Alvarez and Marsal: PE for SMEs

Question 1

What are the key principles behind A&M capital investments?

Answer 1

1. Partnering with founders and strong management teams is a cornerstone of our investing philosophy.
2. We do not get involved in the day-to-day running of our portfolio businesses but we are actively involved at board level as a sounding board, strategic and sparring partner to management.
3. Align management and shareholder incentives by inviting key members of management to continue to be or become significant shareholders in the company.
4. Invite management to participate in a management equity program.

Question 2

What are the key sector attractions for IT for A&M capital?

Answer 2

1. Strong and steady growth
2. Large and fragmented market, ripe for domestic and cross-border consolidation
3. Sticky client relationships and long-term contract/framework agreemens provide high revenue visibility and recurrence with overall stable margins.
4. Defiensive and resilient business model, as proven by the pandemic. The flawless and uninterrupted operation of IT systems is critical for business continuity.
5. Attractive cash flow conversion due to limited capex requirements.

Question 3

What are the services that Ayesa (from A&M capital case study) provides?

Answer 3

1. Project Management
2. Design services