Borletti Group

Real Estate

The real estate activity of Borletti Group was launched as a separate division in 2014 with the implementation of an opportunistic investment strategy beyond purely retail related assets.

Borletti Group is mainly focusing on Pan European small and mid size assets (5 to 50m EUR) with a value added approach.

Our value added approach aim to enhance investment returns through an active management of properties that may include refurbishments, leasing up of vacancies, change of tenants or repositioning.

Investments are currently concentrated in two verticals:

  • Commercial properties
  • Hospitality (focusing on 3 and 4 star Hotels and partnering with well-established operators)

Borletti group is also actively looking at Co-living and co-working opportunities as well as at new business models to improve real estate yields.

In the real estate strategy Borletti Group can invest alone or together with co-investors depending on the size of the asset.

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 in investing in three core sectors: retail, luxury/branded consumer goods and real estate with a retail component.

Since 2005, Borletti Group has led acquisitions that total over €3bn:

  • – 2005: la Rinascente (Italy), €0.8bn
  • – 2006: Printemps (France), €0.9bn
  • – 2016: Grandi Stazioni Retail (Italy), €0.9bn
  • – 2016: The Market (San Marino), €0.1bn
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 from many other private equity groups because it adjusts its investment horizon to suit the investment needs. 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 to achieve better results. Its aim is to act as support and accelerator of the companies’ CEOs and management teams. However, while Borletti Group participates in key strategic decisions it does not take a direct management role, leaving companies’ management teams in charge of the day-to-day operations.

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

Leading Italian department store with over €300m sales, 5,500 employees and a prime real estate portfolio

Investment History

  • March 2005: Acquisition of la Rinascente from IFIL / Auchan
  • Competitive auction with over 35 participants
  • Borletti Group’s equity partners: Deutsche Bank, Pirelli, Investitori Associati
  • June 2011: Sale of la Rinascente to Central Retail Corporation (Thai retail group)

Borletti Group’s Influence/Strategy

  • Revamping the stores, through major investments and product category reallocation leading to a successful repositioning
  • Played a key role in the acquisition phase with the seller and its advisors
  • Built a club with prominent private and institutional investors
  • Used it great expertise to grow the business
  • Selected new management team
  • Delivered credibility with regards to unions, media and other institutions
  • Negotiated with key brands

Results

  • Repositioning of the flagship and the group towards a different brand strategy (unsuccessful own brands were replaced by A-brands)
  • Strong operational improvement for continuing operations:
    • Sales CAGR of +3.5% in a global crisis context +4 points in EBITDAR between FY06/FY10
    • EBITDA multiplied by 8.5x over the period (71% CAGR)

Printemps

Leading French department store chain with €950m sales, over 5,000 employees and a prime real estate portfolio

Investment History

  • October 2006: Acquisition of “Printemps” from PPR Group
    • Proprietary confidential acquisition process with only three participants
    • Borletti Group’s equity partner: Deutsche Bank
  • July 2013: Sale of Printemps to Qatari investors

 

Borletti Group’s Influence/Strategy

  • Major investments to revamp the stores and product category allocation leading to a successful repositioning
  • Played a key role in the acquisition phase with the seller and its advisors
  • Built a club with prominent private and institutional investors
  • Used its great expertise to grow the business
  • Selected new management team
  • Delivered credibility with regards to unions, media and other institutions
  • Negotiated with key brands

 

Results

  • Successful repositioning of store network including the flagship store leading to a significant increase in sales productivity per sqm
  • Strong operational improvement:
    • Same store Sales 5-year CAGR of +4% in a global crisis context
    • +3 points increase in profitability
    • EBITDAR CAGR of +10%
  • Financial returns: 5.2x equity for BG investors with over 31.2% IRR [only insert if we have Rinascente]

Grandi Stazioni Retail

Operator of the 14 largest train stations in Italy with over €100m revenues, 95,000sqm of commercial area and 750m yearly visitors

Investment History

  • July 2016: Acquisition of Grandi Stazioni Retail from FSI Group and Eurostazioni.
    • Competitive auction with over 19 participants
    • Borletti Group’s equity partners: Antin Infrastructure, ICAMAP

 

BP drivers

  • Expand catchment area by increasing the appeal of the location
  • Upgrade existing offering through active retail management to increase spend per visitors
  • Increase conversion rate, optimizing layout plan and enhancing passengers flow
  • Introduce new contract / new rent mechanisms like concessions
  • Improve advertising management
  • Enlarge range of services to customers

The Market

Development of a contemporary and innovative Outlet Village in San Marino to create the “Next Shopping Experience”, involving leading fashion brands

Investment History

  • October 2016: Acquisition of the land to build the outlet
    • Borletti Group’s equity partners: DEA and Aedes

 

Key Milestones

  • Works started in November 2016
  • Expected opening in 2018

 

Main Features

  • 25,000 sqm (GLA) that will host approximately 100 stores
  • Up to 1,000 sqm (GLA) of Department Store
  • Food area of around 1,000 smq (GLA) with food market and high quality Restaurants/Bars
  • Catchment area of 9 million people, of which 2.8 m residents and 6.1 m tourists
Asset Management

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 and real estate operations.

Borletti & Partners launched a proprietary Sicav SIF structured in 3 different compartments:

Savile Global Lifestyle

This fund is managed internally and it is investing in listed equities operating in Retail, Luxury and Lifestyle sectors globally.

Savile Multimanager Defensive

This fund is managed though a multimanager approach with open architecture, actively selecting external investment managers and funds focusing on fixed income, yield and low volatility strategies.

Savile Multimanager Dynamic

This fund is managed though a multimanager approach with open architecture, actively selecting external investment managers and funds focusing on Equities, and alternative strategies.

Outside the funds, the asset management team is also selecting and investing directly the assets of the group in less liquid investment strategies like private debt.