„We want to ensure that this doesn't happen again“
Mr. Huth, Mr. von Hermann, Triton is confronted with significant abuses in management and company culture. How have your investors reacted to the incidents at the team event in Zürs?
Martin Huth: We are in dialogue with our investors, as we always are. I have not seen them retreat reflexively. Of course, the investors have questions, because the events that were reported on are not in line with their values, which they use in their investment criteria – and not with ours either.
What are you doing to clarify the events and put a lasting stop to them?
Claus von Hermann: It is important to us to offer a positive working environment for all employees. The incidents mentioned in the report do not correspond to the vision of our corporate culture nor our standards. They are unacceptable. We apologise for that. There is a gap between our vision and the actual perception by employees. We are working on this, and want to ensure that something like this does not happen again. We are commissioning an external service provider to do this.
What exactly do they do?
Claus von Hermann: It involves a comprehensive survey of all employees. We want to understand what they think, and identify potential grievances, to react accordingly. Equality and diversity are important to us. This is the only way we can be successful in the long term.
Martin Huth: I have two grown-up daughters myself. You can probably imagine that this is also worrying them. We are sorry that many employees have now had to explain themselves to their families, who asked: Where exactly are you working? There was a lot of disappointment and anger internally – also about the press reports. We now have to deal with that.
What proportion of Triton's management team are women?
Martin Huth: We have three female partners out of a total of 29 partners. Among the professionals, the proportion of women is 28%. That is slightly above the average in the industry. But of course, we still have to get better. We are facing up to this task.
What consequences have you promised the female managers as a result of the incidents in Zürs?
Claus von Hermann: We communicate very intensively. We also recognise where we have not reacted to misconduct, for example, when we notice that stupid comments are being made. If comments are hurtful, a line has been crossed, period. We have made that clear. We have also set out personnel consequences, issued warnings, and separated from individual employees involved. Incidentally, this was before the reports were published.
Is a separation from Peder Prahl also being considered – in order to „prevent damage to the company“, as the saying goes? Will his role in the company change?
Martin Huth: No. Peder Prahl is an excellent investor, and I still believe he is the right leader for our company. He is aware of his misconduct and has apologised.
Would it be possible for Peder Prahl to withdraw from the company as part of an IPO process?
Martin Huth: We have never considered an IPO, and we are not doing so now. So that is not an issue for us.
How is the fundraising for your sixth buyout fund going?
Martin Huth: With our private equity investments to date, we have achieved returns of more than three and a half times the capital invested for our investors. Fund V has also already achieved initial realisations that were above the historical average. A return of more than 25% per year exceeds what institutional investors want to see as the basis for a new investment during due diligence. These are first-class results. This success continues to attract investors.
What is the new debt fund doing?
Martin Huth: Triton Debt Opportunities, our opportunistic credit arm, has just announced the final closing of its third fund. With commitments of EUR 1 billion, the fund has exceeded its target size and exceeds the volume of the previous fund generation, which closed at EUR 744 million in October 2020. That is an increase of almost 40%. The fund has received capital commitments from a broad group of existing and new investors from all over the world. There are numerous pension funds, sovereign wealth funds, foundations, family offices and insurance companies involved.
You were fortunate with the successful IPO of tank transmission manufacturer Renk. The strong focus on industry could cause problems in other areas of the corporate investment portfolio. What about exiting older company investments?
Claus von Hermann: Selling our labelling specialist, All4Labels, is not an issue at the moment. Kelvion, a manufacturer of industrial heat exchangers that Fund IV took over ten years ago, has developed very well, and we are currently looking at the prospect of an exit. We are also sounding out the market for Leadec (formerly Voith Industrial Services), a technical industrial service provider. An exit would be conceivable here in the next twelve months.
You made good money from the IPO of Renk. Were you simply lucky with the timing?
Claus von Hermann: That has nothing to do with luck. Renk would have been a good investment case even without the war in Ukraine. We have turned a rather sluggish company into a fast and excellently positioned one.
Why is Renk boss Susanne Wiegand leaving the company?
Claus von Hermann: It is primarily her personal decision, which she has given good reasons for. Together, we have initiated a lot of change in the company. I think it is understandable that she now wants to reorient herself elsewhere.
How quickly will you exit Renk completely?
Claus von Hermann: Triton placed two-thirds of the shares within seven months of the IPO and is currently under no time pressure.
You have invested almost 10% in the listed drug developer Evotec from Hamburg. Do you have to ask the Ministry of Economic Affairs for permission to increase your stake further?
Martin Huth: You will understand that we cannot comment on this investment. But if there are any developments here, we will, of course, inform you.
The problems of the German industry are increasing. Don't you have to look elsewhere?
Claus von Hermann: No, I wouldn't say that in general. Not all of the German industry is in crisis. There are numerous successful niches here, and we are focusing on that. We have never been heavily involved in the automotive industry, which is now particularly hard hit. Germany, as the world's third-largest economy, remains very important to us.
The entire private equity industry is struggling with a deal slump. Exits are rare because the sellers of company investments can rarely agree on a price with the potential buyers. Do your investors have to wait a long time for returns?
Martin Huth: In fact, many private equity firms have come from a relatively simple time with lower capital costs, and they are now finding it more difficult with higher interest rates. But for us, this is a good time: This year alone, we have already returned 2.5 billion euros to our investors in six exits. I think that's impressive. And there will be even more next year. I'm very optimistic.
