23 février 2021
In conversation with Silverfleet’s junior investment team: Thomas Artmann
In the final part of our ‘in conversation with’ series, Thomas discusses his role working for Silverfleet’s lower mid-market European Development Fund, his views on European market opportunities and the strong growth of portfolio company TrustQuay, a trust and fund software provider. Thomas joined as an Investment Executive in Silverfleet’s London office in 2019 and currently sits on the board of TrustQuay.
Working on the European Development Fund, the firm’s lower-mid market fund; how do the challenges of identifying smaller firms with potential differ from those of the flagship mid-market fund?
I believe there are three main differences in the challenges presented: primarily, the market for smaller firms is less transparent in terms of types and timing of opportunities coming to market, therefore you must be more opportunistic in your decision of where you want to invest. In most cases it’s possible to forecast when larger firms, often PE owned, will come to market given the predetermined investment cycle of institutional investors. Secondly, the overall quality of smaller firms is more difficult to ascertain and more heterogeneous compared to larger deals, which have often passed through several investors and undergone previous due diligence. Thirdly, management and retention are even more relevant when compared to larger mid-market firms because small firms often rely even more on management given less institutionalised internal processes.
How does the European Development Fund team operate alongside the wider Silverfleet team?
Silverfleet’s lower mid-market fund, the European Development Fund, was established to complement and enhance the Firm’s existing investment activities and to leverage the current deal flow being generated by Silverfleet’s pan-European sector and geographic coverage. Both the EDF and flagship fund pursue broadly the same investment strategy but in different segments of the market. While we work hand-in-hand with Silverfleet’s Origination team, by having a dedicated EDF team focussed on originating, executing and monitoring small to mid-cap transactions, we can enhance our relevance across target markets, and drive investment opportunities for all Silverfleet-managed funds, including our flagship fund.
Within Europe, which regions are you currently most excited about? Where do the opportunities lie?
The Netherlands, the Nordics and Germany are appealing markets because of the abundance of highly specialized SMEs, which are often global market leaders in their respective niche sectors, within these regions. The Netherlands and the Nordics have been open to private capital for a long time and management there is often very anglophile making it easy to build a strong relationship with the deal team. German SMEs have just recently started to embrace private capital as a widely accepted mean for company succession, for example, providing a strong deal flow for private equity in coming years.
You sit on the board of leading software provider TrustQuay; how have you been working with the company to accelerate its growth?
TrustQuay is the leader for trust, fund and corporate services (‘TC&S’) software and has been developing strongly both organically and inorganically since its acquisition by Silverfleet. Alongside management, we have accelerated organic growth by: (i) enhancing TrustQuay’s service quality to reduce churn levels; (ii) adding modules and functionality to best serve clients in an ever-changing regulatory environment; (iii) building out TrustQuay’s sales presence in attractive regions for the TC&S market such as Luxembourg and Singapore. We have driven inorganic growth by acquiring and successfully integrating Touchstone to become the global leader in this space. With all this achieved, our focus now is to accelerate growth by exploring opportunities to win new clients in new and existing geographies and to introduce additional new products, such as a SAAS product.
What do you enjoy doing outside of work?
As an art enthusiast, when in London I love a Sunday stroll around the V&A and visiting galleries that focus on contemporary art. However my favourite gallery is Die Pinakothek der Moderne in Munich, which hosts an impressive collection of modern art including works by my favourite artist Ruprecht Geiger, a fellow native of Munich, whose works impress with bright colours and intense contrasts. Like many others in the Silverfleet team I also love to ski and enjoy playing tennis.