Consistent returns at Main Capital Partners

€2.5 billion raised and a series of remarkable deals: 2024 has started excellently for Main Capital. Managing Partner & Head of Benelux Sjoerd Aarts updates us on the state of affairs at the B2B software specialist.

• 2024 so far: 5 strategic exits, 13 acquired platforms, and 28 buy-and-build investments. €2.5 billion raised
• Returns are above average: the recent exits yielded a money multiple of nearly 5.3x
• Focus on one-on-one deals: Main is a trusted partner with a large network in the B2B SaaS market.

2024 has been a busy year so far for Main Capital Partners, one of the fund managers in the portfolio of Marktlink Capital. Managing Partner & Head of Benelux Sjoerd Aarts talks about the flying start the software specialist has made: "We look back on a very successful first half of the year for the funds of Main Capital Partners. Looking at all the funds and all the deals, we have so far in 2024 invested in no less than 13 platform companies, completed 28 add-on acquisitions, and realized 5 strategic exits." Additionally, Main Capital has raised two new funds: Main Capital VIII and Main Foundation II, valued at €1.9 billion and €500 million, respectively.

One of the platform companies that Main Capital recently acquired is RiskConcile, a Belgian company that provides software to businesses in the field of "Reg Tech" – software that companies need to get a grip on complex laws and regulations. This sector is rapidly emerging, a fact reflected in the company's growth figures. "It is a very impressive company. In software, we often look at the 'Rule of 40', which states that the sum of the revenue growth percentage and the EBITDA margin should be more than 40. RiskConcile is closer to 100, so the company is growing very rapidly and profitably."

One-on-one  

What stands out about Main's deals is that they are primarily conducted one-on-one, without the involvement of auctions or competitive M&A processes. This is due to Main's strong network and twenty years of investment experience, says Aarts: "We currently know more than 15,000 software companies active in the regions we focus on. This allows us to build those relationships and generate our own deal flow. Of all the transactions we do, 70 to 80 percent are one-on-one transactions, without an M&A advisor on the other side." Entrepreneurs are eager to partner with Main due to the investor's track record, Aarts states: "We are seen as a thought leader in the software industry because of the knowledge and experience we have gained over the past 20 years in strategically expanding software companies."

In the RiskConcile deal, this experience also plays a role, as Main has already gained experience in the Reg Tech sector with the company Cleversoft. This company was successfully sold to Levine Leichtman Capital Partners after an intensive growth trajectory. "We know the RegTech market well because of this, and we can apply our experiences and lessons learned again."

Strategic exits 

Also on the exit side, the Main Capital team knows the market so well that they generally have a good idea of whom they want to sell to. Aarts provides the example of Textkernel, an HR company that was recently sold to the American company Bullhorn. Main is already well-acquainted with Bullhorn from a previous transaction and has always considered it one of the logical strategic buyers for Textkernel. Besides Textkernel, Enovation was reportedly sold for more than EUR 500 million to the French publicly listed company Legrand, and Optimizers was sold to strategic buyer Orisha. This network on the exit side also pays off: this year, nearly €1.2 billion was sold to strategic companies.

Top Performing Private Equity Fund Manager 

The good results have not gone unnoticed. Recently, Main Capital won an award for Top Performing Private Equity Fund Manager, presented by data provider Preqin. According to Aarts, the award is a testament to Main Capital's consistently strong performance: "Preqin calculates this based on the performance of all funds, not just one successful fund or a single good deal. The process is very focused on how consistent the performance is. And of course, we are engaged in this daily, demonstrating consistently good performance and consistent returns. This is also reflected in the numbers: we currently have 34 realized exits and, on average, have earned more than four and a half times our money on all those exits. Looking at the exits we have realized and plan to do in 2024, we expect to achieve an average money multiple of five times, so you could say there is an upward trend. This is partly due to our sector focus on B2B software companies and a sharp strategy regarding expansion and profitable growth."