In this ION Influencers fireside chat, host Giovanni Amodeo sat down with Karsten Langer, Managing Partner at Riverside Europe, to explore the evolving world of value creation in lower mid-market private equity. With nearly two decades at Riverside, Langer shares deep insights on strategic growth, operational transformation, and adapting to macroeconomic volatility.

Key Topics Discussed

1. Riverside Europe’s Investment Focus

• Solely dedicated to the European lower mid-market.

• Hands-on, operational value creation over financial engineering.

• Focus on scaling small businesses through professionalization and expansion.

2. What Value Creation Means in 2025

• Still the core of private equity: making companies “bigger and better.”

• Involves strategic leadership upgrades, market expansion, new product development, digital transformation, and operational efficiency.

• Customized “playbook” applied case-by-case but includes a consistent framework.

3. Macroeconomic Factors Shaping Strategy

• COVID-19, energy crises, and geopolitical tensions (e.g. Ukraine war, US tariffs) have accelerated the need for resilience.

• Langer highlighted examples like Ipastello di Brescia adapting early to US tariffs through North American manufacturing.

• Emphasis on resilience and localization, such as reshoring in strategic industries like pharmaceuticals and semiconductors.

4. Onshoring, Reshoring & Geopolitical Shifts

• Case study: Dastex Group, created via 7 add-on acquisitions to meet growing demand for cleanroom supplies across Europe.

• Push for shorter, more secure supply chains post-COVID and amid global tensions.

5. Operational Value Creation Playbook

• Starts before acquisition—with operating experts embedded early in due diligence.

• Core areas: revenue growth, margin improvement, digital enablement, and bolt-on M&A.

• Operating team includes sales, finance, digital, and sector specialists.

6. Talent & Team Structure

• Operating professionals often have CEO-level backgrounds.

• Incentivization aligned with portfolio performance; investment teams linked to fund-wide carry, while operators often tie to company-level equity.

• Balance of internal experts and culturally aligned external advisors.

7. Platform vs. Add-On Deals

• Temporary industry shift toward add-ons due to muted platform deal flow.

• Langer expects platform deal resurgence in 2026 as market sentiment improves.

8. Sector Selection and Investor Expectations

• Riverside targets stable, growing markets (e.g. healthcare, aerospace, semiconductors).

• Investors now more focused on macro risk mitigation (e.g., tariffs), but value creation fundamentals remain centered on micro-level execution.

Key timestamps:

00:07 Introduction to the Fireside Chat
00:35 Background of Karsten Langer
01:20 The Importance of Value Creation
03:33 Macroeconomic Factors Influencing Value Creation
05:36 Navigating Tariffs and Market Changes
07:26 Strategic Planning Amidst Uncertainty
09:44 Analyzing Underlying Markets for Investment
10:50 The Value Creation Playbook
12:52 Team Dynamics in Value Creation
17:17 Focus on Add-On Acquisitions vs. New Deals
19:10 Anticipating Risks in the Market
20:22 Sector-Specific Value Creation Opportunities
21:11 Evolving Investor Conversations on Value Creation
22:26 Conclusion and Closing Remarks