Swiss investor club closes debut deals

Co-Investor, the Swiss-based private investor network with close ties to several family offices, is looking to facilitate up to E100m of investments for its members.

Co-Investor, a privately held Swiss financial services company, has completed the first two investments funded by its private investor syndicate.

The network offers its members, wealthy entrepreneurs in Switzerland and Germany, the chance to invest up to E2.5m over a period of three years, pooling member commitments to individual transactions in order to achieve an improved negotiating position and more attractive terms and conditions. Originally set up in 2000, Co-Investor acts as a trustee for and makes investments on behalf of its members. The company is also responsible for monitoring portfolio companies and planning and executing exits.

The group is run by Andrés Ebhardt, a former vice president of Dresdner Kleinwort Wasserstein Private Equity. The founding shareholders of the firm include Hans-Dieter Cleven, CEO of Beisheim Holding GmbH and member of the supervisory board of Metro AG, Jürg Kallay, managing director of Beisheim Investment Group and Hans-Dieter Rompel, a pioneer of German biotech investment.

“The business will operate along similar lines to firms such as [UK investors club] Braveheart”, said Ebhardt. “We aim to provide members with a regular flow of high quality deals. In contrast to traditional private equity funds, each member of the network has the option to decide of whether to invest in a transaction and how much to commit to each investment.”

The syndicate has 12 members already and is looking to take the total number of recruits in 2002 to 25. “We are primarily looking to attract entrepreneurs in Switzerland and Germany who have become disillusioned with the traditional fund of funds model”, said Ebhardt.

Investments will be made across a broad range of investments, including life sciences, security software and technology. Ebhardt wants to maintain a flexible approach to deal selection, as evidenced by the network's debut transactions which were completed earlier this year. The group committed SFr2m (E1.3m) to German-based SimonsVoss Technologies on behalf of two investors and is managing SFr0.5m in Hotelguide.com, with three members participating. The firm is also in the process of lining up an investment in an automotive business alongside 3i and Partners Group.

“We plan to make investments of up to E5m. Investments will always be made alongside experienced and qualified lead investors”, says Ebhardt. Co-Investor has already struck agreements with a number of European businesses, including the corporate venture divisions of Deutsche Telekom and Nokia, as well as cooperation agreements with Qino Asset Management and Advisory AG, Agility Capital and First Ventury AG in Karlsruhe.

Co-Investor's long-term aim is to build a E100m portfolio although Ebhardt says the firm is in no hurry to invest. “I think that valuations are still too high at the moment and we will wait until they become more realistic. We will look to achieve favourable valuations for our investments, given that we will always be an active investor willing to get our hands dirty.”

The private investor club concept is relatively new to Continental Europe, where another active organisation is MVI Partners, also Swiss-based. It is more established in the UK, where a period of several players entering the market during the venture capital boom of 1999 and 2000 has given way to a phase of consolidation.

Earlier this year, Venture Capital Report, a London-based group which claims to have raised capital for some 250 investments, agreed a merger with Pi Capital, a rival. Supper Club, another London-based organisation, is understood to also be in talks with the group. Another provider of co-investment opportunities to individuals is Cavendish Management Resources, which operates from a number of offices across the UK.