Ivo Hobson introduced himself as the Head of UK at Mutares, an operationally focused turnaround investor founded in Munich in 2008. With 250 employees across 13 locations, Mutares is listed on the Frankfurt Stock Exchange and has a strong operational focus, deploying teams to extract synergies across its portfolio.

Operational Value vs. Financial Engineering: Hobson emphasized the shift towards operational value creation in the industry, rather than financial engineering. He believes that recruiting people is becoming easier as professionals are attracted to the opportunity to make a real difference in companies.

Corporate Carve-outs: Resistances and Opportunities: Hobson discussed the complexities of corporate carve-outs, where decision-making is driven by certainty, time investment, and reputational management. He highlighted the importance of identifying good people within these companies who can be retained or substituted with Mutares’ own teams.

Sourcing Transactions and Identifying Opportunities: Mutares sources transactions through direct relationships with corporates and corporate finance advisors. Hobson emphasized the importance of understanding the business, identifying why it’s underperforming, and developing a turnaround plan.

Complexity and Playbook: Despite the complexity of transactions, Hobson believes that in-house knowledge and experience enable Mutares to develop a playbook for executing deals successfully.

Insourcing Capabilities and Specialization: Mutares insources capabilities to maintain control and develop relationships with existing management teams. Hobson emphasized the importance of specialization, hiring people with individual skills in areas like sales, procurement, and finance.

Defining Success: For Mutares, success is not only about financial returns but also about stewardship, reputation, and selling to the right buyer.

Buyer Identification and Deal Lifecycles: Hobson discussed how Mutares identifies potential buyers during the diligence phase and acts on that knowledge during ownership.

Diligence and Turnaround Timeframes: Mutares factors in the timeframe required for a turnaround, considering both the investment and exit strategies.

Synergies and Growth: As Mutares grows, Hobson believes that extracting synergies across the portfolio will become easier, leveraging economies of scale and managing teams by region and segment.

Information Storage and Insights: Mutares stores information in a central database, sharing knowledge and lessons learned across the company through weekly calls and centres of excellence.

Driving Forces and Corporate Carve-out Cycles: Hobson finds his job fascinating, driven by the opportunity to make a difference in companies. He believes that corporate carve-outs will increase over the next three years, driven by macroeconomic visibility and the attractiveness of operational improvement potential.

Differentiation and CEO Pitch: Mutares differentiates itself through its track record of executing complex transactions and maintaining relationships with corporates. Hobson emphasized the importance of communicating this track record to CEOs.

Spotting Corporate Readiness: Hobson believes that corporates are often ready to engage in discussions when they come to market, having gone through long-term decision-making processes. Maintaining relationships and staying close to corporates is key to identifying readiness.

This fireside chat provided valuable insights into Mutares’ approach to identifying opportunities in corporate karma, highlighting the importance of operational value creation, specialization, and track record in the industry.

Key timestamps:

00:08 Introduction to ION Influencers Fireside Chats
02:44 Investment Sectors Overview
03:26 Operational Value in Investment
04:57 Challenges in Corporate Carve Outs
07:55 Identifying Investment Opportunities
11:21 In-House Capabilities vs. Outsourcing
14:04 Defining Success Beyond Financial Returns
15:35 Understanding Buyer Dynamics
17:59 Time Considerations in Turnarounds
20:07 Knowledge Management and Insights
21:07 Motivation and Passion in Leadership
22:00 Trends in Corporate Carve-Outs
23:22 Differentiating Mutares in the Market
24:28 Identifying Corporate Readiness