Trials and Tribulations of Founding a Private Equity Business

WHEBp

Sustainability focused multi-asset class investment firm covering Private Equity, Listed Equities and

Infrastructure (acquiring renewable energy assets).

Total AuM around €480m of which some €250m (£210m) across three VC/PE funds.

WHEB PE Funds

• Fund 1 (2004 vintage) – “WHEB Ventures”: £24 million; invested in 8 companies and closed for new

deals. Investors are nearly all family offices. Focused on venture stage.

Fund 2 (2008 vintage) – “Green Growth Fund 1”: £105.million; invested in 12 companies to date.

Investors are around 70% family offices and 30% institutions. Focused on growth stage.

Fund 3 (2014 vintage) – “Green Growth Fund 2”: first closing in Feb 2014 at €95m with eventual

target of €200m. Likely investor base 15% family offices, 85% institutions. Focused on growth

stage.

Location

2 offices (London, Munich).

Team Size

20 investment professionals across WHEB Group of which 8 plus 3 special advisors involved in

the PE funds.

The Company

friedola TECH supplies tough, lightweight patented plastic components, for

automotive and logistic applications (used by Daimler, VW, others).

Products made from recycled materials derived at friedolaTECH‘s own

plastic waste recycling facilities.

Investment Thesis

Acquired 90% of the Company’s equity for an extremely low EBITDA

multiple.

Significant growth potential in new market segments, applications and

regions.

Fund 1

– Venture Stage

– 2008 financial crisis and world stopped

– Portfolio took longer to reach breakeven hence needed more money

– Fund too small so had to find co-investors (£25m since 2010)

– Changed business model to low cost licensing

Boom and Bust 4 year fee cycle

– Management fees drop dramatically once 4 year investment period over – from fees committed to being based on what’s left

– Can’t raise new fund until investment period over

– Getting to first close can take at least a year

– Makes planning very difficult

LP squeeze

– Fees under pressure

– GP commitment increases

Carry

– For new PE firm carry hasn’t happened yet!

www.whebgroup.com

CONFIDENTIAL

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