Managing businesses on behalf of investors
- Centerra* works with private equity firms and their portfolio companies’ management teams across Europe to create value. It participates in the management of the companies, focusing on key levers for value creation. Centerra assists with strategic redirection, operational improvements, organisational realignment, and negotiations with commercial and financial partners.
- Centerra brings a private equity ownership approach, working from within the management team of portfolio companies. Combining experience in private equity investment and hands-on operations, Centerra is responsible for delivering performance and results.
- Previously, Centerra managed several companies on a mandate from their owners, primarily international institutional and family office investors. These companies were involved in developing industrial assets as well as large scale and diversified real estate development projects in Romania.
- In aggregate, the companies previously managed by Centerra represent over €120m invested in assets and development.
- Each company managed by Centerra in Romania was formed to purchase and develop specific industrial and real estate assets identified by Centerra as having significant potential. Centerra negotiated the purchase and financing of the assets and built a team of professionals and experts with relevant skills from across Europe to execute on its value creation strategy by creating and managing businesses around these assets.
- As several development projects were being run in parallel, the organisation managed by Centerra comprised over 100 people, in addition to third party specialist teams assisting on specific projects.
- Centerra was responsible for the value creation in the businesses it managed and the crystallisation of this value through the sale of the companies or their assets. Centerra exited all the companies it managed in Romania.
* Centerra is the trade name of Centerra Capital Partners Ltd and its affiliates
Spirit and culture
Victor Vadaneaux founded Centerra following a 10 year career in Western European private equity. Romanian by birth, Victor was attracted by the opportunity to bring his experience and skills to his country of origin. In creating Centerra, Victor was motivated by the opportunity to develop high calibre projects. In leading the Centerra team, Victor worked to instil a culture of integrity, risk management and quality while upholding an entrepreneurial spirit.
By delivering projects of a high standard, usually difficult to find in a developing economy, Centerra was able to attract international financial and commercial partners, and ultimately buyers for the companies it managed in Romania. Coresi Brasov is a prime example of the high-value, complex projects Centerra was able to deliver due to its capabilities and access to Western capital and expertise.
Centerra was formed in 2006 to take advantage of the opportunities created by Romania’s imminent entry into the EU. At that time, many international investors did not have direct access to specific private equity investment opportunities in the new accession countries. The idea of Centerra was to identify specific assets that were available and presented opportunities for significant value creation. These were primarily real estate and industrial assets that could be acquired transparently at a good price, and which afforded significant development opportunities. Once acquired by investors, Centerra would organise a business around these assets and develop it to create value.
Centerra relied on the integrity and track record of its founder, and experience of its team, to attract investors. In the overheated market that preceded the financial crisis, Centerra found value in assets that other buyers didn’t have the vision to appreciate, such as industrial assets, and assets which required specialist expertise to develop. While many, especially local, investors sought quick gains through trading of assets, Centerra took a longer-term view of development. Centerra was thus able to create significantly more value through the delivery of quality projects.
Operating in an emerging economy, Centerra developed a process of anticipating and managing risks while entrepreneurially seizing opportunities. For example, in early 2008 it started the development of the Coresi Business Park, an office park housing IT and healthcare businesses that eventually employed 1,500 people, and which became a key source of the value created in Flavus Ltd. Similarly, Centerra used the financial crisis as a springboard for the development of the Coresi Shopping Centre by hiring the best development people from failed competitors. Another example is Centerra’s purchase of shares in Fondul Proprietatea at a significant discount to its later listing price on the Bucharest Stock Exchange.
The companies managed by Centerra corresponded to four distinct opportunities
Centerra identified several high-growth asset purchase opportunities in Romania. With access to management skills, development expertise and financial capabilities that were scarce in Romania, Centerra was able to capitalise on these opportunities. It formed a bespoke company structure for each asset, funded by dedicated investors.
Centerra attracted international institutional investors and family offices who invested over €120 million in aggregate to acquire and develop the assets. The Centerra principals personally invested alongside these external investors, ensuring a full alignment of interests in the equity of the managed businesses.
Urban regeneration of the site of Tractorul Braşov (renamed “Coresi Quarter”), a former 120ha (300 acres) industrial site located in close proximity to the Braşov city centre, as well as development of its massive industrial assets: plant, equipment and intellectual property.
Azureway Ltd and Atrox Ltd
Acquisition and eventual divestment of shares in Fondul Proprietatea, a €4bn unlisted fund initially formed by the government to incorporate stakes in many large and unlisted industrial companies primarily in the oil & gas and utilities sectors.
Re-development of a large period villa and surroundings into a premium retail space on Strada Verona in the very centre of Bucharest, and which became the flagship store of the leading bookshop chain in the country.
Acquisition and aggregation of land plots from multiple owners, and the zoning and partial development of a retail park project in a rapidly developing area on the outskirts of Timişoara.
The nature of the value creation was different for each company it managed:
- Flavus Ltd (Tractorul Braşov) — Centerra created value by acquiring the assets at a lower price than their development value. The assets were poorly marketed and the complexity and size of the industrial assets and the large site dissuaded other investors who were looking for quick gains.
- Azureway Ltd and Atrox Ltd (Fondul Proprietatea) — the lack of liquidity and clarity on the value of the numerous underlying stakes in unlisted companies meant a price that was significantly below the intrinsic value of the shares.
- Zoilos Ltd (Bucharest development) — Centerra solved complex legal, developmental and operational issues between the feuding owners and created a clean, developable retail site in the heart of the capital.
- Jomrita Ltd (Timişoara development) — the value created came from Centerra’s ability to aggregate many small plots of land from individual owners in order to create a large, developable site.
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