Pepper Motion wants to convert tens of thousands of used buses and trucks with diesel engines to electric drives. The Würth Group is on board as a strategic investor.

High fuel prices could further accelerate the conversion of trucks and buses to electric drives. But electric trucks are currently hard to come by and expensive to buy for the first time.

Retrofitting could be one solution: The company Pepper Motion is electrifying used diesel commercial vehicles. "We want to retrofit tens of thousands of trucks and buses over the next few years," CEO Andreas Hager told Handelsblatt.

To meet climate targets, 2.2 million alternatively powered commercial vehicles weighing more than 7.5 tons would need to be on the road in Europe by 2030. But manufacturers might just be able to deliver 200,000 new vehicles by then.

"If we don't electrify existing vehicles, we have no chance of turning around fleets," Hager says. That's because a bus with a diesel engine that is newly registered today will still be running in 2050, he adds.

The willingness to convert is certainly there in the industry. For one thing, the high fuel prices mean that it pays to operate the system quickly, and there are also massive government subsidies. According to a study by Bain & Company, the majority of fleet managers in Europe already want to prefer buying trucks that run on electricity or hydrogen in three years. "Diesel is gradually becoming a discontinued model," said Bain partner Jörg Gnamm.

However, manufacturers still have comparatively few electric models on offer. MAN, for example, has not yet produced a single all-electric semitrailer truck in large-scale production. In addition, many fleet managers still shy away from the acquisition costs. Pepper wants to solve both problems. "We give the used commercial vehicle an environmentally friendly second life as an electric vehicle," says Hager. The electrification kits are the "most cost-effective solution," he adds.

The company, which was spun off from Intech, has now been able to convince prominent investors of the business model. Hamburg-based family office Lennertz & Co. is leading the latest round of financing. The Würth Group is also involved. The majority shareholder remains Friedrich & Wagner Holding, which has been involved since the company was founded. The proceeds of just under EUR 30 million will be used to finance the ramp-up of series production with strategic partners, further technological development, expansion into additional foreign markets and the establishment of an ecosystem of mobility services.

Potential customers for the conversion include major existing fleet owners such as transport and haulage companies, for whom it is difficult to meet the emissions targets required by 2030.

Initial conversion solutions for the Mercedes Citaro, Actros and Atego models are currently available. Vehicle models from MAN and Iveco are to be electrified in series production starting next year. Pepper uses an electric portal axle from ZF. The technological heart is the Vehicle Control Unit developed in-house, which controls everything.

Pepper has already won its first pilot customers; this year, dozens and next year hundreds of vehicles are to be equipped with electric drives. In total, Pepper aims to sell more than 1,000 electrification kits per year from 2024. By 2030, there should then be up to 60,000 converted and equipped vehicles.

Sales are expected to grow correspondingly quickly. According to industry estimates, they should be around 14 million euros this year, as the series is just starting up. By 2026, revenues are expected to exceed one billion euros.

Pepper says it can convert a city bus in six to eight weeks. After conversion, the buses have a range of about 250 kilometers.

However, at 300,000 euros, the conversion is expensive. However, Pepper is convinced that the whole thing is already paying off for fleet operators. After about ten years, the decision has to be made whether to replace an old vehicle.

A new diesel bus costs 814,000 euros over ten years, including purchase and operating costs, they argue at Pepper. This is still based on the lower diesel prices before the Ukraine war.

Despite the supposedly high purchase price, the conversion would bring savings of 144,000 euros in ten years of operation; including subsidies, it could even be more than 400,000 euros. A new electric bus would also be more expensive because of the higher purchase price.

The German government subsidizes the switch to electric drives in a variety of ways. For example, there are special depreciation allowances for e-utility vehicles and a subsidy program for the purchase of electric buses in local public transport.

If certain criteria are met, the conversion is now treated the same as a new purchase. "The retrofitting of conventionally powered commercial vehicles to alternative drives can make a significant contribution to the market ramp-up of alternative drives in road haulage," said the Federal Ministry of Transport, which has set up a retrofitting task force specifically to define safety and quality standards.

Whether the retrofit system will catch on across the board remains to be seen. Given the turbulence of the past few years, freight forwarders have only thin capital covers. Smaller companies in particular are skeptical about whether the retrofit will pay off, especially since no one can calculate electricity prices over the next few years.

Pepper also wants to offer "pay per use," a kind of rental model in which customers pay a price per kilometer for the package of vehicle, including maintenance, charging infrastructure and even fleet management.

Pepper sees opportunities not only in Germany, however. A few weeks ago, the company announced its market entry in France. By 2030, Pepper plans to equip around 5,000 electrified buses and trucks larger than 7.5 tons in the French market in cooperation with REV Mobilities. A subsidiary has also been established in Austria. The company is also currently working on the development of a production-ready drive system with fuel cells.

They see "high growth potential for Pepper, not only in the domestic and European markets, but also worldwide in a market that will grow by leaps and bounds in a very short time," said new investor Philipp Lennertz of Lennertz & Co.

Pepper CEO Hager is convinced that the development will be further accelerated by high fuel prices and geopolitical upheavals. "Move away from oil and gas," he says, is the sign of the times. "It's a new age that's emerging."

© All rights reserved. Provided by Handelsblatt GmbH – ein Unternehmen der Handelsblatt Media Group GmbH & Co. KG

Our colleague Oksana Tiedt gave an interview to the British "Insider" on the development of our blockchain venture investments. As early as 2017, our venture team was involved with the blockchain and the investments opportunities of corresponding start-ups. In her interview Oksana makes a deep dive with crypto journalist Kari McMahon about the investment philosophy of our fund of fund and the importance of the right manager selection.

You can read the full interview on the "Insider" website (see link below).

A private equity fund initiated by the Hamburg-based family office Lennertz & Co. has acquired a minority stake in the innovation leader for electrification technology in the commercial vehicle sector. pepper motion GmbH is the world’s first digital OEM in the automotive industry for the production-ready conversion and retrofitting of trucks and buses.

The Denkendorf-based engineering firm successfully completed a Series A financing round worth nearly EUR 30 million at the end of March 2022. Lennertz & Co. was the lead investor here with a capital injection of approx. 40%. Other investors include among others the Würth Group.

“As an entrepreneurial and owner-managed family office, pepper won us over with its unique technology in the production-ready retrofitting of trucks and buses but also with the engineering expertise its partners have gathered in the automotive sector over more than 20 years,” says Philipp Lennertz, Managing Partner at Lennertz & Co. “Technology and service play a huge part here in reaching global climate goals. We thus see great potential for pepper to grow, not only in the domestic and European markets but also internationally in a market that will rapidly become more and more important within a very short time.”

Capital for Series Production and Further Markets

In addition to further developing the company’s own technologies, the increase in capital is specifically meant to promote the ramp-up of series production with strategic partners as well as to support the phase of market entry in other European countries that has already commenced. Germany, France, Italy, Austria, and Poland in particular count among pepper motion’s key European markets.

Potential customers include large existing fleet owners, such as transportation or trucking companies, for whom it is difficult to meet the 2030 emissions targets for their fleets. A major advantage for pepper motion is that the company’s multi-award-winning retrofitting concept is currently considered unmatched on the market when it comes to sustainability and total cost of ownership.

“The proof of concept has long been in place thanks to our vehicles and etrofit electrification kits. As a trendsetter, we are at the forefront of the international retrofitting industry and set the standards for German engineering, innovation, and quality, which fleet operators active in the public transport and transport/logistics sectors can rely on,” says Andreas Hager, CEO at pepper motion.

About pepper motion

The German privately financed company with headquarters in Denkendorf and offices in Garching near Munich, Paderborn, and Vienna (Austria) employs more than 100 people. As the first digital OEM worldwide (without its own warehousing and manufacturing), pepper offers innovative solutions for the electrification (retrofitting) of used and new commercial vehicles such as trucks in distribution transport, buses in local public transport (LPT), and municipal vehicles.

With its holistic approach to telematics, charging infrastructure, fleet management, and autonomous driving, the company designs quickly implementable and cost-efficient solution packages for sustainable mobility transformation and a “second life” for existing commercial vehicles.

About Lennertz & Co.

As an entrepreneurial, owner-managed family office, Lennertz & Co. is fully focused on the success of its clients’ investments. Our investment recommendations are in line with the personal preferences of clients, who benefit from the independence of Lennertz & Co. and the exclusive nature of its investment opportunities.

Lennertz & Co. also has a large number of permits from the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and thus fulfills the numerous qualitative and quantitative requirements of both the BaFin and the German Federal Bank (Bundesbank).

Lennertz & Co. shares the demand of its clients for fast, well-founded, and confident decision-making. On behalf of clients, the expert team at Lennertz & Co. – which can point to decades of experience – carefully reviews opportunities as they emerge in the segments of venture and growth capital, private equity, and blockchain. Moreover, the company’s advisory board is staffed by reputable specialists in the fields of industry, venture capital and private equity, including Prof. Dr. Heinrich von Pierer, Prof. Dr. Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg, and Florian Heinemann.

A private equity fund initiated by Hamburg-based family office Lennertz & Co. has acquired a minority stake in Ascend Sport Technology, the global market leader for digital perimeter advertising in football. The Swiss company has a patented digital overlay technology, which is based on artificial intelligence (AI) and marketed via the portfolio company AIM Sport. The innovative technology allows broadcasting of the stadium advertising to be overlaid in the television signal. Thus, partner companies can place entirely new, targeted advertising and, as a result, generate more value. With this technology, Ascend Sport Technology has a clear unique selling point in the market.

Advertising boards in sports arenas are considered premium advertising space, as they cannot be "clicked away" by TV viewers. This is reflected in strongly growing advertising revenues and is an important source of income for football clubs. As an innovative advertising medium, it can be used nationally and internationally in front of an audience of millions. AIM Sport has long-term contracts with more than half of the leading football clubs in Europe, including Real Madrid, Paris Saint-Germain, AC Milan and many more clubs in the major European leagues.

Ascend Sport Technology was founded by Bernard de Roos in 2011. He was one of the initiators of the UEFA Champions League in the early nineties. The digital overlay technology makes it possible to virtualize the stadium perimeter for different language or cultural areas. The goal is to use the technology to send individualized advertising to almost every household.

"We have known the business model since 2016 and have long-standing personal and professional relationships with the management of Ascend Sport Technology. The AI-based software promises high revenue potential, not only because of the ability to personalize advertising, but also because of its scalability into other key sports markets such as basketball or ice hockey," said Erol Ali Dervis, private equity manager at Lennertz & Co.

Bernard de Roos, CEO of Ascend Sport Technology says: "We are delighted to have Lennertz & Co. as our new anchor investor. The family office has a high level of expertise in the US market and a large network in digitalization. These factors were decisive for us in the entry of Lennertz & Co. in order to realize the next growth steps into further sports markets worldwide as quickly as possible."

About Ascend Sport Technology

Ascend Sport Technology is a holding company under whose umbrella top-class sports technology companies have been established. Its work includes artificial intelligence, digital playout of targeted advertising and Big Data. Highly skilled teams of companies and engineers thus offer rights holders in professional sports exceptional growth. Ascend Sport Technology's clients include top clubs from almost all European football leagues, including Real Madrid, Paris Saint-Germain and AC Milan.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

Lennertz & Co. has agreed with IK Partners (IK) on the sale of a majority stake in the medium-sized Stein HGS Group. The European private equity firm plans to use its IK Small Cap III Fund to acquire a stake in the fully digitalised specialist for barrier technology, construction site and operating supplies, signs, street furniture and traffic technology.

Through a reverse investment, Lennertz & Co. and company founder Bodo Stein will retain a stake in the company to further accompany its future growth. The parties agreed not to disclose the financial terms of the transaction.

Stein HGS was founded in 1999 by Bodo Stein and is headquartered near Hamburg. Since then, the company has become the leading online retailer in its market segment and employs 30 people.

The company serves a wide range of long-standing customers from the private and public sectors, including small and large construction companies, local tradesmen, municipalities and facility management companies. With the support of Lennertz & Co. since 2019, Stein HGS has been able to significantly expand its product range to around 200,000 individual items and increase its presence in key markets.

Through its new partnership with IK, the company aims to broaden its customer base and further expand its e-commerce offering and product range. In doing so, the company will continue to be led by Managing Director Stephan Otte and his team.

"We firmly believe that the partnership between Stein HGS, Lennertz & Co, founder Bodo Stein and IK forms a solid basis on which we can further develop and implement our growth strategy. Since our founding, we have always achieved the goals we set ourselves, and with the combined efforts of all the investors involved, we are confident that we will continue to realise our joint strategy in the future," says Managing Director Otte.

Erol Ali Dervis, private equity manager at Lennertz & Co. said, "Stein HGS can be proud of the progress it has made since 2019. Together, we have driven growth and capitalised on the many opportunities that exist in a fragmented market in which the company operates. With IK joining as an investor, we look forward to continuing on the path we've been on consistently."

Ingmar Baer, Director at IK Partners and advisor to the IK Small Cap III Fund, continues, "Stein HGS occupies a leading position in a growing market characterised by a shift to online shopping and the company's strong focus on providing first-class customer service. We look forward to working with Stephan Otte and his team to further expand the product offering and customer base and enter new markets."

The closing of the transaction is subject to legal and regulatory approvals.

About Stein HGS

The company was founded in Hamburg in 1999 and is now based in Seevetal. The fully digitalised specialist for barrier technology, construction site and business supplies, signs, street furniture and traffic technology employs 30 people and has over 17,000 customers every year. More than 10,000 core products and around 200,000 product variants are on offer. Direct delivery from the manufacturer to the customer enables a business model without tying up capital in working capital, machinery or warehouses and is therefore fast-growing and scalable.

About IK Partners (IK)

The company is a European private equity firm focusing on investments in the Benelux, the DACH region, France, the Nordic countries and the UK. Since 1989, IK has raised more than €14 billion in capital and invested in 160 European companies.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

The Hamburg multi-family office Lennertz & Co. is launching its third venture capital fund with a European focus, Venture Europe III. The new edition is also possible because the predecessor from the same fund series was closed. Within the framework of the strategy, Lennertz & Co. invests at least 70 percent of its assets in selected target funds such as Cherry Ventures, DN Capital, Northzone, Project A or Target Global.

The valuations of the companies from the target funds rose sharply in Venture Europe Fund II, explains Philipp Lennertz, managing partner of Lennertz & Co. That is why the fund was closed. For example, the managers of the target funds held investments in the neobroker Trade Republic, which is considered the most valuable start-up in Germany and one of the most valuable fintechs in Europe. Other prominent investments were the event platform Hopin, the delivery service Flink or the foreign payment service provider Remitly.

In addition, direct investments in companies such as the digital insurance company Wefox or the AI start-up Konux would have driven the performance of the second venture capital fund. Lennertz wants to continue the strategy in the successor product: "We see that the local venture capital scene is well on the way to growing up. Young European companies with first-class digital business models currently offer a high potential for success, which we want to participate in with our clients." The first investments have already been made.

Stefan Kamm, long-serving head of the Single Family Office at Heinz Hermann Thiele (Knorr-Bremse) has joined the Lennertz & Co. team. “I am delighted to announce that Stefan Kamm is bringing his wealth of expertise and extensive network to Lennertz & Co. He will be focusing on cooperation agreements in the Single Family Office area,” says Philipp Lennertz, Managing Partner at Lennertz & Co.

Stefan Kamm can look back on a career spanning more than 30 years. Over that time his appointments have included Deutsche Bank in Munich and New York, M.M. Warburg & Co. and Berlin & Co. KGgA, where he was responsible for general operational and strategic management on behalf of families and foundations. In 2006, in his capacity as head of the Single Family Office for the Thiele family, he assumed responsibility for assets worth billions as well as liquid and non-liquid investments.

The Lennertz & Co. team now has 25 employees. Lennertz & Co. offers clients access to investment opportunities in such areas as venture and growth capital, private equity and blockchain technology.

“Over recent years, I have constantly been on the lookout for exclusive investment options in the shape of direct investments or special funds in the areas of venture and growth capital and private equity or thematic funds like blockchain. I am pleased that Lennertz & Co. has given me the chance to access an offering unlike anything else on the market,” says Stefan Kamm.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

The multi family office Lennertz & Co. in Hamburg has started the second generation with the Blockchain Fund II. The fund of funds should be similar to its predecessor product and invest in up to ten of the highest-quality blockchain venture funds with a focus on Europe and the U.S. Through the target funds, investors’ money flows into more than 200 companies whose developer teams are creating the infrastructure for Web 3.0 on the basis of open, decentralized, and more robust technology.

Target funds that primarily invest in European companies are the Berlin early-stage fund Greenfield One or Fabric Ventures based in London. The U.S. funds include top names such as Coin Fund, Multicoin Capital, and Polychain Capital.

“The sharp rise in investment valuations let us close the first blockchain fund ahead of schedule and simultaneously set up the successor to continue giving our investors access to the tremendous potential of young companies and networks focusing on blockchain technology,” says Philipp Lennertz, Managing Partner of Lennertz & Co.

The family office based in Hamburg has received EUR 30 million in capital commitments from its clients since December 2020 for the Lennertz & Co. Blockchain Fund I. The fund offers an opportunity to get invested in companies that are building the infrastructure of this new ecosystem on the basis of blockchain technology.

The Hamburg-based family office Lennertz & Co has started a fund of funds for investors to invest in companies that are using blockchain technology to build the infrastructure of Web 3.0. The Lennertz & Co. Blockchain Fund I has up to eight blockchain venture funds in the portfolio. This provides exposure to more than one hundred companies. The geographical focus of the investments in the portfolio is Europe and the U.S.

“Crypto and blockchain technologies offer enormous potential, and developers have left the period of initial growing pains far behind them. Now it is time to build the foundation for Web 3.0,” explains Philipp Lennertz (in photo), Managing Partner of Lennertz & Co.

Blockchain is an open, decentralized, and robust technology, according to Lennertz & Co. The family office views Web 3.0 as the next step in the evolution of the internet and the start of a paradigm change.

“To date, large platforms are still dominating with their marketplaces spanning the globe. They act as intermediaries between supply and demand, obtaining industry, market, and consumer data that they use to establish their market power at the present time,” the family office continues. Web 3.0, by contrast, promises a direct connection between suppliers and users. “All participants in a transaction are directly connected with each other without middlemen and are mutually incentivized,” says Philipp Lennertz.

Blockchain content is transmitted securely and directly from person to person. So far, blockchain has mainly been used in the sectors of hosting, finance, and gaming. “In the future, the technology will be relevant for every industry and change them disruptively. For example, blockchain technology is advancing the Internet of Things by enabling secure data exchange between devices in an IoT network and thus a wide range of new business models,” explains Philipp Lennertz.

One of the first target funds of Lennertz & Co. Blockchain Fund I is the Berlin early stage fund Greenfield One, which focuses its investment on companies based in Europe. In addition, it is expected to make investments in the U.S. through the American venture capital firm Polychain and other U.S. funds.

Closed-end real asset funds were once popular with private investors in Germany. However, due to high costs and a lack of transparency, they fell into disrepute and have lost importance. Because Europe also lacked products that combined long-term asset accumulation and the financing of long-term growth projects, the European Union launched the "European Long-Term Investment Fund" (ELTIF) in 2015 as a direct-investing real asset fund, primarily for private and smaller institutional investors. In October, however, the Commission began a consultation process on the reform, not least because people are dissatisfied with its success. So far, only 28 funds have been launched across Europe, managing a total of less than two billion euros.

The suggestions for improvement made so far are primarily directed against rigid requirements. For example, there is a call for no longer specifying a term or being able to buy and sell shares on a continuous basis. There are also calls for more than 30 percent to be allowed to be invested in funds, including equity funds, and for fund of funds structures to be permitted. "A fund of funds offers greater diversification and is also more cost-effective in its conventional form," says Philipp Lennertz, founder of the Hamburg-based multi-family office Lennertz & Co. Due to the restrictions of the ELTIF, there is a danger, especially in the private equity sector, that "only the leftovers" are put into an ELTIF.

Much praise from providers

On the other hand, the ELTIF providers seem satisfied with the concept. "We were one of the first managers to come to market with an ELTIF vehicle, and we consider it a success," says Torben Ronberg, portfolio manager at Muzinich & Co. Benjamin Fischer, responsible for partnerships in the private investor business at Blackrock in Germany, adds: "For us, the ELTIF is a success story that we want to continue in the future." Commerz Real, which is responsible for real asset investments within the Commerzbank Group, also launched an ELTIF in the fall. The "Klimavest" [a portmanteau for "climate investment"] is intended to make a positive contribution (impact) to the transition to a low-carbon economy, primarily through investments in the field of renewable energies. "The ELTIF is the right approach for a real asset fund," says CEO Johannes Anschott, singing its praises. "Under German law, no impact real asset fund is currently possible as an open-end vehicle. The ELTIF sets the highest standards, not only in investor protection, compared to the former world of closed-end funds, from which we exited at an early stage. Private investors regularly don't want that kind of thing anymore."

What is an ELTIF?

A European Long-Term Investment Fund, or ELTIF, is designed to enable small investors to invest in illiquid assets. The statutory minimum investment is 10,000 euros. Investors with financial assets of less than 500,000 euros may invest a maximum of 10 percent of their financial assets in an ELTIF. The fund must have a defined maturity date. At least 70 percent must be invested in eligible assets: Corporate equity investments or loans, long-term securities, or shares in ELTIFs and similar funds (EuSEF and EuVECA). Borrowing is limited to 30 percent of the fund's volume. The shares are recorded in a securities account. Assessments are made on a quarterly basis. mho.

Nevertheless, the providers have a few suggestions for improvement. "In our view, some investment restrictions in the fund's regulation should be changed," Ronberg says. This facilitates targeting returns that could provide a sufficient premium for the closed format, he said. He is not the only one to advocate, for example, for allowing more loans secured by investment properties to be taken out, but above all for more commitment: "In our view, the promotion of the ELTIF vehicle should be strengthened and supported in line with the way UCITS vehicles are supported by the regulatory authorities." Small things can be adjusted, Anschott also says. The minimum limit of ten million euros for an asset "can be developed;" in addition, the limit of financial assets and the minimum investment of 10,000 euros are rather narrow. "The basic idea of a fund is to enable people of average wealth to participate in assets that would otherwise remain inaccessible to them," the Commerz Real CEO explains.

Markus Pimpl, responsible for the ELTIF at the Swiss Partners Group and specialist for illiquid investments, is more straightforward. The company is one of the ELTIF pioneers. "The basic idea is top notch," he says. "The rules make sense and should remain implemented." Of course, things could be improved; for example, he believes that the "social compatibility" requirement for real estate is too vaguely formulated, and the preferential tax treatment of country-specific vehicles in some member states is disadvantageous for the ELTIF. But more than reform, he says, patience is needed. Initially, the product also required explanation in sales. That has changed, he explains, because interest has grown so that sometimes it no longer seems to be a question of what, but only of how and how quickly. Fischer also confirms this: "We see that in the German market, demand for private market investments in the form of the ELTIF is growing strongly. Infrastructure will be the next item for us to offer in an ELTIF."

Pimpl resists, above all, attempts to water down the product. "There are some requirements to launch an ELTIF. After all, the product didn't fail just because some can't make it work in their favor. There is a question, however, about the extent to which you dilute the main goal of investor protection when some who have raised only liquid funds for decades and are now opening up to the idea want to influence regulation in their favor." Pimpl rejects fund of funds structures, for example: "The Commission wanted full fee transparency throughout the life of the product because it is an illiquid product. This is absolutely legitimate; the customer should know that. But with a fund of funds, no matter how good, the fee level is unclear at launch, and the additional fee layer depresses returns." However, a fund of funds is easier to manage and quicker to set up than an ELTIF. Still, the trend is moving away from that, even in the private equity sector.

Illiquid assets as a core feature

The fact that ELTIFs initially had high minimum investment amounts was due to the fact that wealthier customers generally had a better understanding of a sophisticated product. These investors did not necessarily need an ELTIF either. Lennertz goes one step further. "The traditional private equity investor doesn't want such strict asset mix rules. Successful private equity funds don't need a new vehicle either."

But investors with fewer assets do; Ronberg agrees: "A key differentiator of ELTIFs is that they provide access to asset classes that historically have not been available to a broader investor base." The purpose of the ELTIF is to provide a regulated product for illiquid investments that protects private investors, Pimpl says. Now, he explains, we have reached the point where this is working, and a number of private-investor-friendly products are about to be launched. "Our new ELTIF has a minimum investment of 20,000 euros. And with 60 investments, it's sufficiently diversified." There is no need for liquid assets for this, as there is enough diversity in the illiquid area. In fact, liquid investments make no sense for the ELTIF.

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Private equity, i.e. the large-scale direct investment in private companies, has become increasingly popular since the financial crisis. While USD 173 billion flowed into private equity funds globally in 2010, that amount has more than tripled in recent years. This is partially due to the low interest rate environment, which makes private equity more attractive to investors. “If you want to achieve higher returns than you generate with money markets alone, there is no real way to get around alternative asset classes,” says Detlef Mackewicz, Private Equity Consultant at Münchener M&P.

Private equity promises not only higher returns than standard equity investments. The so-called illiquidity premium refers to the disadvantage that you cannot sell such an investment as quickly as you can with publicly traded stocks. However, investors also enjoy greater stability in their portfolio. This is because the equity investment value is only determined on a quarterly basis and is affected less by the volatility on public stock markets. Since 2000, the share of private equity as a percentage of “public equity” in the portfolios of institutional investors has risen from 1.5 to just under 4 percent.

Private equity is frequently equated with the PE type called buy-out funds, which acquire companies in whole or in part, increasingly with the goal of raising their value by making operating improvements and selling them for a profit. Buy-out funds have typically generated annual returns of more than 10 percent over the last 30 years, but with immense fluctuations of more than 40 percentage points. Funds for equity investment capital have achieved substantially lower returns at 6.6 percent in the U.S. and only 3.6 percent in Europe.

The corona crisis has also been challenging for the private equity business. Funds have received around USD 190 billion since the middle of August, according to Pitchbook, a service provider in the sector. That is “historically strong,” if we exclude the record period from 2017 to 2019.

By no means is sentiment negative, however. “The declines of 5 to 10 percent in value that funds saw in the first quarter had been reversed by September. Some funds have even risen. So, not much has actually happened here,” says Mackewicz. Older funds have been affected more, he continues, because managers had recent experience preparing for a crisis.

Ferdinand von Sydow, Managing Director at HQ Capital, the private equity arm of the Harald Quandt Group, sees changes occurring more in the structure of the business. 60 percent of the funds have gone into existing investments and companies in the first half of the year, in the form of additional financing or add-ons. This is a very high percentage and certainly to be viewed as a reaction to Covid-19. “We have also been more active here. There is a large number of co-investment options. However, you have to pay careful attention to quality, as you do in the secondary market. But it is worthwhile checking whether such an add-on, which looked even more expensive eight or ten months ago, has become more attractive.

New business has slowed substantially in the meantime. In part, that is because meetings to get acquainted and the due diligence for acquisitions are not possible on site or only possible with great difficulty. The effect of the strict restrictions on personal contact, which is very important in the sector, can be seen most clearly in sales, says Mackewicz. The number of so-called exits has dropped from 2,212 in 2019 to just 776 in the current year – just above the number in 2009, according to Pitchbook. No investor wants to sell at a discount, so they limit themselves to waiting and portfolio management before hard decisions have to be made, according to the analysts at Pitchbook. Philipp Lennertz, founder of the Hamburg multi-family office Lennertz & Co., views this more pragmatically. Fund managers simply have a lot of challenges with the companies, as far as he sees it, whether they are suffering from the crisis or profiting from it on a large scale.

New fund providers are also having a difficult time. “Like many others, we as investors are also relying more on established business relationships and are concentrating on trusted partners. Preference is given above all to managers who have already handled crises well. Investors currently view the private equity sector as strong, adaptable and flexible. Naturally, it is difficult for new players to provide evidence of this.”

One thing is not lacking in the sector: money. Pension funds and church institutions are investing less, von Sydow says, probably because they have suffered in part substantial loses in income. But demand continues to be strong. “New investors now have difficulty investing in the funds of top firms because their regular investors have been adding to their investments,” says Lennertz. That leads to acquisition pressure in the sector, he continues. In this regard, 2020 was a lost year for funds that were in the investment phase at this time, according to him. “Pressure may cause decisions to be made that are not sensible,” Lennertz fears.

There are high hopes for the coming year. Lennertz, for example, believes that 2021 could be a new record year, while von Sydow prefers a wait-and-see attitude at the present time. The greatest opportunities are seen in digitization. All observers believe that accumulated, uninvested funds or “dry powder,” will flow into this sector. It is a trend that began some time ago and has accelerated as a result of the pandemic – almost too much, says Lennertz. There will still be some difficulties, say the experts. “Only when the tide goes out do you discover who's been swimming naked,” says Mackewicz, quoting Warren Buffet. “Then it will become evident where flaws have been covered up.” This will not be an “enormous wave” and the process will also unfold slowly after the crisis begins to recede. And isolated losses in funds will be possible to deal with due to their diversified portfolios, he explains.

“There will also be opportunities, for example in the area of restructuring,” says von Sydow. In Germany, this will start becoming an issue in April when bankruptcy filings resume again, according to Lennertz, who also foresees political support for involvement of the sector. Jim Barry views it similarly. The managing director responsible for investments at Blackrock Alternatives Investors said in regard to the elections in the United States: In comparison to what was to be expected in the case of a Democratic “blue wave,” the scope and amount of any fiscal stimulus should now be lower. “The economic consequences of the pandemic should be drawn out and result in investment opportunities with distressed assets.” Private equity always profits from price uncertainty in turbulent times, says Sydow in summing up the situation. “In a calm market with perfectly priced assets, it is difficult to find good quality at reasonable prices.” A major topic should also be sustainable investing. Only because of corona have we not reached this point already in 2020, according to von Sydow. Investors are under pressure from all sides to demonstrate a social benefit from their capital investments, he adds.

It is not easy to be a private investor in private equity. The funds of well-known private equity firms such as KKR or Blackstone require minimum investments in the double-digit millions. The sums are somewhat lower for investments with firms such as HQC or Feri Trust, which allow smaller institutional and larger private investors to participate. The hurdles are even lower for specialized investment boutiques such as Circle Eleven or fintechs. The digital asset manager Liqid offers closed-end umbrella funds; and the fintech Moonfare facilitates so-called fractional investments in individual large funds. In the meantime, the minimum investment sum here is a six-digit figure. With a lower limit of 50,000, this makes a fund from Schroeders almost revolutionary. The reason is in part that these funds are reserved for so-called qualified investors due to investor protection, i.e. ultimately investors with more assets.

Private equity umbrella funds with low minimum investments flourished in Germany for a while. But their benefits are disputed. Administration causes additional costs, and many of these umbrella funds have already run for a long time. This reduces returns and tends to erode the illiquidity premium. An alternative is to invest in the equities of private equity firms and publicly listed exchange traded funds (ETFs) for this. However, this is ultimately “public equity” again, which is subject to the laws of the securities markets. Furthermore, there are a handful of publicly listed investment trusts in the UK. Relative to the shares of private equity firms, these trusts offer a direct investment, but are naturally also subject to the laws of the market. For example, the price of BMO Private Equity Trust dropped 45 percent from its 20-year high as a result of the corona crisis. If you ultimately choose a real private equity instrument, you are bound to it for the long term. In the first few years, funds are successively drawn down, and only gradually do you receive returns. As a result, a private equity investment only generates noticeable yields after several years.

© All rights reserved. Frankfurter Allgemeine Zeitung GmbH, Frankfurt. Provided by Frankfurter Allgemeine Archiv

RapidAI, the worldwide leader in advanced imaging for stroke, today announced a $25 million Series B round of funding by Lennertz & Co. Building on years of profitability, these additional funds will accelerate the company’s strategic growth initiatives around the world.

Founded in 2011, RapidAI makes the most-widely used advanced cerebrovascular imaging products for patient care, research, and clinical trials. This funding will support the continued advancement of the Rapid® platform and world-class clinical products. RapidAI clinical products help save lives, RapidAI workflow and messaging technologies help stroke teams save time, and RapidAI analytics and business intelligence products help stroke networks reduce costs and improve patient outcomes.

“For several years, we have worked to develop and bring to market the next generation of AIenhanced cerebrovascular imaging products. We have been rewarded for that dedication with sustained growth and uninterrupted profitability since going to market,” said Don Listwin, CEO of RapidAI. “In the last year, we have expanded our scope from ischemic stroke to hemorrhagic stroke, and with the recent acquisition of EndoVantage, we now address aneurysm. In these difficult global times, this investment is a significant sign of support, that while others are shrinking and shuttering, we are investing and growing to help build efficient stroke networks across multi-site systems and referral networks.”

RapidAI offers an end-to-end portfolio of advanced stroke imaging and stroke assessment products for hospitals of all sizes. The Rapid platform uses artificial intelligence to create high quality, advanced images from non-contrast CT, CT angiography, CT perfusion, and MRI diffusion and perfusion scans, helping hospitals to speed up time-critical triage or transfer decisions and facilitate better patient outcomes.

“We want our investment monies directed toward companies and teams that demonstrate global vision and a track record of success,” said Philipp Lennertz, Managing Director of Lennertz & Co. "RapidAI’s vision to massively improve stroke and other cerebrovascular care through AI, and other medical imaging innovations, has known no borders and brought measurable improvement to patient care worldwide. We are excited to help them continue and expand on their mission.”

“Since RapidAI cofounders, Dr. Albers and Dr. Bammer, presented research that dramatically grew stroke treatment guidelines globally, thousands of other clinicians and I have been able to address more patients and achieve better outcomes,” said Dr. Olav Jansen, Professor at the Department of Radiology and Neuroradiology, UKSH Campus Kiel, Kiel, Germany. “With the Rapid platform’s wide array of AI-enhanced imaging technologies, we have seen opportunities for effective care grow daily.”

About RapidAI

RapidAI is the world leader in stroke imaging and analysis. Based on over 1,000,000 MRI and CT scans from more than 1,600 hospitals in over 50 countries, the Rapic® platform uses Deep Learning, AI and specialised algorithms to customise findings and prognosis for patients from CT or MRI images. The RapidAI imaging platform includes Rapid ICH, Rapid ASPECTS, Rapid CTA, Rapid LVO, Rapid CTP and Rapid MRI. RapidAI also offers SurgicalPreview®, a comprehensive aneurysm management platform.

RapidAI empowers treating physicians to make faster and more accurate diagnostic and treatment decisions for stroke, cerebral haemorrhage and aneurysm patients using clinically proven, data-driven technology. With validated, trusted products developed by medical experts, physicians worldwide are currently improving care and treatment outcomes for over 20,000 patients every week.

Bodo Stein founded the company Stein HGS more than 20 years ago. Today, the company is a leading provider of products in the areas of barrier technology, equipment for construction sites, operations, parking lots and traffic, as well as street furniture and municipal supplies. Stein HGS was one of the first companies to create an online store, which now has around 150,000 products. Just under 30 employees at the company’s headquarters in the south of Hamburg handle Stein HGS’s customers. After building up the company, the founder wanted to reduce his role and sought a new partner. The Hamburg Family Office Lennertz & Co. became that partner. In the interview, Bodo Stein and Philipp Lennertz explain how to successfully change owners.

What was the reason for the sale of Stein HGS?

Bodo Stein: After 20 years, I wanted to withdraw from the operating business. However, a few aspects were very important to me as I sought a new partner: The new partner should not actively interfere in the operating business, but support its further development as a consultant and advisor. After many in-depth and personal discussions with Lennertz & Co., it was clear to me that I had found the right partner. With the family office, it was possible to preserve the corporate culture that had developed at Stein HGS and to discuss the future expansion as equals.

Philipp Lennertz: We quickly saw what a successful company Bodo Stein had built up over the years. In particular, we were persuaded by his early adoption of digitization in a niche. Furthermore, he differentiated himself from others by paving the way for a change in management at an early stage and prepared Stephan Otte as his competent successor. The subsequent acquisition discussions were defined by extensive mutual trust and were always constructive and purposeful.

What were the most important goals in the succession arrangements for Stein HGS?

Stein: Of course, it was important to me that I would be able to sell the shares for a good price. Since my employees have generally spent many years working for us, it was also critical for me that the team would feel comfortable with the new owner. And we have succeed at that.

Lennertz: We recognized the quality of management at Stein HGS early on. The processes also run very smoothly. These two aspects and the general orientation of the company quickly made it clear to us that the company has tremendous future potential. And that is why we decided to invest in Stein HGS.

What was special about this takeover and how was Commerzbank able to contribute to the success of the deal?

Lennertz: A major challenge was securing external financing for the acquisition. We approached several banks, but it quickly became apparent that the acquisition of a company with EUR 12 million in annual sales revenue is hardly serviced by financial institutions. Traditionally, banks in Germany have difficulties recognizing collateral for companies such as Stein HGS where there are high cash flows, but a low amount of fixed assets. That is why the “Financial Engineering” unit of Commerzbank was an absolute stroke of luck for us. The SME financiers offered a perfect financing solution for the deal because they were not afraid of the company’s size and also brought many years of expertise in the valuation of trading companies.

What do each of you consider to be the most important factors for the successful handover of a company?

Lennertz: When you reach the point of serious discussions, it is critical that you have a good understanding of the culture, especially with family-owned companies, and are able to use a 360 degree analysis to judge the motivation for a sale and to proceed with a focus on solutions. Ultimately, it is also important for you to negotiate as equals and demonstrate reliability. In comparison to larger private equity firms, we are certainly more flexible and closer to the needs of sellers. So when we look to find a solution for an entrepreneur’s individual situation, we are not bound by internal investment guidelines dictating that we will only acquire a minority or majority stake, for example. We also benefit from our personal entrepreneurial independence, which allows us to speak with a seller as equals.

Stein: The critical aspect from my point of view was that I had gotten my house in order three years before the start of the sales process. By this I mean that I had trained Stephan Otte as my successor and also transferred responsibility to another five key staff members. This gave me the certainty that the operations of the company would also run smoothly without me. It also created leeway for me as the founder of the company to deal with the sales process. Finding a new partner that you can trust is time-consuming. Conducting negotiations prudently requires your full attention if you want to be successful.

Mr. Stein, how did you prepare your company, employees, and yourself for the handover?

Stein: It was especially challenging to find the right point in time to get all the employees on board. The time window is very tight for such transactions. The negotiations with Lennertz & Co. took a total of nine months. All the participants considered it important that the negotiations be kept secret from the staff so the employees would not become uneasy. After we signed the sales agreement, we immediately discussed the matter with all the employees and introduced the new partner. I have longstanding relationships with the employees and my goal was for the staff to have a high degree of confidence in the management as well as the new partner. The company’s DNA was to be preserved, and we succeeded in this through clear communication. This goal was so important to me that I remained very present at the company in my new capacity as advisor during this time, and everyone who wanted to speak with me had the opportunity to do so. In the smoothest possible way, this let us keep the company on a successful course with familiar management and a new partner

The interview appeared in a Commerzbank customer magazine.

Private investors can now invest in American start-ups via a fund of funds. The digital asset manager Liqid now offers experienced private investors access to venture capital funds in the USA. The minimum investment of USD 250,000 is high, but until now, private investors have normally only been able to get involved in the venture capital market for amounts in the multi-digit millions.

"The plan is for Liqid Venture to invest in four to eight target funds, creating a portfolio of at least 100 companies. The funds with which we cooperate have have already shown over many years that they can successfully develop start-ups to the point of stock market success," says Liqid CEO Christian Schneider-Sickert. Those who decide to invest The term of the fund of funds does not end until 31 December 2035, and the first returns to investors are planned for 2028.

The focus of the fund of funds is the USA, especially Silicon Valley, New York and the region around Boston. This is where the greatest potential is seen. "The capital will mainly flow into technology companies. It will be spread across different sectors such as artificial intelligence, internet of things, big data, e-learning. In addition, we are investing in health technology," says Schneider-Sickert.

Valuations of unlisted companies have declined noticeably in some cases, he said, and past experience shows that venture capital funds launched in crisis years achieved the best returns in the long term. Liqid has gradually expanded its product range in recent years. The demand for the private equity product is "enormous", while the demand for the real estate product is "somewhat more restrained". Private equity is the collective term for investments in established groups and medium-sized companies.

Liqid is cooperating with the family office Lennertz & Co. on the new offer, which, according to Liqid, has already been investing in the asset class for its clients for years. Various investments in venture capital companies such as Bain Capital Ventures, Canaan, NEA, TCV and Khosla Ventures are planned via the fund of funds structure.

Liqid Venture aims for an average annual return of ten to 15 percent after deduction of all costs. The annual management fee is one percent of the subscription volume. In addition, there are costs for fund operation and a profit-sharing fee for the management. The risks include the long commitment of the capital and the illiquidity of the units. Independent asset experts therefore advise that investments such as venture capital or private equity should only be seen as an admixture in the overall allocation and not as the main focus.

According to the industry service Preqin, the global market for venture capital was affected in the second quarter due to the Corona crisis, but there were also initial signs of recovery - albeit more in China than in the USA and Europe.

Family offices (or rather, multi family offices) manage large assets, usually for businesses. Private equity – as a direct investment in companies – is therefore more or less a natural investment form of their clientele. The fact that it promises higher returns due to the low liquidity makes it even more attractive for the clients. It is no wonder then that many family offices have ratcheted up their activity in the past few years. Mainly in America, however, they have been relying less and less on the services of private equity funds. Instead, they have meanwhile started managing more than half of their investments on their own.

Yet this is not yet as widespread in Germany. Lennertz & Co. of Hamburg is one office that has ventured to make own investments for its clients. “Many business families in Germany often only have liquid assets in addition to their companies and properties. This is the result of traditional bank consultation,” says founder Philipp Lennertz. “We want to introduce them to illiquid investments as well.” Naturally, this is not without investments in traditional private equity funds – but own investments are included as well.

With Lennertz, clients do not necessarily have to take a back seat in such endeavors. Last summer, most of this was done using the special online dealer, including for Stein HGS, a provider of barrier technology and construction site and operational requirements based in Seevetal, Germany. The clients do not gain direct ownership with this, as it is via a fund and trust structure instead. “After we sold our first investment in brillen.de, our clients still had to undertake many subsequent certifications. The process is simpler via a trustee,” says Lennertz.

Business is not any easier right now because of the corona crisis. “Our clients tend to see this in one of two ways. On the one hand, they are concerned about the health aspects and woes of small independent businesses, while they see opportunities that are useful for them even with their capital on the other.” Even for entrepreneurs if they were to see possibilities of acquiring one or more companies below fair value, thereby being opportunities that could pay off in a few years. “When we invest in a company, we give the previous owners the option of re-investing in order to profit from the future further development of the company.” The sellers then invest part of the purchase price to invest in the acquiring company. All in all, Lennertz is optimistic in the current crisis for other reasons as well. Central banks and policies are acting with greater resolve than ever, and that will have a positive effect. “I am absolutely certain that we will rise up out of the misery we’re in very quickly,” the asset manager believes.

© All rights reserved. Frankfurter Allgemeine Zeitung GmbH, Frankfurt. Provided by Frankfurter Allgemeine Archiv

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

Hamburg-based family office Lennertz & Co. is acquiring the established fund of funds specialist for US technology funds BPE Fund Investors, also from Hamburg. Since 2001 the management team of Dr Andreas Odefey, Aman Miran Khan and Arne Fiederling at BPE Fund Investors have built up a network giving exclusive access to the top names in US technology funds. Over that period German institutional investors and high net worth individuals have subscribed to three funds of funds investing in pioneering venture capital funds in the USA such as Bain Capital Ventures, Canaan Partners, Khosla Ventures, Kleiner Perkins, NEA and TCV. This meant investors had a stake at a very early stage in companies like Beyond Meat, Facebook, FitBit, Netflix, Square, Twitter, Tesla and Workday, with corresponding profits from the massive increase in the value of these firms.

“BPE Fund Investors have worked hard to build an extremely robust bridge from Hamburg to the attractive venture capital market in the USA. We look forward to continuing the existing BPE Fund Investors funds of funds under the Lennertz & Co. banner,” says Philipp Lennertz, managing partner at the Hamburg family office Lennertz & Co. “Disruptive technologies are mainly financed in the USA and still offer great growth potential, for instance in artificial intelligence, big data, digital health, precision medicine, connectivity and consumer behavior,” says Dr Odefey of BPE Fund Investors. “As a succession solution for our company, we strongly believe that the Hamburg family office will continue to tap into the potential offered by the US venture capital industry, which BPE Fund Investors feels is considerable over the long term,” comments Dr Odefey.

Arne Fiederling, managing director at BPE Fund Investors, is joining the team at Lennertz &Co. He will ensure continuity in running the existing BPE funds and will also work with the expert team at Lennertz & Co. on further developing the fund of funds concept. Just like Mr Fiederling, the team at Lennertz & Co. boast many years of experience in venture capital and private equity gained at firms such as Bain Capital, BC Partners, Goldman Sachs, McKinsey and Swift Capital.

“The acquisition of BPE Fund Investors marks a successful and targeted expansion of our existing alternative investments platform for clients,” states Mr Lennertz. Just a few weeks ago the family office set up the Lennertz & Co. US Venture and Growth Fund I for its clients. This fund of funds is aiming to have a portfolio consisting of at least 70% US early stage and growth capital funds. A maximum of 30% will be allocated to direct and co-investments. Holding several funds will also provide broad diversification, with stakes in more than 100 portfolio companies. The product will be investing in funds from well known firms such as Horowitz, FirstMark, Insight Partners, Kleiner Perkins and NEA.

In addition to the ability to put money into major US venture capital funds, clients can also take positions in European VC funds. They can further gain exposure to German and European small and midcap companies through the Lennertz & Co. Family Equity Fund. Access to pre-IPO investments completes the offering on the platform. In the recent past Lennertz & Co. has invested on behalf of clients in such companies at Pinterest, Airbnb, 23andMe and Meituan.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

Lennertz & Co. can provide its clients with access to attractive and frequently exclusive investment opportunities in various asset classes. One such example is pre-IPO investments in US companies. “Nowadays young companies are financed by private sources of capital for much longer than they used to be. As a result, companies heading for the stock exchange see a disproportionate increase in value during the period before the listing rather than after the IPO,” is the conclusion of Philipp Lennertz, managing partner at Lennertz & Co, and his team of analysts.

“So we aim to make focused investments in companies that will go public over a three to four year time frame, since that’s the period a great deal of value is created,” says Mr Lennertz. Observers have noted that the share price of newly listed companies is particularly volatile in the first year after the IPO. An additional factor making these investments attractive is the short to medium term holding period, since stakes in newly listed companies are often only locked up for six months after the IPO and can then be sold at a profit. “We look at companies in depth, and only offer our clients a chance to get on board if we are totally convinced by the project and co-invest ourselves,” explains Mr. Lennertz.

Its entrepreneurial approach has made the Hamburg family office the preferred business partner in Germany for leading international firms in the pre-IPO market. Lennertz & Co. first offered its clients access to the pre-IPO market three years ago through the US company Pinterest, the popular social network which allows individuals and companies to post pictures with descriptions and thoughts on a virtual pinboard.

Other holdings have been pre-listing positions in e-commerce platform Leituan, ridesharing company Lyft, DNA specialist 23andMe, logistics expert Flexport, online training firm Coursera and holiday lettings platform Airbnb.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

A private equity fund sponsored by Hamburg family office Lennertz & Co. is acquiring a majority stake in specialist online trader Stein HGS of Seevetal near Hamburg through a management buyout. Current CEO and founder Bodo Stein is selling his shares and will reinvest in the transaction. After a transitional period he will move onto the company’s advisory board. In future Stein HGS will be run by Stephan Otte, the long-standing second managing director of the specialist online trader. The parties have agreed to disclose no further details of the transaction.

Stein HGS was founded in 1999 and is a fully digital specialist provider of barrier systems, construction site and operations products, signage, street furniture and traffic technology. The company’s unique selling proposition is the combination of a broad range, professional technical advice, rapid availability and the ability to customise products. Stein HGS has been growing at a double-digit rate since 2014 and in 2018 achieved EUR 12 million in revenue with 25 employees and an attractive EBIT margin.

“After 20 very successful years running Stein HGS, the time has come for me to arrange a well chosen succession at the top of the company. I am delighted to have found a partner with the strong financial backing to allow my employees to continue along the current high-growth trajectory under the leadership of Stephan Otte,” says the present CEO Bodo Stein. “Stein HGS has considerable potential to seize the many opportunities in a fragmented niche market over the next few years,” adds Philipp Lennertz, co-owner of Hamburg family office Lennertz & Co., whose Family Equity Fund is investing in Stein HGS.

Bodo Stein will in future be a member of the advisory board along with Klaus Trützschler, who served for many years on the management board of Haniel and chaired the supervisory board of Takkt, a successful group of B2B specialist mail order traders. Further CRM and online specialists will join the advisory board in due course.

About Stein HGS

The company was founded in Hamburg in 1999 and is now based in Seevetal. The fully digitalised specialist mail order company for barrier technology, construction site and business supplies, signs, street furniture and traffic technology employs 30 people and has over 17,000 customers every year. More than 10,000 core products and around 200,000 product variants are on offer. Direct delivery from the manufacturer to the customer enables a business model without tying up capital in working capital, machinery or warehouses and is therefore fast-growing and scalable.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

A suitable weighting in real estate forms a normal part of a balanced portfolio. “Many properties in attractive locations are extremely highly valued right now, so it often no longer makes sense for wealthy families to keep their money in investment or commercial real estate,” explains Oliver Piworus, managing partner at Lennertz & Co. However, the co-owner of the Hamburg family office sees investing in promising development projects as an attractive alternative way of continuing to benefit from rising real estate prices.

“Essentially, development projects offer investors the opportunity to participate in the value chain of a property at an early stage. But you have to always focus on the balance of risks and rewards,” says Mr Piworus. That is why the Hamburg family office avoids most standard concepts in the market, which tend to be structured so the developer puts up a relatively small amount of equity, while most of the capital to realise the project is provided by investors in the form of mezzanine financing. In return for their loan, investors receive a normal market rate of interest on the capital employed, in the low single digits.

The imbalance in this structure is obvious: the developer gets most of the potential upside in a project. And if something goes wrong, the lender faces a much greater risk of loss than the sponsor. “So we only invest jointly with developers who have a special niche and put up a large share of the equity themselves. That way, the risks and rewards for our clients in terms of capital gain or loss are balanced,” comments Mr Piworus.

For instance, Lennertz & Co. has a special market niche with a developer for luxury properties. Four projects have now been launched for clients. “Our chalets set the highest standards for alpine architectural design and luxurious comfort in exceptional locations,” says Oliver Piworus, managing partner at Lennertz & Co. Demand for the properties is further helped by the fact that the furnishings and marketing for the projects involve cooperations with star designers.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

The Hamburg-based family office Lennertz & Co. has sold its stake in FCF Holding GmbH (including "EatHappy"). The family office has actively supported the growth of the sushi provider EatHappy over the past one and a half years. During this time, the Cologne-based "shop-in-shop" specialist for sushi in supermarkets in Germany and Austria has grown from 100 to over 350 shops.

Last year, Lennertz & Co. joined EatHappy with a significant stake and realised a put option with a significant double-digit profit for its investors within one and a half years. "We are pleased to have been able to accompany EatHappy's strong growth trajectory on an important journey," says Philipp Lennertz (photo), managing partner of Lennertz & Co.

Lennertz & Co. actively invests in companies and, as a family office, bundles parts of client funds - primarily from family entrepreneurs - in order to build up and expand a private equity quota in the overall wealth context.

Recently, Lennertz & Co. has been using the "Family Equity Fund" created for this purpose to invest in a focused manner in European medium-sized businesses and profitable companies. In doing so, clients benefit from direct investments as well as from a partly exclusive mix of private equity funds from the SME sector, with a clear regional focus on D/A/CH and Scandinavia (including Afinum, Cipio Partners, EQT, Nordic Capital).

In 2015, Lennertz & Co. had already invested in the extremely profitable online and offline eyewear retailer "Brillen.de" as part of a capital increase, thereby helping to facilitate the successful expansion strategy. The investors were able to collect a triple-digit percentage profit from the sale in mid-2016. Only recently, another direct investment was made in the form of a minority stake in the online and offline sports goods retailer "21 Sports Group".

In order to thoroughly examine the opportunities that present themselves, the Family Equity Fund has a competent team at its disposal that can look back on decades of private equity experience. The team members and advisors previously worked for Goldman Sachs, Bain Capital, Capiton, EMC, MIG, Swift Capital and 3i. In addition, the advisory board of the fund consists of renowned industry and private equity experts such as Prof. Dr. Heinrich von Pierer, Prof. Dr. Klaus Wucherer and Stefan Theis.

"Since we did not find anything on the market that met our clients' needs with regard to private equity commitments, we created our own pooling vehicle. With this, we offer our family entrepreneurs attractive and promising investment opportunities in medium-sized growth companies," says Philipp Lennertz.

We didn’t hear a lot from Heinrich von Pierer for a while. After the major bribery scandal in Germany, the former “Mr Siemens” had to give up his role as chair of the supervisory board – even though there had been nothing to suggest that he had been personally involved in the sorry affair. Pierer stepped out of the limelight a little, advising start-ups and other companies and keeping in touch with his contacts from Erlangen, including those in China.

But now the former Siemens boss has found a new job to keep him busy at the age of 76. Pierer has been welcomed onto the advisory board of the Lennertz & Co. Family Equity Fund. Together with former Siemens executive Klaus Wucherer, two further entrepreneurs and a private equity specialist, his mission on the advisory board is to find suitable acquisition candidates.

Philipp Lennertz told the “Handelsblatt” that von Pierer and Wucherer (73) have a “fantastic network” that is already proving helpful, confirming a report published by “Manager Magazin”. The investment fund managed by Hamburg-based family office Lennertz & Co., serving affluent families and medium-sized companies, focuses on European companies that also have an online presence and are in need of capital to drive growth

According to “Manager Magazin”, Hamburg-based multi family office Lennertz & Co. has welcomed Heinrich von Pierer and Klaus Wucherer to the advisory board of its investment fund. The report suggests that the two former Siemens executives are all set to be on the lookout for acquisition candidates for the Lennertz & Co. Family Equity Fund.

It also claims that Heinrich von Pierer and Horst Lennertz are already acquainted, with the latter having been the CTO of E-Plus, a major customer of Siemens for many years whilst von Pierer was in charge of the conglomerate. Horst Lennertz’s son just so happens to be Philipp Lennertz, founder and managing director of family office Lennertz & Co.

Together with the second managing partner, Oliver Piworus, Lennertz looks after liquid assets amounting to more than one billion Euro through his family office based in Hamburg. Both former employees of multi family office Spudy & Co now manage assets for the Mayer-Schierning and Abée families amongst others. The two clients are heirs to a Hamburg property dynasty that owned the Bleichenhof Shopping Centre in the city centre, which has now been sold. The report suggests that they are now co-partners of multi family office Lennertz & Co.

Heinrich von Pierer is said to be a fan of the exciting approach taken by Lennertz & Co. when it comes to investing in new business models. After leaving Siemens in 2007, he gained no end of experience in private equity firms, with the support of Munich-based investment company Serafin owned by Philipp Haindl, one of the sons of the famous Bavarian entrepreneurial dynasty, amongst others. Von Pierer recommended Klaus Wucherer, his close companion over the years, to Lennertz & Co. as an expert in digitalisation and Industry 4.0.

The report goes on to state that the Lennertz & Co. Family Equity Fund had invested directly in as many as ten companies by 2019. The remaining capital is said to have been channelled into funds belonging to renowned investment companies. So we can assume that there’ll be plenty to keep von Pierer and Wucherer busy. So far, Lennertz & Co. has invested in start-up Brillen.de, sushi chain EatHappy and sports goods retailer 21sportsgroup.

Anyone on the hunt for companies in Germany is about to be given a run for their money by a superstar team featuring Heinrich von Pierer (76) and Klaus Wucherer (73). The ex-Siemens executives are on the lookout for acquisition candidates for the Lennertz & Co. Family Equity Fund managed by Philipp Lennertz (39). The former UBS banker looks after liquid assets amounting to more than EUR one billion through his family office based in Hamburg. His father Horst (74) was the CTO of E-Plus and von Pierer still remembers him fondly as one of Siemens’ loyal major customers.

The assets managed by Lennertz and the second managing partner, Oliver Piworus (44), include those belonging to the Mayer-Schierning and Abée families, both of which are heirs to a Hamburg property dynasty that, for example, owned the Bleichenhof Shopping Centre (in a prime city-centre location close to the Jungfernstieg boulevard), which has now been sold. They are now co-partners of Lennertz & Co.

Former Siemens CEO von Pierer joined the advisory board of the investment fund because he is “excited” by the way Lennertz and his people “invest in new business models”. He recommended his companion Wucherer as an expert in digitalisation and Industry 4.0: “There’s nobody better.“

And it looks like the pair are going to have plenty to keep them busy. The fund is believed to have invested directly in as many as ten companies by 2019, with the remaining money having been channelled into funds belonging to renowned investment companies.

After von Pierer left Siemens in 2007, he acquired a liking for the private equity business. For years, he has been advising the MIG Fund in Munich, which invests private investors’ money into new companies, and helping Munich-based industrial holding company Serafin, which primarily invests funds belonging to the Haindl entrepreneurial family, in a consultancy role.

So far, Lennertz & Co. has kept away from industry in its investments, with companies such as Brillen.de, sushi chain EatHappy and, most recently, sports goods retailer 21sportsgroup. Former CEO of ProSieben and Premiere Georg Kofler (60) is currently checking out this new investment too. The older generation certainly needs to be on hand to help the start-up avant-garde on its way.

An op-ed by Philipp Lennertz:

With the pension struggle showing no sign of stopping, there is a growing focus on asset classes like private equity – especially as far as family office clients are concerned. But investments need to be well structured even when the investment horizon and risk understanding seem to be spot on.

For established entrepreneurs, private equity investments are the icing on the cake. The level of understanding for entrepreneurs with a business model promising success is high and the prospect of having a disproportionate interest in future revenue from a company that looks set to achieve big things is a tempting one. Nevertheless, it is down to a family office working with a client to offer sensible judgement to keep them down to earth. After all, the risk profile involved with private equity is always higher than many of the other most common investment classes.

It is best to have a clear concept in mind if a client’s high expectations are to be dealt with successfully here. As a general rule, a private equity engagement should also always correspond to the client’s personal preference. For example, recommendations for investments need to be based on the family, company and financial situation, whilst, of course, taking into account the legal and tax-related framework applicable to the client. If this has all been looked into in depth and a potential private equity investment appears as an option, it is worth setting out a mixture of direct and indirect investments and clearly presenting the investment limits (see table in PDF). Furthermore, opportunities and risks on the part of the investor can be improved by selecting promising early-, mid- and late-stage investments through direct and indirect investments. Another risk buffer can be built in by investing the target private equity quota of the total assets proportionately every year over a period of ten years. This will ensure optimum distribution, usually across two economic cycles. A steady deal flow is essential here. And this requires a reliable network, relevant expertise and knowledge of no end of transactions if interesting investment opportunities are to be offered.

When it comes to direct investments, sectors tend to have a wide scope and companies tend to have a high level of innovation. Tech companies, B2B firms and retail concepts can be relied upon to comply nicely with the investment criteria. Appealing investments usually come in the form of companies that have customers requiring goods or services multiple times within a short period of time, allowing for the customer lifetime value to be maximised, rather than companies selling a one-off service or product.

Experience also shows that clients prefer to get involved in investments if the managing director of the family office has made the same investment. This clearly demonstrates that the business model, the company and the management team have been checked out at length and shared interests are at stake. Unfamiliar territory should be avoided at all costs in the case of indirect investments too. Black box investments of this kind can be avoided by a fund making initial investments in companies and then family office clients waiting until the second or final closing before investing.

And there are further valid reasons for family offices working on behalf of affluent clients to invest in private equity, such as their trust function. For one thing, this ensures a great deal of discretion. There is no disclosure of who has invested capital in the investment vehicle. This set-up also enables starting sums that can be in the mid-six-figure range. In other words, sums that allow for the distribution to be as wide as possible across the investment class known for being high in risk. Another advantage is that a family office can pool several clients to gain more power of representation in a company or fund, which allows them to defend investor interests.

And the final key argument is transparency of costs. With a clear concept, family offices are better placed to deliver greater returns from private equity investments in line with their clients’ wishes (see the various private equity structures in the diagram on the left). It is abundantly clear that there is only one fund manager between a family office and a company – even in the case of an indirect investment. Not to mention the low costs that are involved when a family office invests directly in a company.

About Lennertz & Co.

As an entrepreneurial and owner-managed family office, Lennertz & Co. focuses exclusively on the success of its clients' investments. The investment recommendations are in line with the personal preferences of the clients. They benefit from the independence of Lennertz & Co. and the exclusivity of the investment opportunities.

Lennertz & Co. also has a large number of authorisation certificates from the German Federal Financial Supervisory Authority (BaFin) and is thus subject to numerous qualitative and quantitative requirements of both BaFin and the German Bundesbank.

Lennertz & Co. shares its clients' demand for fast, profound and secure decisions. In order to thoroughly examine the opportunities that arise in the venture and growth capital, private equity and blockchain segments for its clients, Lennertz & Co. has a competent team at its disposal that can look back on decades of experience. In addition, the advisory board consists of renowned industry, venture capital and private equity experts such as Prof. Dr Heinrich von Pierer, Prof. Dr Klaus Wucherer, Stefan Theis, Daniel Thung, Daniel Milleg and Florian Heinemann.

FCF Holding GmbH has secured financing for the planned national and international growth of its subsidiaries EatHappy and EatHappy ToGo ("EatHappy"). The Hamburg-based family office Lennertz & Co. was admitted as a new shareholder with a significant stake as part of a capital increase.

Founded in 2013, EatHappy is a leading operator of innovative Sushi & Asia Bars in supermarkets in Germany and Austria. In the more than 120 sushi bars, high-quality sushi products are freshly prepared in front of the customers and placed in the self-service display cases. Thanks to close partnerships with leading food retailers, EatHappy has realised extraordinary growth since its foundation.

Advisor to FCF Holding Gmbh is Network Corporate Finance. The independent, partner-managed consulting firm is specialised in assisting medium-sized clients with the purchase and sale of companies (mergers & acquisitions) as well as equity and debt financing. With a 26-strong team based in Düsseldorf, Berlin and Frankfurt, Network Corporate Finance has extensive experience from more than 500 transactions worldwide.

Philipp Lennertz, a member of the management team at multi family office Spudy & Co. for many years, opened up family office Lennertz & Co. on 1 April. At the same time, he acquired asset management subsidiary Argentos Investment Managers from financial services provider Argentos, meaning he is starting off with an asset management licence from the word go. It has been agreed that the purchase price will not be disclosed.

The business is relocating from Frankfurt to Hamburg and taking on the name Lennertz & Co. With a team of four employees by his side to begin with, 36-year-old Lennertz is all set to offer family office services.