In a few years our role has changed profoundly

March 28, 2012 12:00 AM
In a few years our role has changed profoundly

Wendel investment claims status to share in the investment world. Why

Wendel is a publicly traded, investment company which has a long term strategy. This strategy is possible because Wendel invests its own liquidity in the companies it acquires. In contrast, a "private equity" Fund cannot be the length of long term because he invested money from third parties: it must yield assets regularly to make money for its investors. Wendel could not participate in the development of world leaders without involved fifteen years in companies such as Bureau Veritas or Stallergènes, which are great achievements.

You therefore join those who denounce the horizon short-term funds...

Many criticisms of the investment fund leave a bad analysis. Why is it such a development of this new class of players Simply because companies, SMEs such as major groups, are in need of shareholders over the longer term as stock markets, with the time horizon is little more than a few months. Moreover, many listed companies have an extremely fragmented capital, and the slightest difficulty, this fragility is in broad daylight. The development of the Fund appear to be the natural consequence of the lack of stock markets. It is a structural phenomenon. Fact remains that their once-year investment horizon appears still too short to develop an ambitious project to enterprise. In this regard, it is a chance for the France to have two investment companies listed among the first in Europe.

Is the size of Wendel enough relative to that of the great Anglo-Saxon funds

We are able to invest more than 1 billion euros in own funds in an acquisition, which is quite similar to the capacity of the largest investment. On the other hand, we have the advantage of permanent capital. Indeed, some such as KKR and Apollo began to create listed structures and it is likely that in a horizon of ten to fifteen years, the model funds converge with that of investment companies listed. This leads us to us internationalize to expand our "reservoir of opportunity" and further strengthen the diversification of our group. We have already begun to do so with, in 2006, the acquisitions in the United States (Deutsch) and Netherlands (Stahl and APR), and we do not exclude also look to Asia.

Could you take minority stakes in major groups rated as Albert brother or, recently, group Arnault

We do not a priori distinction between listed company and a non-listed company. What we are concerned first and foremost, this is not the nature of the capital but the nature of the industrial project of the company, and whether Wendel can amplify its potential for development. If we cannot do better than the single undertaking, we act not. In a few years, our role has changed profoundly. Provide banker in a world where capital were rare, the group became a professional shareholder in an environment where the money is abundant. This is the reason for which we have sold 80 of the assets of the former IMPC since 2002.

Could you launch hostile operations

A shareholder may be that good intelligence with management with which the relationship is necessarily based on trust. However, in the interest of the development of the company, we have been to change the leader; This was the case three years ago, with Wheelabrator Allevard. This is exceptional.

Companies have really need funds which heavily into debt them

I can not decide for all players, but, with respect to Wendel, we are always looking for leverage. What we are concerned, it is the development of societies: Bureau Veritas or Stallergènes, for example, record a decade of greater than 15 growth per year, use step, or very little, to leverage. After fixed with business development goals, we adapt its financial structure in order to balance efficiency. And, most importantly, we bring the time necessary for the implementation of creative projects of value. It is also striking to see leaders, to shareholders of the Fund, the choice of Wendel because they want to develop their business in the long term. For example was decisive in the choice of Materis former activity of Lafarge materials, Editor's note to join our group.

Therefore, you do not share the point of view of Henri Lachmann on stagnation of the LBO companies...

Between the time where we bought Legrand in 2002 and one where we handed him

on the stock market, in 2006, its value has more than tripled. Schneider had the same performance over this period, his scholarship course would now close to 200 euros per share, double the current. The potential of Legrand is now higher than it was before that we become shareholder. The company has adapted to a world globalized by improving its productivity and the use of its capital employed, and doubling its ability to generate the cash flow. Its margin of manoeuvre it reinvested in the growth by launching new lines 50 and by devoting more than 1 billion euros in acquisitions in strategic positions on all continents. I did not feel an any static...

The recent inflation on remuneration of executives you shock it

I do not find shocking that a contractor who is enriched: with him, he saves his company, its employees and eventually his country. In a LBO, one manager invests a significant part of his earnings and its heritage in the capital of the company; It takes a risk, as any contractor. The performance for shareholders is less than a certain level, in general 10 per year, he lost his investment. How many leaders who today receive free stock would be willing to pay for their remuneration system and lose their investment if their scholarship course progressed less than 10 per year What is shocking is the people that enrich themselves while they create value. To my knowledge, this does not exist in the LBO.

Compensation of patterns has often been implicated during the election campaign...

The Executive compensation is to be considered on the success of the business. Castigate patterns me deeply unjust because the few excesses has been under the spotlight correspond to the reality of thousands of entrepreneurs who work every day to the success of their business, large or small. The only question that should ask any politician is the creation of an environment that promotes the enrichment of all the French. You must have the courage to symbols, including reform of inheritance tax and tax of solidarity on wealth (ISF), which encourages French or from abroad, while the country has need of them to invest, or to sell their business.

The engagement of employees is sufficient

It is a question specific to each company is the responsibility of shareholders as well as managers. In the subsidiaries of Wendel, we ensure that employees have access to the capital or an award to the success of the company. The personal situation of each must be taken into account because it cannot apply to each employee to take the same heritage risk that the leaders of the company.

Companies are subject to requirements of profitability more in higher. Is - this compatible with the creation of jobs

Wendel has multiplied by more than 100 its value over the last twenty to twenty-five years. This is to shareholders a return of more than 20 per year, without sacrificing the development of the companies of the group. Quite the contrary, if we count all the success to which the Group has participated, Capgemini Carnaud from BioMérieux, Editis, Bureau Veritas or Legrand. This performance is accompanied by a social positive balance since the companies of the Group were created in total more than 30,000 jobs.

And France

In France also. In services, Bureau Veritas, for example, has created over 3,000 jobs. Industry also: in Legrand, high value-added employment increased overall. I am convinced that there is always room for a strong industry in France, provided they do not seek to fight unnecessarily on the same grounds as the emerging countries, but fighting in terms of innovation and added value.

As an investor, you are in contact with many French companies. Do you consider that their competitiveness is reduced

French companies are remarkably successful, and the France has a colossal human potential. It is the business environment requires change in releasing the energies and the brakes on the initiative, reducing the role of the State to its essential missions, by decentralizing and simplifying all the structures which overlap, interfere between them and consume the money for nothing. It is for politicians to set a goal for which the French will accept to make the necessary adaptation efforts. They are not so great.