Business Model

CataCap’s business model combines the virtues of classic private equity such as a disciplined approach to investments and due diligence with a distinct focus on operational value creation in the portfolio companies.
The “deal” is not the most important part to us. The key is what we can achieve in active interaction with management and employees to release the growth potential and to generate step changes in our portfolio companies.
The core feature of CataCap’s value creation model is our systematic

and consistent approach in the development phase to enhance productivity and promote growth in revenue and earnings. We focus on accelerating business development, promoting operational excellence, developing management competencies and implementing value creating CSR initiatives.
CataCap has an extended organisation in which our own staff is supplemented by our Operating Partners, Development Partners and Executive Advisors. The team allocated to each new investment is recruited from this extended organisation.

Catacap forretningsmodel

Investment phase

  • CataCap's partners all have in-depth experience with buying and selling companies.

    We apply the same approach and methodology in each individual case. That way, we ensure that all transactions are handled as smoothly and efficiently as possible.

    Our approach to acquisitions

    We consider a disciplined approach to the acquisition process to be a key driver of a successful transaction.

    We know how to walk the right balance between on the one hand completing a thorough and disciplined acquisition process and on the other hand distracting management of the target company as little as possible. Maintaining the focus on the day-to-day operations is just as important to us, as buyers, as it is to the management team. That way, nothing will be lost in the process.

  • Preparation

    We are always well-prepared when entering into an acquisition process.

    We prepare an analysis of the business, the market and the competitors already before starting a dialogue with a target company. In this process, we draw on our experience, our resources and our network. The analysis results in a preliminary assessment of the development potential and the extent to which we expect to be able to take the business to a new level.

    The preparation is crucial as we believe that a dialogue with a company which may potentially be a future business partner must be initiated on a reasonable and well-informed basis.

    Before contacting a company, we therefore have an expectation that the business and we may benefit from one another.


  • Investment case

    When we and the management team and owners of the company have agreed on initiating a process, we intensify our work. We enter into a close dialogue with management to build an in-depth understanding of the business and the potential for joint value creation.

    We also use advisors to help us review our investment case and supply market data and analyses on critical external issues in order to assess the development potential of the business, e.g. market growth and competitors.

    Mutual understanding is crucial

    Good chemistry and personal relations are important factors in the long-term partnership between the company and us. Accordingly, we focus on getting to know the management team and making sure that they get to know us and the way we work.

  • Completion

    When we have completed the analysis and assessment of the commercial issues, we will prepare our investment case which forms the basis of our decision to invest in the company. We will discuss the investment case with management to ensure that we are aligned when it comes to the aspirations and approach to developing the business.

    At this stage, we agree with the owners (and management) on key terms for completing a transaction. Subsequently, the confirmatory due diligence must be completed, as well as the drafting of the share purchase agreement and the shareholders' agreement.

    We always use external lawyers and auditors to complete the confirmatory due diligence and to finalise the documents. We only work with the best-qualified advisors within their fields in order to ensure high quality, consistency and an efficient use of resources. We do not want extensive reports, rather we focus on the essentials. In our experience, this will result in a shorter and more efficient process.

Development phase

  • CataCap's business model is based on the view that operational value creation is the key contributor to a successful investment – i.e. through the joint efforts and hands-on approach invested to take the company to a new level.

    In our experience, the best results are achieved by getting stuck in from the beginning of the partnership. The first three to six months will typically be characterised by a high level of activity.

    We have developed a distinct methodology for our approach at entry which includes:

    • Supporting business development
    • Scoping and investing in productivity enhancements
    • Assessment and improvement of financial controls, systems and reporting structure
    • Management assessment and development
    • Introduction of CSR principles
  • Business development and operational optimisation

    The first big task upon CataCap’s entry is to prepare a development plan which will be the portfolio company's road map for business development and operational improvements during CataCap's ownership period.

    In some cases the emphasis will be on growth initiatives, in other cases investments in productivity enhancements will take priority. However, one of the characteristics of CataCap is that we do not only deal with investments at the strategic level. We also dive into the boiler room to identify the initiatives to be taken to generate sustainable step changes in revenue and earnings.

    During this process, CataCap will provide external resources and act as a catalyst whereas the company’s management team at all times will be responsible for drafting plans and implementing solutions.

  • Management development

    With the ambition to step change the companies we invest in, we also need to take management competencies to a higher level. This applies to individual management competencies as well as the Company’s management processes.

    In our experience, a systematic and professional approach to management development – combined with a strong entrepreneurial spirit and an effective incentive programme – will create the best results.

    Accordingly, by using well-known methods and assisted by our Development Partner, we will assess the management potential of the company immediately following our entry. The conclusions serve as a basis for specific initiatives to strengthen the competencies of the individual managers – and for the ongoing development of the Company’s management processes.

    The overall objective is to ensure long term sustainability of the Company’s development. Equally, it is important to us that each individual manager benefits from the process.

  • CSR

    Our CSR work is based on CataCap's CSR policy and the individual Portfolio Company's situation.

    The purpose is to enable the companies to handle business-critical risks and opportunities in the best possible manner. The CSR initiatives must support the business development and value creation of the company.

    The CSR work has three overall success criteria:
    • Minimising risk in relation to value chain, products, services and reputation.
    • Realising   business opportunities especially in relation to the market position and employer brand of the company.
    • Optimising resources  to ensure a clear-cut business prioritisation of the CSR initiatives.


  • Board governance

    As the majority investor, CataCap will appoint a board of non-executive directors with the experience and competencies needed to support the realisation of the development plan.

    The chairman is typically recruited from among CataCap's Operating Partners or from our network of Executive Advisors. The chairman participates actively as a sparring partner to the management team and represents the active ownership in conjunction with the responsible CataCap partner.

    The chairman and the responsible CataCap partner constitute the chairmanship who will meet monthly with top management to review business performance against plans and to ensure the necessary follow-up.

    In addition, the board of directors consists of experienced executives with a special insight into the industry or the specific challenges of the company. The board will hold formal meetings at least 5 times a year. Moreover, the board members are expected to maintain a dialogue and advise management on specific issues outside the formal board meetings.

  • Strategic partners

    CataCap's strategic partners constitute our extended organisation and play a central part in the development of our portfolio companies.

    Operating Partners advise CataCap in relation to new investments and developments across the portfolio and participate on an individual basis as active board members of the portfolio companies – often as chairmen.

    Development Partners are our strategic business partners within business development, operational excellence, management development and CSR, and we work closely with these partners when it comes to the development of the portfolio companies.

    Exceutive Advisors is a network of business managers who are informally attached to CataCap. Together they represent extensive experience within a number of different industries and business types and are therefore candidates for board positions in portfolio companies whose challenges match the experience of such candidates.

Governance

  • Investment decisions

    Investment decisions in CataCap are made by the Investment Committee consisting of the partners of CataCap Management A/S. The Investment Committee is authorised to make all decisions on behalf of the Fund, and all decisions require consensus among the members of the Investment Committee.

    Prior to any investment decision, the investment team consults CataCap's Investment Board before the recommendation is presented to the Investment Committee. CataCap's Investment Board consists of Operating Partners.

    CataCap is based on a traditional Danish limited partnership (K/S) structure in which the Fund's investors in a transparent structure are limited partners having made a capital commitment.

    CataCap General Partner I ApS is the general partner. CataCap Management A/S has entered into a management agreement with the Fund with respect to performing the Fund's management duties and all other activities. The management company is owned by the partners of CataCap.

  • CSR

    CataCap operates in accordance with international guidelines for Corporate Social Responsibility ("CSR"). CataCap aims at operating in an active, disciplined and responsible manner in respect of CSR initiatives in Denmark and internationally. Accordingly, CataCap's and the Fund's CSR efforts are based on the highest standards of compliance.

    CataCap has adopted the UN Global Compact as the framework applied by us and our portfolio companies to ensure a continuous development of CSR.

    Moreover, CataCap follows the DVCA's guidelines for responsible ownership and corporate governance at both fund and portfolio company level. Guidelines on corporate social responsibility defined by the European Venture Capital Organisation (EVCA) are complied with to the extent that they are compatible with the Danish guidelines and relevant to CataCap’s operations and investments.

  • Annual reports etc.

    Catacap 1 K/S // cvr. nr. 34885079
    Download 2013 // 2014 // 2015
    Management: The company is bound by the sole signature of the general partner – Catacap General Partner I ApS

    Catacap Management ApS // cvr. nr. 33589913
    Download 2011 // 2012 // 2013 // 2014 // 2015
    Board of directors: Jesper Jarlbæk, Chairman, Vilhelm Hahn-Petersen, Jens Hahn-Petersen, Peter Ryttergaard
    Executive board: Vilhelm Hahn-Petersen, Jens Hahn-Petersen, Peter Ryttergaard

    Catacap General Partner I ApS // cvr. nr. 34884498
    Download 2013 // 2014 // 2015
    Executive board: Vilhelm Hahn-Petersen, Jens Hahn-Petersen, Peter Ryttergaard

  • CataCap complies with DVCA guidelines

    CataCap is a member of the DVCA (Danish Venture Capital and Private Equity Association) which, on 25 June 2008, published guidelines to create a framework for more openness and transparency for private equity funds. The guidelines were updated on 1 January 2011.

    CataCap complies fully with these guidelines.

    The guidelines set out a number of requirements for the information which is made available by CataCap or to which access is granted through our website as it appears from the list below. By clicking on the links, you will find the relevant information elsewhere on our website.

    Read more about the guidelines here