IK strives to build lasting value in businesses by effecting fundamental performance improvements. Therefore, when evaluating investment opportunities, IK looks for companies which have strong market positions but which are, for clearly identifiable reasons, not performing at their full potential.
Before making an investment, we develop a clear view on both the value creation elements in the business as well as measures needed to close the gap between current and potential performance.
During our ownership, we support portfolio company management in improving the performance of the business. The operating profit of the portfolio companies we have exited has more than doubled during our ownership, which proves the strength of our value creation approach.
Value enhancing measures
IK works closely with our portfolio companies to create value during the period of our ownership. These value creation measures can be summarised under the broad categories below.
Installing the correct management, director and supervisory structures can help our portfolio companies develop and grow as they implement best practice structures and disciplines throughout their organisations. Strong corporate governance can support independent decision making processes whilst avoiding conflicts of interest.
We work with our portfolio companies to develop and implement clear strategies designed to support the underlying growth and development of the business. This will typically involve restructuring and either organic or acquisition led growth.
IK is committed to achieving operational excellence with all our portfolio companies. This frequently involves benchmarking to establish appropriate goals and targets.
We work closely with all our portfolio companies to develop and implement clear expansion plans. These plans can be based on either organic growth or acquisition led growth, or a mixture of both. We provide support to our companies in entering new geographic markets and expanding the product range at the same time as identifying potential acquisition targets. We are always very involved in the acquisition and subsequent integration process.
Where appropriate, we will work with our portfolio companies to restructure the overall company. This will frequently involve engaging in some type of consolidation or M&A activity.