Borletti Group

Private Equity

Operating from London and Luxembourg, Borletti Group’s Private Equity division is a team of successful managers with entrepreneurial, industrial and financial backgrounds. The team has expertise of investing in three core sectors: retail, luxury/branded consumer goods and real estate with a retail component.

Over the last eight years, Borletti Group has led acquisitions that total over €6bn:

  • - 2005: la Rinascente (Italy), €0.8bn
  • - 2006: Printemps (France), €0.9bn
  • - 2008: Karstadt (Real Estate), €4.5bn
INVESTMENT STRATEGY

Borletti Group makes investments in buy-outs, acquiring stakes in mid-sized companies within its core industry sectors.
These investments typically include leveraged buyouts and other types of private equity transactions, including co-investments. Borletti Group differs to many other private equity groups because it adjusts its investment horizon to suit the investment needs of the acquired company. This means that there are no maturity constraints on exit time, an approach that has resulted in an excellent track record of returns for co-investors.

INDUSTRY FOCUS

Borletti Group focuses on three core sectors:
- Retail with a particular focus on department stores
- Luxury and branded consumer goods
- Real estate with a retail component

VALUE CREATION
box PRIVATE EQUITY value creation

Borletti Group has a deep understanding of the sectors in which it invests. The Group brings a strong entrepreneurial approach to its investments and works with leading management teams to realise the full potential of the portfolio companies. The Group takes an active role in all investments, leveraging its network in targeted industries and using specific knowledge of industries to create a bespoke approach that gets results. Its aim is to act as support and accelerator of the company CEO and the management team. However, while Borletti Group participates in key strategic decisions it does not take a direct management role, leaving company management in charge of the day-to-day running of the business.

Borletti Group’s role with both Printemps and la Rinascente proves that this is a winning approach. In both cases, Borletti Group played an active role in driving the business plan and successfully:

  • • Increased sales by working alongside management in:
    • - Store and concept repositioning,
    • - Refurbishing to keep pace with the market
    • - Bringing in high performance brands
  • • Enhanced the value of the real estate assets by requalifying the underlying operations, increasing sales, profitability and subsequently rent.

Case Studies

La Rinascente

- March 2005: Acquisition of la Rinascente from IFIL / Auchan
Leading Italian department store with over €300m sales, 5,500 employees and a prime real estate portfolio
- Competitive auction with over 35 participants
- Borletti Group’s equity partners: Deutsche Bank, Pirelli, Investitori Associati
- 2005-2011: Strategy of revamping the stores, through major investments and of product category reallocation that led to a successful repositioning of la Rinascente
- June 2011: Sale of la Rinascente to Central Retail Corporation (Thai retail group)
- Over five times equity return

How Borletti Group made a difference

- Played a key role in the acquisition phase with the seller and its advisors
- Used its expertise to help the business
- Accessed its network and contacts to build a consortium involving some of the most prestigious and prominent private and institutional investors
- Delivered credibility with regards to unions, media and other institutions
- Decided the constitution of the management team
- Led important negotiations with key brands

Results 

- Significant sales improvement confirmed the success of the new brand strategy for
la Rinascente (+9.4% net sales in 2008)
- Unsuccessful own brands were replaced by “A-brands”

Printemps

- October 2006: Acquisition of “Printemps” from PPR Group
Leading French department store chain with €950m sales, over 5,000 employees and a prime real estate portfolio.
- Proprietary confidential acquisition process with only three participants.
- Borletti Group’s equity partner: Deutsche Bank.
- 2006-2013: Major investments to revamp the stores and product category reallocation leading to a successful repositioning of the group.
- July 2013: Sale of Printemps to Qatari investor (sales having reached €1.3bn).
- Over six times equity return.

How Borletti Group made a difference

- Played a key role in the acquisition phase with the seller and its advisors.
- Used its great expertise to help the business.
- Built a consortium involving some of the most prestigious and prominent private and institutional investors.
- Delivered credibility with regards to unions, media and other institutions during the acquisition phase.
- Identified the CEO and decided the constitution of the management team.
- Led negotiations with key brands.

Results 

- Successful repositioning of store network including the flagship store leading to a significant increase in sales productivity per square metre.
- Operational improvement leading to a four point increase in profitability.

Asset Management
Our Funds

The asset management activity of Borletti Group was launched in 2013 with the creation of Borletti & Partners as a Luxembourg-based investment manager. This operates as a separate division distinct from the private equity operation. A key driving force of this new venture is to leverage the Borletti Group private equity expertise and its industry know how. Its aim is to bring this insight and knowledge to the world of public companies and open-end funds, combining it with a hedge fund investment approach.

INVESTMENT UNIVERSE

The Borletti & Partners Fund was created to provide its investors with access to the expertise and insight packaged in the “The Borletti Asset Class “. The Borletti Asset Class is comprised of stocks, bonds and other liquid financial instruments across the Luxury, Retail, Consumer Services, Household and Personal Care sectors. A focus on these sectors combines attractive growth, inflation protection and income generation supported by well-recognized brands and franchises that have been built over a long period. Borletti Group’s investment universe includes around 250 listed companies worldwide.

INVESTMENT PROCESS

Borletti & Partners has a disciplined and rigorous investment process. Its objective is to achieve high performance by constructing a concentrated portfolio (between 20 and 25) of thoroughly selected stocks. While the aim is to be fully-invested for the majority of the time, its absolute return strategy builds in flexibility to protect investments, when needed, via effective and well-tested protection strategies. The goal is to build performance through long biased exposures.

Its global investment universe is closely monitored and industry insight, depth of knowledge and day‐to‐day intelligence enables the Borletti & Partners team to hand-pick stocks, sectors and regions that it believes are the most likely to achieve the best results. The goal is to adopt an approach that balances the best quality portfolio of stocks with diversification and portfolio risks. Borletti & Partners in‐depth, bottom-up, analysis will always be validated and counterbalanced with a top down approach for geographic positioning.

 

Funds

Savile Global Lifestyle Fund

The Savile Global Lifestyle Fund was created as a vehicle for stocks, bonds and other liquid financial instruments that make up “The Borletti Asset Class”.

Fund characteristics:

  • Fund name : Savile Global Lifestyle Fund
  • Fund Type : Luxembourg SIF
  • Expected launch date : Q2 2014
  • Share class currency : Euro
  • Initial charge : none
  • Exit charge : none
  • Redemptions : monthly
  • Prime Broker : Citi and Morgan Stanley
  • Administrator: Citi
  • Depositary/Custodian : Citi
  • Auditor : Deloitte
  • Portfolio Management System : Hedgeguard

Risk management

Clear and transparent organisation

Borletti & Partners’ organisation is based upon a strict separation of investment and non-investment tasks. The investment team is in charge of investment decisions, trading and portfolio management. The Risk and Operations team is responsible for trade and portfolio reconciliation, compliance controls and risk management and reporting. Valuation and accounting are performed by a top-tier independent fund administrator.

Independence of Risk Control

Risk management is a vital activity for the whole group, with risk control overseen on a constant basis by the experienced Risk and Operations team. The independence of the risk manager function is ensured by operational and hierarchical independence from the investment committee and from the Investment Advisor. This dedicated risk management function applies strict procedures of risk control and measures on a daily, weekly and monthly basis using both internal and external systems. Borletti & Partners’ escalation procedures are multiple and straight-forward, with the aim of solving any potential conflicts in the best interest of our investors. Its reaction times are quick and, if a potential issue is not resolved, the board is advised within hours or immediately if needed.

Top-Tier partners

Borletti & Partners works only with established, respected, investment partners and service providers to provide the best possible service for investors. On the investment side, it has selected a group of trading partners and research providers, including top-tier financial institutions and niche players that specialise in a particular sector or geography. Borletti & Partners has also selected world class leaders for custody and fund Administration (Citi), Prime brokerage (Morgan Stanley and Citi) and Audit (Deloitte).

State-of-the-art Infrastructure

Borletti Group has invested in a state-of-the art IT infrastructure offering redundant data storage, secure distance access, business continuity solutions and disaster recovery plans. It has also invested in a customised portfolio management solution developed by Hedgeguard. This offers bespoke compliance and risk alerts as well as portfolio analysis and stress test tools.

Equity

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Fixed Income

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Alternative Investments

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Real Estate

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