NPM Capital invests in medium-sized companies in the Benelux region, providing support to take them to the next phase of growth development. NPM Capital has the capabilities required to facilitate flexible, generally long-term, investment horizons. The portfolio currently comprises both majority and minority stakes in 27 companies and includes growth capital.
Sustainability represents an essential factor in the screening of possible investment opportunities, as well as in the ongoing development of portfolio companies. Environmental, Social and Corporate reviews are conducted on a regular basis to benchmark and monitor performance. Portfolio companies are also encouraged to proactively address the challenges associated with a sustainable future.
Doing business fairly is another key feature of responsible entrepreneurship. For NPM Capital and its portfolio companies, sound business practices and compliance with legislation are standard operating principles.
Compliance risks are assessed as a matter of course as part of due diligence covering investment targets. Assessments are also regularly undertaken on existing portfolio companies. A dedicated Ethics & Compliance officer provides ongoing advice and tools to support individual portfolio companies in setting up or improving their compliance framework. In addition, employee learning events are organised on a regular basis to strengthen awareness of sound business practices and regulatory compliance.
The current investment portfolio reflects the positioning of NPM Capital as a contemporary, active, and involved investor for the longer term – a positioning that also necessitates a diverse and inclusive organisation. Although NPM Capital is performing well compared to the broader Private Equity market, it remains committed to improving diversity within the organisation even further.
In 2020, the Dutch economy, like most other European countries, faced exceptionally challenging conditions due to the global COVID-19 pandemic. The final stage of Brexit and the unique political situation in the US also contributed to uncertainty. As a result, the transaction market basically came to a standstill before starting to recover in the second half of the year. Historically low interest rates, a continued inflow of money into Private Equity and the willingness of lenders to provide generous credit for acquisitions resulted in high valuations, in particular for sectors that have proven to be resilient to COVID-19.
The effects of COVID-19 on the NPM Capital participations differed depending on the business model and sector, but in general the portfolio proved resilient. NPM Capital remained in close contact with all portfolio companies, with a focus on supporting management in navigating the crisis, managing liquidity and preparing for recovery when the market returns to normal.
NPM Capital continued to build its portfolio around the four investment themes: Everything is Digital, Feeding the World, Future of Energy, and Healthy Life. Supported by expert advisory boards such as its Agri Board and Digital Board, NPM Capital primarily seeks investments related to these four areas that offer opportunities for growth.
Several investments took place during 2020. After obtaining approval from the Dutch competition authorities (ACM), an investment in AgroCare, Europe’s largest tomato grower, with greenhouses in Europe and Northern Africa, was completed. Also, a majority stake was acquired in Futurewhiz, the developer of digital educational learning systems whose best known brand is called Squla.
In addition, a number of follow-up investments were made in existing portfolio companies. Funding was provided for GroenDus (formerly called Rooftop Energy) to finance the acquisitions of Greenspread, Solaris, Ealyze, and CT Energy. NPM Capital also supported Ohpen, a fintech company that administers retail investment and saving accounts on behalf of banks and other financial institutions, with the acquisition of DaVinci. No major divestments took place during the year.
NPM capital was unable to make a positive contribution to net income, with planned exits postponed to 2021 in the face of increased market uncertainty as a result of COVID-19.
Valuations remain high