Nasz Mentor Klaus Hermann, Key Facts and Attributes

Klaus Hermann - Key Facts and Attributes

Mr. Klaus Hermann is a partner-level Private Equity Professional with a global background, a pan-European outlook with focus on CEE/Germany, and a successful track record in post-deal value enhancement through operational excellence and restructuring.

Career with international focus. Mr. Hermann is a German citizen, bi-lingual German/English and fully operational in Polish without translator. Over the last 20 years he worked successfully in the US and Europe for and with over a dozen different nationalities, having had German, American, French, Belgian, British, Polish, Danish, Dutch, Hungarian, Romanian, Russian, Turkish & Bulgarian peers, superiors or subordinates.

Private Equity background based on a decade-long track record with strong hands-on element as part of renown international financial institutions (AIG and Julius Baer).

As MD and COO in one of the largest Central European PE Funds, he was focused on:

o originating, structuring, negotiating and executing transactions

o enforcing investment discipline across the full Private Equity Life Cycle,

o adding perspective, understanding & operational expertise in pre & post- transaction context

Especially he is used to take full responsibility for:

o directly overseeing all due diligence work, including the appointment and proper management of outside specialist advisors where needed;

o post-acquisition value enhancement initiatives, including re-engineering interventions, Kaizen initiatives and other restructuring strategies:

Ø shape, initiate, refine & drive pro-active value-creation investment theses for portfolio companies in light of changing sector trends or to realize latent growth potential

Ø management development and coaching within portfolio companies

Ø helping organizations to address cross-cultural issues in post-M&A integration

o supervisory board mandates,

Beyond this, his dual-role as COO exposed him to a number of additional challenges, like:

o supervision of valuation & financial modeling work - performed by 5 Analysts/Associates;

o accountable for all Appraisal Reports presented for approval to the Investment Committee;

o lead-role in cross-border M&A transactions

o building a compliance and performance monitoring function covering internal PE Standard Operating Practices, as well as looking outwards towards portfolio companies.

His strength lies in the ability to combine business acumen with an appreciation for both organizational aspects as well as operational detail. Given access to the right resources, he can quickly immerse himself in the relevant industry knowledge related to a potential transaction. His background in international business as well as German engineering, in combination with a top-grade education from two of the most challenging universities of the US (Harvard and MIT), and his multiple merit-scholarships from the German National Scholarship Foundation (Studienstiftung des Deutschen Volkes) and the DAAD speak for themselves with respect to his academic excellence and abilities in logic & analysis.

Learning by Doing: During the last 10 years, Mr. Hermann worked on over 60 potential Private Equity transactions, investigating 25 of them in depth from an operational, financial and managerial perspective. This has allowed him to:

o sharpen his eye for critical organizational/operational issues,

o accumulate a healthy stable of methods for rapid, sharp-edged diagnostics of existing companies, their operations, their organizations and management… including the need for change when and where appropriate

o hone his skills to communicate clearly & convincingly on a principal level during deal negotiations and later during value creation and exit preparation.

Direct peer-interaction with principal decision makers and owners as well as working closely and collaboratively with Supervisory Boards, CEOs, CFO and COOs of portfolio companies is an integral part of Mr. Hermann’s experience.

Sample of Sector Expertise - Retail: In 2000, Mr. Hermann led the investment into a rapidly expanding convenience retail chain and spent 5 years on the Supervisory Board with direct ongoing contact to management. The company grew 5-fold from 350 to 1700 locations during that time, and allowed him to gain a deep front-line exposure to the challenges of building and running a nation-wide retail chain. At the same time the need to rethink, revamp and refine the original business plan twice during the rapid expansion phase, forced Mr. Hermann to navigating the challenges of constructive engagement with a strong incumbent management team, while upholding the discipline of restructuring the initial approach. The company was sold in 2007 for USD 175mln providing a return of 3.5x money for the PE fund.

Similar experience has been gained in the following industry sectors:

o Transport &Logistics

o Light Manufacturing & Engineering

o Consumer Finance & FMCGs

o Infrastructure & Real Estate

Earlier in his career Mr. Hermann was leading Privatization efforts for the Polish Gov’t, gaining deep exposure to IPOs while coordinating the flotation of the first 5 companies on the Warsaw Stock Exchange with the help of international advisory firms. Later Mr. Hermann initiated and led a ground-breaking privatization deal origination-drive covering 20 industrial sectors, including the whole Oil-Sector, all in all over 500 companies, resulting in 40 international M&A deals, worth $ 1 billion in total. As part of the successful implementation, he created a capital markets privatization team from scratch.

Under his leadership and with the support of a leading UK Consultant on Organizational Development, within 2 years this team structured, contracted and directed 25 advisory consortia with fees totaling USD 30 million for leading Western I-Bankers, Management Consultants, Lawyers and Accountants (Lazard, Rothschild, McKinsey, Bain&Co, Allen&Overy, KPMG, PWC, etc.), resulting in a combined measurable net-effect of USD 350 mln extra cash-value for the Polish state.

The skills, experiences and insights gathered while working in Private Equity, M&A, Corporate Restructuring and Turnarounds over the last two decades, make Mr. Hermann a unique resource in today’s pan-European Private Equity context. German roots, an engineering background, a US-Business Education, working inside the Polish Government, working in the US, and later for global PE firms across CEE add up to a solid background to face today's global challenges.

Mr. Hermann spent over a decade to build the contacts, relationships, insights and awareness of how to operate successfully in a pan-European context. He can claim credibility and insider status in both Germany and CEE, giving him a truly unique outlook, and the ability to operate effectively from a German as well as a CEE base.

This background together with his tested professional “eco-system” put Mr. Hermann in a good position to help companies as well as PE Funds in defining and implementing strategies for successfully accessing opportunities involving a CEE/German dimension.