Entering a Darwinian cycle
The current crisis faced by the world’s economies, companies and people has been described throughout as “unprecedented”. However, while the coronavirus certainly has created obstacles and forced restrictions that we have not previously had to cope with, mankind has proven that it will find ways to deal with these problems and come out stronger the other side. Charles Darwin, the father of modern evolutionary theory, summed it up when he said:
In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.
The ability to be flexible and agile when facing the significant challenges created by global markets and other unprecedented events lies at the core of Kartesia’s business model and core values. Throughout the coronavirus pandemic we have worked quickly and methodically to ensure a favourable outcome for our investors, portfolio companies, employees and other stakeholders, as well as position ourselves strongly for whatever the virus might throw at us next.
Our immediate focus was, of course, the well-being of any Kartesia team and the financial welfare of our portfolio companies which, in many cases, were facing full or partial closure of their operations, or at the very least some impact to their ways of working. As soon as it became apparent to us that there was going to be no quick solution to Covid-19, we analysed the cash positions across the portfolio, working closely with all management teams, and established where it would be necessary to provide additional liquidity to secure these positions.
The next twelve months will likely bring detailed discussions with borrowers and other stakeholders on how to support portfolio companies through this period of recovery and what additional capital can be made available in alignment with Kartesia’s investment strategy and responsibility to its investors. We are set up to show greater flexibility than many of our competitors but will absolutely aim to preserve our capital position and seek the financial returns this approach merits.
We are also very pleased to say that, despite the significant challenges presented, including full remote working, we have quickly adapted to the new cycle created by the pandemic and have now deployed more capital from our KCO V and KSO I funds post-Covid-19 than before it. While we made some adjustments to the sectors targeted, the amount of leverage in transactions and the pricing of loans; we remain confident that Kartesia can continue to be the go-to source of capital for Europe’s fast-growing small and medium-sized companies.