital is properly assessed as part of every portfolio company deal monitoring to avoid key employee turnover. We strive to make sure that businesses can retain their talents with, in addition, proper succession planning in place. We believe it will be cornerstone to deliver sustainable growth for customers, investors and all other stakeholders in a way that fosters a collaborative and enjoyable working environment. As part of this commitment, we are offering advice to companies on the best use of human capital and giving them the tools and support to properly remunerate employees and align their interest in the success of the business.
We are also making sure that we regularly update portfolio companies on other potential risks in the markets, for example the escalating situation with China and Taiwan, and equip them with the knowledge and liquidity to best position their business for continued growth.
In this edition of the newsletter, we also look at some of the exciting recent deals that have been done by our investment teams as we continue to be a leading provider of flexible financing solutions for Europe’s lower mid-market. In addition, we are excited to announce the expansion of our platform to yet another key European market – read on to find out more!