Very much international

A conversation with Martin Calderbank of Stirling Square Capital Partners, who says the London firm is all about crossing borders. By Robert Venes.

At the beginning of the month, Stirling Square Capital Partners, a pan-European mid-market firm, backed a €230 million ($293 million) management buy-in of Metroweb, a Milan-based fibre optics network business.
 
The transaction, in which London-based Stirling Square acquired a majority stake from AEM, a listed energy utility group, was the firm’s first in Italy and was led by partners Gregorio Napoleone and Stefano Bonfiglio.
 
Stirling Square brought in a new management team led by Alberto Trondoli, previously general manager at Metroweb and chief technology officer of Fastweb. The team also included former members of the senior management at both companies.
 
Martin Calderbank, a founding partner at Stirling Square, declines to comment on the specifics of the Metroweb transaction, which is still due to complete, but says that the deal is typical of the firm’s international approach to investing.
 
“At completion, Metroweb will be our ninth major acquisition and those nine are in 8 different countries ” he says. “We’ve completed transactions in a number of markets, now, including the UK, France, Sweden, Switzerland, the Netherlands, Belgium and the USA, and every investment more than one year old has been involved in cross border merger and acquisition activity. We’re very much international and generalist in our strategy rather than focussing on a particular sector or having quotas and targets for the number of transactions we do in any particular country.”
 
In 2006, Stirling Square has backed the £90 million buyout of Whittan, a UK-based storage business, from Permira in February; and 3SI Security Systems, a manufacturer of electronic security systems based in Belgium and the US, acquired from American Capital Strategies, a US buyout and mezzanine firm, for between £80 million and £100 million.
 
“We spend an enormous amount of time on trains and aeroplanes originating, executing and stewarding investments across Europe,” says Calderbank of the team, of which there are seven investment professionals. “We’re based in London and gather here for at least one day a week, which enables us to bring an international perspective to our evaluation of potential investments and support of the ones we have already made. This international perspective of the partners gives us an advantage in the way we look at the opportunities and threats that might be coming from particular countries.”
 
Calderbank is himself an eleven-year veteran of the private equity industry, having joined Candover in 1995 after four years as a management consultant at McKinsey & Co. He spent five years at Candover in London, as well as playing a part in the establishment of the firm’s operations in France, before joining the private equity group of Compass Partners International in 1999.
 
Stirling Square has only made one investment executive hire since its inception in September 2002, Emin Aleskerov, who joined last July, having previously been an associate in the financial sponsors group of Credit Suisse in London for three years. Says Calderbank: “Each time you add a person to your team you are affecting, one hope’s positively, the recipe that you have within the group, and for that reason we have been careful not to add to the team too rapidly. Hiring lots of people overnight could radically change a culture.”
 
Stirling Square is comfortable, says Calderbank, with a recruitment process that is as careful and opportunistic as its investment strategy.