Managing businesses on behalf of investors
Centerra* works for private equity investors, managing and helping build value in their portfolio companies. Victor Vadaneaux, on behalf of Centerra and using other Centerra resources, assists in a variety of roles that range from providing strategic redirection, managing the operational overhaul and organisational realignment of a business, leading negotiations with commercial and financial partners, to being mandated with the day-to-day management of the business.
Between 2006 and 2012 Centerra managed several companies in Romania across four platforms: Flavus, Zoilos, Jomrita, and Azureway/Atrox. In each case, Centerra had a mandate from the majority shareholders, reputable international institutional and family office investors, to manage the company and build value in the investment. These companies were primarily involved in developing industrial assets as well as large scale and diversified real estate development projects in Romania.
In aggregate, the companies that Centerra managed in Romania represented over €120m invested by in assets and development. Each one of these companies was formed to purchase and develop specific industrial and real estate assets identified by Centerra as having significant potential. Centerra built partnerships with investors and negotiated the purchase and financing of the assets. It then built a team of executives, managers and experts with relevant skills from across Europe to execute its value creation strategy.
As several development projects were being run in parallel, the organisation managed by Centerra comprised over 100 people, in addition to many 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 successfully exited all the companies it managed in Romania.
When not managing the businesses per se, Centerra brings a private equity ownership approach, working from within the management team of portfolio companies, in partnership with the CEO and his/her direct reports. Centerra team members also sit on the board of the managed businesses. Combining experience in private equity investment and hands-on operations, Centerra is responsible for delivering performance and results. Centerra’s business model is based on alignment of incentives, whereby it invests in the client businesses and also receives a management equity stake in these businesses alongside the rest of the management team.
Spirit and culture
Centerra was formed in 2006 to take advantage of the opportunities created by Romania’s imminent entry into the EU. At the time, many international investors did not have direct access to specific private equity investment opportunities in the new EU accession countries. The idea of Centerra was to identify specific assets that could be acquired, either industrial, property or financial, and which presented opportunities for significant value creation. Centerra brought Western investors and expertise to acquire these assets. Following the acquisition, Centerra would have a management mandate of the newly formed company that acquired the assets. Its mission was to create value by creating businesses around these assets, building an organisation of project managers and specialists to develop them.
Centerra relied on the integrity and track record of its founders, and experience of its team, to attract investors. In the overheated emerging market that Romania was before the financial crisis, Centerra found value in assets that other buyers didn’t have the vision to appreciate, such as idle and decrepit industrial assets, former factories built in communist times that were no longer viable on their original business model, and assets which required specialist expertise to develop. While many, especially local investors sought quick gains through the fast buying and selling of assets, Centerra took a longer-term view of development and building businesses. Centerra was thus able to create significantly more value through the careful planning and delivery of quality projects.
Operating in an emerging and rapidly developing 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 and a hedge on the Flavus investment as a whole once the financial crisis was in full swing. Similarly, in 2009 Centerra used the financial crisis as a springboard for the development of the Coresi Shopping Centre by hiring the best development people from competing and European developers who had folded in the crisis. Another example is Centerra’s purchase of shares in Fondul Proprietatea through the Azureway and Atrox platforms a long time before its listing on the Bucharest Stock Exchange.
Victor Vadaneaux co-founded Centerra in 2006 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 this country almost three decades later. The motivation behind the creation of Centerra was the opportunity to develop high calibre projects and build businesses whose quality and transparency stand out against local competition.
In leading the Centerra team, Victor worked to instil a culture of integrity and quality. It was essential to Victor that the team upholds the highest standards of these values, while at the same time maintaining an entrepreneurial spirit, taking advantage of a developing economy. In an emerging market, it was equally important to anticipate potential risks and be prepared to manage them when these materialised.
By delivering projects of a high standard, Centerra was able to attract international financial and commercial partners, and ultimately international 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 had to adapt as the financial crisis hit Romania hard. Its organisation had to change and restructure as it maintained the highest standards of quality and integrity it embodied from the start.
The companies managed by Centerra corresponded to four distinct opportunities
Centerra identified several high-potential asset purchase opportunities in Romania. Between 2006 and 2012, bringing management skills, development expertise and financial capabilities that were scarce in Romania at the time, Centerra was able to uniquely capitalise on these opportunities. It formed a bespoke company structure for the acquisition of each asset, which was funded by dedicated investors. Centerra acquired these assets across four platforms, attracting international institutional investors and family offices who invested over €120 million in aggregate in these companies. Centerra principals personally invested alongside these investors, ensuring a full alignment of interests in the equity of the managed businesses.
The nature of the value creation was different for each one of the four platforms Centerra managed:
Victor A. Vadaneaux
Centerra Management UK LLP
Centerra Capital Partners Ltd
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