Two private equity managers with their own business in Zurich have just seen a deal fall foul of the coronavirus. This is why they are glad about it.
Less than a year ago, Nico Taverna and Gregor Hasler (pictured below) founded Mill Reef Capital, a private equity firm. Until September 2019, Taverna had been active in the private equity division of Schroders Adveq, while Hasler had worked for LGT Capital until August.
Taverna’s and Hasler’s Mill Reef Capital, which is based in Zurich, specializes in the secondary transactions of 10 to 20 million euros ($10.8 to $21.6 million) in Western Europe. There focus is on smaller transactions often overlooked by larger firms, in industries such as health care and tech.
Despite their focused approach, the two faced a dip, not so much because of an economic downturn but because the coronacrisis stopped impending negotiations slated for March.
Drop in Price of 20 to 40 Percent
Taverna (pictured below) told «Private Equity News» that he didn’t mind so much, because all the transactions that they were conducting now would be much more lucrative than the ones of the past six to 12 months.
He added that he’s been through a similar patch once before. The business he had concluded during the financial crisis of 2008 were among the best ever, he added.
Taverna expects the prices on the secondary transactions market to drop 20 to 40 percent depending on the type of asset and portfolio.
Family Offices on Board
The manager is looking forward to coming months as valuations for the second quarter would likely fall and provide an interesting and aggressive time to buy.
Mill Reef Capital has no war chest to mention of, even if the firm is considering opening a fund in future. However, the company received several firm commitments of local family offices and will work on a deal-by-deal basis.
