The Global Private Equity Competition is an initiative of the RSM Full-time MBA Private Equity club that started ten years ago. The case-based competition presents the kinds of challenges faced by private equity managers assessing an investment opportunity while taking into consideration the need to reduce greenhouse gas emissions. It attracts MBA students from around the world to evaluate and strategically analyse a case developed by the club. The organisers at RSM were led by club chairman Rafael Salas, and an accompanying symposium means the event is an opportunity to boost skills and connect with professionals from the financial industry across the Netherlands and Europe.
In this year’s competition, Valeo S.A., a French automotive supplier and partner to automakers worldwide, is engaged in designing innovative solutions for smart mobility with a focus on intuitive driving and reducing CO2 emissions. Could a 60 per cent reduction in its market value represent an investment opportunity for a private equity firm with a focus on the dynamics that the macrotrend of future mobility will generate?
The nine participating business schools were allowed to present more than one team, making a total of 16 teams working on the case. RSM was represented by two teams; the team that lifted the honours was Catalina Hoyos, Manuel Caballero, Christoph Schreiber, Rocco Maraschiello, and Hadi Masihkhah. They had been coached by RSM visiting faculty Nicolas Constantinesco and senior lecturer Dr Arjen Mulder. In second place was the team from the Indian Institute of Management Ahmedabad (IIMA): Saurabh Pinjani, Krunali Shah, Anish Sahni, Aditya Gogri, and Kartikey Gupta.
Initially, each team was allowed 30 minutes in front of the jury; 20 minutes to make their presentation, and an additional 10 minutes for questions from the jury to be answered. In the final round, three shortlisted teams presented their proposals and considered additional ‘twist’ information around the case. For this they were allowed another 40 minutes in front of the jury.
The participating business schools, in addition to RSM and IIMA were: HEC Paris; INSEAD; Cranfield; University of Cambridge Judge Business School; SDA Bocconi School of Management; University of St Gallen; and Mannheim Business School.
RSM’s winning case
The winning RSM team made a detailed evaluation of the markets and trends of the automotive and mobility sectors, and how Valeo’s existing strategy could be leveraged. The company had already made a strategic transition from a traditional auto parts supplier to a leader in technological innovation with its own R&D activities but had suffered a loss of profits and a large drop in the price of its shares, and no longer had a unique competitive advantage. The RSM team took into their consideration electric drivetrains and power alternatives such as hybrid technology to reduce consumption of fossil fuels, autonomous and connected vehicles, and how the digital revolution affects urban mobility. The new business model they proposed impressed the judges.
Alumni on the jury
The jury featured several RSM alumni: PwC’s Director Deal Data Analytics & Strategy Martin Kerkhof; CAIA Masterdam’s Director Christos Angelis; Liberty Global’s Director IP & Ventures Borja Varela; and FMO’s Investment Officer Private Equity Heli Vallejo. Other members of the jury were Assistant Professor at RSM Dr Solomon Zori; Matthieu Tak of Alfa Management; CFA ABN AMRO’s Director, Investment Banking (M&A) Pranav Shah; and Slingshot Ventures’ Investment Manager Ernst Rustenhoven.
The accompanying symposium on the preceding day was attended by 75 private equity professionals representing 28 nationalities. They addressed the important current topics and trends of private equity and venture capital markets during the last decade of accelerated expansion under the theme of ‘Navigating across an expanding industry’. Keynote presentations covered the subjects of venture capital performance and challenges, decision-making, due diligence and data analytics in private equity, strategy, and career development in the industry.