FAQ

Sagard in 11 questions

While not exhaustive, these frequently asked questions will give you a better understanding of our corporate DNA.

Sagard invests in companies to provide them with the resources they need to realise their strategic vision, and supports them at every stage in their business plan.In this way, we offer an alternative source of financing to the stock market and banks, while delivering much more than just funding.That’s because we focus all our energy and experience – plus the experience of our partners – on enabling portfolio company management to successfully implement their projects.

A good example of what we do concerns Ceva Santé Animale, where we provided both capital, to enable the company to become a market consolidator, and access to a network of entrepreneurs capable of opening new paths to growth, notably in Latin America.

What makes Sagard different from the competition?

With only around ten investors, most of whom are industrial families, Sagard’s competitive advantage lies in its emphasis on human, industrial and strategic issues when considering potential investments.

We offer an unrivalled ability to analyse projects swiftly and thoroughly, thanks to the wide array of resources allocated to our team and the quality of our networks.

Although these analyses obviously factor in financial considerations, we believe that they must be assessed from a long-term perspective, because true value is created only once a growth project has been successfully completed.

Lastly, in keeping with our entrepreneurial culture, we are very pragmatic about the form our investments may take.For us, “a different way to invest” also means thinking outside the box in approaching unconventional deals.

If Sagard doesn’t use IRR as the only yardstick to measure performance, what else does it use?

Rather than a very high IRR in the short run, we seek a reasonable multiple on our initial investment in absolute terms,even if this takes five or seven years.This performance metric is much more attuned to our investment philosophy, which is based on supporting a management team’s ambitious growth objectives.

What does Sagard have to offer a family-owned business?

The opportunity to move into the next phrase or up to the next level, without exposing the business to excessive leverage or to volatility and other headline-driven movements in the financial markets.

Sagard can help family businesses to carry out a strategic project, improving their chances of success while allowing them to continue managing operations.

Sagard is ideally positioned to understand the issues facing family-owned companies, because that’s how we got started too.

Do you always use leverage?

While much of a portfolio company’s expected value creation comes from the business plan that convinced us to invest in the first place, the value creation process can be enhanced by providing part of the financing in the form of debt to optimize the capital structure.

That said, every project is different, and not every company can take on the same level of debt at the outset.That’s why we consistently strive to structure acquisition financing in such a way as to anticipate a company’s future financing needs.Our overriding aim is to avoid jeopardizing growth and the company’s future by loading it down with too much initial debt.

Why did you acquire minority stakes in companies like Vivarte, Faiveley Transport and Ceva?

Because we were inspired by their teams and their business plan.

In the case of Faiveley Transport, we were given the rare opportunity to join forces with François Faiveley to create a world leader.We seized this opportunity immediately, since we have contractual exit guarantees, even though we hold only a minority stake.

As regards Vivarte, we worked extensively with Georges Plassat when he was a Sagard Industrial Advisor.This allowed us to become thoroughly acquainted with the company and fully understand the potential value of his project for Vivarte.It was therefore only natural for us to take part in the transaction, along with PAI.

This same logic prompted us to invest in Ceva Santé Animale in 2010.Our flexibility allows us to take minority positions in companies with strong growth track records rather than focus solely on majority stakes in projects with less clear-cut growth prospects.

Do you have any preferred industries?

No.We are pragmatic investors.Once we have understood a given industry’s key challenges and determined that it enjoys high growth potential, we are willing to consider investing.Thanks to our extensive support system (investors, Advisory Board, Industrial Advisors, networks), we almost always have direct access to industry-specific expertise.

Is Sagard interested in the subsidiaries of large corporations?

Sagard is interested in business plans and expansion projects led by ambitious, entrepreneurial teams.A subsidiary of a large corporation may feel that it is not able to realize its full potential, especially if it operates outside the core business.In this case, the subsidiary may be ideally suited for partnership with Sagard.

But our horizon extends much further, as our current investment portfolio clearly shows.Enterprises of all types, whether corporate subsidiaries, family businesses or even publicly listed companies, are likely to find that Sagard is the catalyst they need to unlock new value.

Does Sagard ever operate as a passive financial investor?

No, because that would be inconsistent with our investment philosophy – after all, we’re not a bank.We place a premium on the value we believe we can add to a project, something that calls for interaction with management teams.

What does Sagard have to offer a family-owned business?

Sagard can help family businesses to carry out a strategic project, improving their chances of success while allowing them to continue managing operations.

Sagard is ideally positioned to understand the issues facing family-owned companies, because that’s how we got started too.