The take-off of MPD SME CAPITAL
Since May 2019, when MPD completed the first design of its first stand-alone investment initiative MPD SME Capital One (MSCO), the project experienced high-speed growth within less than one year. Within a month from our first investor presentation, we collected 12 hard commitments from early investors, and by the end of 2019, they increased to 23. In parallel, we attracted attention from institutional investors, such as wealth managers from Monaco, Geneva, London and Milan, to whom we also delivered presentations during the Swiss Growth Forum in October 2019. Under this rapid development, MSCO ended 2019 chased by professionals willing to join our shareholders parterre, made out of seasoned professionals bringing value, weekly, to MSCO governance, execution and strategy.
In the meanwhile, in August 2019, MSCO made its first majority investment in La Centrale de Prévoyance (LCP), a Swiss insurance broker regulated by financial authority FINMA, and formerly trading under the name “La Centrale de Financement CH”, a spinoff of World-famous Kering group.
MPD team works closely with all existing management and the LCP team in Geneva, and after its first management quarter, LCP monthly revenues tripled by end of Q4 of 2019.
In October 2019, we held our first Shareholders A General Meeting in Geneva where we collected a number of qualified inputs. After 2 months we created a brand-new pipeline of over 30 acquisition targets, and we improved our reporting tools to maximize the transparency about MPD SME Capital One assets. Today the process provides à la carte reporting to any investor requiring any asset detailed report. Needless to say, the October 2019 investors weekend has proven to be a blast of senior management skills in a mix-and-shake of sector and functional areas. Our investors make us stronger and, to our knowledge, we are the unique financial player that is brave enough to design an instrument allowing such a statement.
We entered 2020 with a number of staples: at MPD we are passionate, caring about investors and sure that we will put all the necessary effort in order to carry MSCO investment initiatives to the next level. We have skin and blood in the game.
By leveraging on our increasing knowledge of LCP, we decided to move forward and complete the control acquisition, landing on an 81% ownership on January 31st 2020. We currently value this as 4 digits return deal. We are an inch away from firming such performance and we will then keep pushing as we need MSCO to leap to the next level.
Asymmetric, unreliable and illiquid assets versus MPD Partners
Most people associate Private Market with information asymmetry, unreliable data and illiquid assets. However, such environment has a big potential for asset classes like Private Equity and Venture Capital. Amid a general underperforming IPO environment, and PE funds reportedly struggling in trying to find ways to spend the record amount of cash they are sitting on, a deviation from the trendline is unlocking surprisingly high returns and opens room for new market entrants. Especially those that do not need to showcase the largest investment during pub talks. Here comes MPD Partners that, founded by the hedge and mutual fund top performing managers, has the mid-term goal of managing regulated funds focused on SMEs.
Started as an idea less than a year ago, it become a fast-paced and tangible reality, with a continuously increasing track record. Certified results do the talking about how a group of financial and industrial professionals with worldwide experience, and fancy backgrounds, started to attract interest from the market.
How did we land in 2019
In October 2017, MPD received a performance improvement mandate from Digital Mill srl, a 4 million revenues software company, with Mirco Coccoli appointed as CEO. With the objective to restore profitability, Digital Mill ended 2017 with positive double-digit EBITDA margin of 16%, leaving behind the negative result of 2016 (EBITDA margin -6%). The long-term operational improvements applied by MPD Partners with the outstanding execution lead to the appointment of MPD for the integration between Digital Mill, its mother company DOING and the multinational software giant Capgemini, the acquirer of DOING and Digital Mill on October 31st, 2019. This deal represents one of the major SME deals of 2017 and 2018 on the Italian soil and, concerning MPD, we can just say that we returned 8 times the amount that we have been asked by investors 18 months earlier. An unprecedented performance in SMEs that tickles investors curiosity. At MPD we know that we need to make it a habit more than a one-off event.
The competence of our young, yet, proactive professionals lead MPD to another remarkable mandate. Starting from February 2018 MPD Partners has been designing Sentient Blue, an Italian start-up operating within the drones’ industry. In September 2018 MPD introduced the start-up in New York State, with the aim to participate to the GENIUS NY Accelerator Program, the world’s largest drones’ competition. The latter is part of the Unmanned Aerial Systems ecosystem and backed by the State of NY Governor Andrew Cuomo, who invested for the development of drone industry in the area a total of $250 Million per year since 2012, i.e. half the total regional economic development budget. In April 2019 MPD Partners succeeded in making the project become a suitable profile for investors and lead the company to receive $1 Million from State of NY by being listed as the most promising company in New York State.
Success attracts more success, and, thanks to the result obtained by Sentient Blue, MPD Partners was appointed as Investor Member within CenterState CEO, an economic development strategist, business leadership organisation and chamber of commerce, committing to manage every year $ 500 millions allocated by Governor Andrew Cuomo to the New York State economic development.
MPD Partners has also become a close collaborator of Syracuse University and Blackstone Launchpad servicing Central New York by introducing valuable businesses and investors from Europe, Switzerland and UK who are willing to participate in New York State economic development. This is another concrete tool at the service of european SMEs with scope to expand US market presence, thus a unique opportunity for MSCO.
We are grateful for your continued support and we look forward to continuing writing this story of performance and success.
Mirco Coccoli and all the MPD Partners Team.