Montefiore Investment: Masters of Growth-Driven Transformation

Publicado em 15/12/2018

Private Equity teams that enjoy in-depth work on their portfolio companies are rare. Montefiore Investment are one of them.Their ethos can be explained by the fund founders’ history, which triggered a truly different vision of investment.

Created in 2005, Montefiore Investment was able to raise its fourth investment vehicle in barely three months. While the first fund had only €40 million, this latest one quickly attracted €420 million. Less than half came from French institutional investors, the rest from LPs from all around the world. How did they surpass the €350 million target and reach an LPs demand in excess of €700 million? It mainly comes down to having one of the highest performances on the market, with a net ROI of 21% across their three funds. And the fact that three-quarters of this performance was generated from the portfolio accelerated growth.

Using leverage as a basic tool and not the core of their investment strategy, Montefiore’s team built its reputation using its undeniable expertise in generating profitable growth in the service sector. They eagerly focus on what they call locally supplied services (économie présentielle in French), investing in companies with revenues between €20 and €200 million.

What makes the team so original is its genuine taste for developing businesses. Owners and managers will find in Montefiore’s leaders true partners who are simultaneously investors and strategic entrepreneurs. While finishing his Centrale Paris engineering & economics degree, Éric Bismuth co-founded a software company for managing positions on the MATIF futures exchange. He then joined The Boston Consulting Group, soon becoming Managing Director in charge of the services sector in France, and the hotels and leisure practice worldwide. Daniel Elalouf worked at Morgan Stanley, then at Permira, and brought an extensive knowledge of finance, but also insights on the professional services and technology sectors. This team’s strength and focus grew further with the 2011 arrival of Jean-Marc Espalioux, former Chairman of Accor and Financière Agache PE. Every year since 2005, the team has become stronger with additional recruits.

In 2005, Montefiore’s deep expertise led to the team being called in by Eurazeo to co-invest in B&B, the budget hotel chain. Later, it was Carlyle who tapped Montefiore Investment as co-investors, again on B&B Hotels and when they took over Homair Vacances. The owners and CEOs of other service companies like Voyageurs du Monde, Asmodée, BVA, Interflora, Mister Fly, and more recently Isabel Marant, also chose this atypical investor.