Improven and Quadrum Capital: ‘Sustainable investment without exit strategy’

Last month reported that Improven and Quadrum Capital have further expanded their relationship. We also noticed that more and more advisors are getting into the hands of private equity. That made Improven management partner Jan Bosman frown. So we called him and Dennis de Buijzer from Quadrum Capital so they could explain to us why this deal is really different from all the others.

Anyone who follows the Dutch consulting industry will have noticed that there is a great deal of consolidation going on. Every week – sometimes more often – we can add a new acquisition or merger, whereby the ever-growing advisory groups can often pull on the deep pockets of private equity funds.

It is therefore not surprising that we have also included the new agreement between the financial, risk and IT consulting firm Improven and the investment company Quadrum Capital on this list, Jan Bosman also admits.

“Strictly speaking, it’s not wrong either,” the managing partner begins. “Quadrum Capital actually invests with private capital. But there is a world of difference between the partnership we have entered into and the usual private equity investment.”

“To begin with, Quadrum Capital is not a strange company coming to pick us up,” Bosman explains to us. “They have been involved since the inception of Improven in 2016, but have now formally taken interest from their foundations.”

No panting investors down the neck

More importantly, he emphasizes, Quadrum Capital is making this new investment from its new Evergreen Fund. And that’s where the biggest difference lies with private equity, as we usually know it.

A fund usually has a specific maturity – often five years – where the goal is to maximize returns. We are fully committed to rapid profit growth in order to subsequently sell the acquired party for as much money as possible. This often involves high borrowing and financial structures to create maximum leverage. That does not apply to the Quadrum Evergreen Fund, Bosman explains.

“It is a fund that uses loans to a small extent or not at all and without an exit strategy. It does it completely differently than a usual private equity investment, where the return is given at the exit. ”

“Improven has been growing for five years in a row and is able to excel in a market that also offers plenty of opportunities for the future.”

“The return here is not on a short-term exit, but the goal is to invest long-term in sustainable, profitable, solid organizations that simply have a sustainable return year after year. Therefore, there are no investors in the fund who gasp at us with the question of when the investment has doubled. ”

Dennis de Buijzer, Investment Manager at Quadrum Capital, explains that the Evergreen Fund is specifically aimed at long-term participants. “The forces are made up of entrepreneurs, former entrepreneurs and enterprising families,” he says. “Some participants want to build something for their children. Then they do not wait for their assets to be released after a few profitable years and have to be redistributed again. ”

United in sustainable growth

The focus of the collaboration is therefore solely on sustainable growth, and it was precisely here that the two partners met: Improven was looking for a party to financially support this long-term growth, and Quadrum Capital for a party with a healthy growth potential.

“What we’re working on at Improven is building a great consulting organization that can be sustainably successful,” says Bosman. “It’s essential that we maintain our individuality, and then it’s very nice that you’re working with an investment fund that shares that goal.”

Another important feature is that Quadrum Capital is not actively involved in Improven’s business. De Buijzer: “We act as a sparring partner and stay somewhat more in the background. We therefore only invest in companies with professional and independent management, and this is definitely the case with Improven’s partner team. ”

Dennis de Buijzer, Investment Manager, Quadrum Capital

“In addition, the agency has been growing for five years in a row and has managed to stand out in a market that also offers plenty of opportunities for the future,” he says. “Companies are increasingly focusing on risk, finance and IT. In addition, Improven serves both private and public customers, which ensures a stable base. ”

Grows based on your own strength

Improven wants to build on this foundation with the support of Quadrum Capital. Bosman emphasizes that the agency remains true to its existing focus on finance, risk and IT. “That specialization is an important part of our success. We are now recognized for the quality we offer there, and we will of course continue to do so. ”

However, the office continues to move with the constantly evolving field. “You can now see that project and program management is becoming increasingly important. Large organizations in particular have to deal with so many projects in their transformation programs that it becomes a challenge to stay in control. We help them with that. ”

In connection with this, change management also plays an increasingly central role. “In the ongoing digital transformation, it’s no longer just about content or technology, but at least as much about taking people on board and anchoring change.”

“We are strengthening this dimension in our services at an accelerated pace, and we also select based on this when we hire new talent. Characteristics such as attachment capacity and organizational sensitivity are essential here.”

To complement organic growth, acquisitions are also being considered, but according to Bosman, it is certainly not a major buy-and-build strategy. “We did not join Quadrum because of a large pot of money to buy competitors, but selective acquisitions of small, complementary players are on the horizon.”

He can also report that Improven is already “pretty serious” about one takeover. “Hopefully we can announce more about it soon.”

Continue on the chosen path

What is prevalent in Bosman’s history is that the collaboration with Quadrum Capital should primarily be seen as a way in which Improven can energetically continue on the path it has already taken.

“Thanks to this comprehensive collaboration, we can continue even better with what we’ve been doing for years: controlled growth based on quality.”

“It’s not a big break in the trend,” he says. “We continue to do what we have already done, our strategy is and will continue to be making fun projects, for sweet customers with sweet colleagues. The partner team remains the same and will be strengthened in the coming years in line with the growth of the organization. Our team has responded very positively. ”

“Of course, our people also see what is happening in the market, how many parties are being picked up,” he explains. “The message we are sending here is that the stable shareholder we already had on board has once again perpetuated the partnership so that we can continue to grow on our own terms, by preserving our own identity.”

An important part of that identity also lies in the way in which Improven commits itself to broad social impact. For example, the agency agrees concrete and measurable social goals with clients in framework contracts, invests a percentage of revenue in social returns and works continuously with themes such as sustainability, circularity, inequality and diversity.

“We also apply our own expertise,” Bosman says. “For example, for people at a distance from the labor market. For example, we guide status holders to work and learning places, and we offer them professional guidance. Think about education in economics and data, advice on preparing a CV and LinkedIn profile and guidance in searching for and finding jobs. ”

This important pillar of Improven’s culture will therefore remain proud, Bosman assures us. “Thanks to the growth that Quadrum supports, we can only increase our positive impact further.”

The same goes for the extensive growth and development opportunities that Improven offers its professionals. “That’s another part of our message to our people: Our growth also creates new opportunities for our people to grow with them. A lot of them have now become seniors, and at some point they also enjoy being the driving force behind a team.”

“With Young Improven and our programs for intermediaries and seniors, we already had a good ongoing learning process, but it also offers new career opportunities,” he explains. “And it comes full circle, because it again contributes to our growth – where finding and retaining talent is one of the biggest challenges today.”

“In short,” Bosman concludes, “thanks to this comprehensive collaboration, we can continue even better with what we’ve been doing for years: controlled growth based on quality by developing our talents and helping customers optimally.”

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