Enhanced Capital and Quadrum: “A sustainable investment without an exit strategy”

Last month Reported by Consultany.nl Improven and Quadrum Capital have expanded their relationship further. We also noticed that more and more advisory parties are getting into the hands of private equity firms. This made philanthropic managing partner Jan Bosmann upset. So we called him and Dennis de Buijzer of Quadrum Capital, so they could explain why this deal is really different from the others.

Anyone who follows the Dutch consulting industry will notice that there is a huge consolidation going on. Every week – and sometimes more often – we can add a new acquisition or merger, as often growing advisory groups can draw on the deep pockets of private equity parties.

So it’s no surprise that we also included the new deal between financial, risk and IT advisory firm, investment firm Quadrum Capital, in this list, acknowledges Jan Bosman.

The managing partner begins with “Strictly speaking, it’s not wrong either.” “Quadrum Capital is already investing in private equity. But there is a vast difference between the partnership we entered into and the usual private equity investment.”

“At first, Quadram Capital is not an outsider coming to pick us up,” Bosman explains. “They’ve been involved since starting Improven in 2016, but now they’ve taken an official interest out of their money.”

Don’t panting investors down your neck

More importantly, he asserts, Quadrum Capital is making this new investment from the new Evergreen Fund. And herein lies the biggest difference in private equity as we usually know it.

A fund usually has a fixed term—often five years—in which the goal is to maximize return. We are fully committed to achieving rapid profit growth in order to subsequently sell the acquiring party for as much money as possible. This often involves high borrowing and financial structures to create maximum leverage. Bosman explains that this does not apply to the Quadrum Evergreen box.

It is a fund that makes little or no use of loans and no exit strategy. This makes it very different from a typical private equity investment, where the return is realized on exit.”

“Improfen has been growing for five consecutive years and is able to differentiate itself within a market that also offers a lot of opportunities for the future.”

“The return here is not a short-term exit, but the goal is to invest over the long term in sustainable, profitable, robust institutions that simply enjoy sustainable returns year after year. So there are no fund investors gasping our necks with the question when an investment has doubled.”

Dennis de Buijzer, chief investment officer at Quadrum Capital, explains that the Evergreen Fund is specifically targeting long-term participants. “The backers consist of entrepreneurs, ex-entrepreneurs, and entrepreneurial families,” he says. “Some of the participants want to build something for their children. Then they don’t wait for their assets to be released after a profitable few years and have to be reallocated again.”

United in sustainable growth

So the focus of the collaboration is entirely on sustainable growth, and this is exactly where the two partners met: Improven was looking for a party that would support this long-term growth financially, and Quadram Capital for a party with healthy growth potential.

“What we are working on at Improfen is building a great consulting organization that can be sustainably successful,” says Bosman. “It is imperative that we maintain our exclusivity, and it is very good to work with an investment fund that shares that goal with us.”

Another important feature is that Quadrum Capital is not actively involved in the Improven business. De Buijzer: “We act as a sparring partner and stay somewhat in the background. So we only invest in companies with professional and independent management, and that is exactly the case with the Improven partner team.”

Dennis de Buijzer, Chief Investment Officer, Quadrum Capital

“In addition, the agency has been growing for five consecutive years and has been able to differentiate itself in a market that also offers a lot of opportunities for the future,” he says. Companies are increasingly focusing on risk, finance and information technology. Moreover, Imbophofen offers its services to both public and private sector clients, ensuring a stable base.”

Grow based on your strength

Improven wants to build on this foundation with support from Quadrum Capital. Bosman stresses that the agency remains faithful to its current focus on finance, risk, and information technology. “This specialty is an important part of our success. We are now known for the quality we deliver there and of course we want to continue that.”

However, the office continues to move with an area of ​​continuous development. “You can now see that project and program management is becoming increasingly important. Large organizations especially have to deal with so many projects in their transformation programs that maintaining control becomes a challenge. We help them with that.”

In relation to this, change management is also playing an increasingly central role. “In the ongoing digital transformation, it is no longer just about content or technology, but at least it is about getting people to participate and including change.”

“We are enhancing this dimension in our services at an accelerated pace and are also selecting accordingly when hiring new talent. After all, characteristics such as delivery ability and organizational sensitivity are essential here.”

To complement organic growth, acquisitions are also being considered, but according to Bosman, this is definitely not a major buy-and-build strategy. “We didn’t join Quadrum because there was a lot of money to buy competitors, but selective acquisitions of complementary junior players are on the horizon.”

He can also report that Improven is already “very serious” about working on one acquisition. “We hope to announce more on that soon.”

Also on the chosen path

What is prevalent in the Bosman story is that the collaboration with Quadrum Capital should be seen primarily as a way for Improven to continue aggressively on the path it has already taken.

“Thanks to this extensive collaboration, we can better continue what we’ve been doing for years: controlled growth based on quality.”

“It’s not a huge break in trend,” he says. “We will continue to do what we have already done, and our strategy is and will continue to do fun projects for nice clients with nice colleagues. The partners team will remain the same and will be strengthened in the coming years in line with the growth of the organization. Our team has responded very positively.”

“Of course, our employees also see what’s going on in the market, how many parties are picked up,” he explains. “The message we’re sending here is that the stable shareholder we already had on board has once again perpetuated the partnership so that we can continue to grow on our own terms, by retaining our own identity.”

An important part of this identity also lies in the way IMPROVEN is committed to making a broad social impact. For example, the agency agrees tangible and measurable social goals with clients in framework contracts, invests a percentage of the turnover in social return and continually works on topics such as sustainability, mainstreaming, inequality and diversity.

“We also publish our own expertise,” Bosman says. “For example, for people far from the job market. For example, we direct case holders to workplaces and learning and give them career guidance. Consider internships in finance and data, advice on creating a resume and LinkedIn profile, and guidance in job hunting. and find it.”

Bosman assures us that this important pillar of the Imbroven culture will always be proud. “Thanks to the growth Quadrum is supporting, we can only increase our positive impact.”

The same applies to the vast growth and development opportunities that Improven offers to its professionals. “This is another part of our message to our people: Our growth also creates new opportunities for our people to grow with them. Quite a few of them are now seniors and at some point are also enjoying being the driving force behind the team.”

“Through Young Improven and our Professional and Senior Programs, we already had a nice continuing education curriculum, but it also provides new career opportunities,” he explains. “And that comes in handy, because that in turn contributes to our growth – finding and retaining talent is one of the biggest challenges today.”

“In short,” Bosman concludes, “Thanks to this extensive collaboration, we can better continue what we’ve been doing for years: quality-based controlled growth by developing our talents and helping clients optimally.”

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