Hans Swinnen, 3d investors: ‘Private equity is people management’
Partner Hans Swinnen has, together with a strong team of seven colleagues, been working on the development of private equity activities within Benelux investor 3d investors for eighteen years. In the first part of his career he worked in the tourism industry in Belgium, where he quickly made a career; from product manager to CEO of Thomas Cook Belgium. Under his leadership, the travel company became the market leader with a turnover of 800 million euros and its own airline. He was also elected Marketer of the Year by Trends in 2005.
From 2006, he started using his passion for developing companies for 3d investors, an active investor that helps companies grow, develop and internationalize. Swinnen can fully utilize his extensive management experience. Originally, the investor was only active in Belgium, but three deals have now also been concluded in the Netherlands (in-lite, DSIT and Care Cosmetics) and a Dutch Investment Director has been appointed in Koen Haenen.
Patient family capital
Hans Swinnen started working at 3d investors because of their clear philosophy and passion for helping companies with growth potential flourish. The capital comes from two families: the Donck family (80%) and the Desimpel family (20%). “Both families have been successful in Belgium for generations, with one active in dairy products and the other in building materials”, says Swinnen. “The investment portfolio of 3d investors includes strategic participations in listed companies and a private equity branch, as well as a development arm in residential real estate.”
As a family investor, 3d investors has an open time horizon and is hands-on involved in the companies in which they invest. “Our participation averages seven to ten years, long enough to really grow the company and realize its maximum potential. Growing from 1.0 to 2.0, to 3.0, to 10.0. That’s what drives us. We have the time and the resources, and we are real hands-on investors. That makes us different.”
Although the name suggests otherwise, 3d investors is not only active in the technology sector, but also in various other sectors such as secondment, lighting, outdoor furniture and communication equipment for ships. “3d investors is named after the three founders: Josef Donck, Robert Donck and Luc Desimpel at a time when 3D printing and virtual reality were not yet available”, says business builder Swinnen.
From local heroes to global champions
The company’s investment strategy revolves around finding niche companies with growth potential and strong entrepreneurs. 3d investors does not concentrate on specific sectors, but looks for companies that excel in a specific area and believe in profitable long-term growth. Examples of this are in-lite, a company specialized in outdoor lighting, and Apart Audio, an audio company that focuses on sound for public spaces. Another example is a software company called 3P, which makes software for public procurement, with strong positions in Belgium and France. “We not only invest in the company itself, but also in international expansion”, says Swinnen.
In december 2022, 3d investors invested in in-lite, a Dutch specialist in outdoor lighting.
The expansion to North America, for example, is a complex process that requires investments. However, every international expansion is different, and the strategy varies per company, Hans Swinnen explains. “For example, our subsidiary Plastiflex already had factories in North Carolina, Canada and Mexico. During this expansion we have of course built up a lot of experience and a network in North America. That helped us make an American acquisition with Apart Audio. And that experience has helped us to build a sales network at in-lite in America. At Pauwels Consulting, a consultant and secondment provider in Life Sciences, IT and Engineering, we have again applied a buy & build strategy. We made a total of ten acquisitions in Belgium and the Netherlands, which resulted in turnover growth from 25 million euros to 150 million euros. In 2023 we sold the company to Andera Partners who will help the company further expand in France through acquisitions. In short, every case is different. We immerse ourselves in the unique culture and market positioning of each company to determine the best internationalization strategy.”
Managing the culture factor
Hans Swinnen recognizes the risk of destroying a corporate culture during integration and is therefore extremely alert to this. “Companies that have been acquired almost always worry that everything will change and that the acquiring party thinks it knows everything better. That is why we really take the time – at least two years – to get to know each other well and learn from each other. We do this from a relationship based on equality. And then you get situations in which the acquired party suddenly says; ‘We actually like the name Pauwels Consulting better; Can we use that name?’ And: ‘We actually think Pauwels’ IT systems are better, shouldn’t we use them?’ Then the integration follows naturally.”
Keeping focus on the distinctive character
Swinnen explains how he and his colleagues assess potential investments. They look at the uniqueness of a company: why do customers choose this company and not another? This may be related to the product, quality, price point, positioning, brand and service. They also emphasize the importance of corporate culture, such as customer friendliness, and the opportunity to further develop these unique aspects at an international level. The historical track record and financial metrics are also evaluated, but the fit with management and shared strategic vision for the future are essential for an investment. Swinnen: “Investing is not only about quantitative analyses, but also about human knowledge and a feeling for the business to understand why a company is successful. Culture is of course very important. You don’t win a championship with good players. You win a championship with good teams. It’s not rocket science. We go to customers. We go to trade fairs. We visit suppliers to understand their unique positioning. And then our role is mainly to ensure that we maintain a clear strategic focus on what makes the company unique and that the company does not become too concerned with peripheral matters. That is a pitfall that many companies fall into.”
3d investors also owns a stake in Studio 100, home of amongst others Samson & Gert, Kabouter Plop, Maya de Bij, Wickie de Viking, Piet Piraat, K3 and Mega Mindy.
The importance of strong relationships and people management
With a whole series of crises, it remains a challenging time for the private equity sector. “The good thing for us is that we always invest throughout the cycle. The store remains open: Crises are also often an opportunity. There are still great opportunities for private equity, such as succession issues, but based on the partnership model. We have no pressure to buy and sell. We continue to look for the one to two right companies per year that fit within our strategy.”
Finding suitable takeover candidates remains a challenge, as Swinnen notes: “I think we have seen fewer, in our perception, very nice files in the past year.” He points out a difference in price expectations between buyers and sellers, which makes finding the right targets difficult. Specific to the Netherlands, he mentions bank financing as a challenge: “Banks in Belgium are more supportive in financing private equity transactions than Dutch banks.” Swinnen also points to technological disruption as a factor to consider in long-term investments: “If you invest for seven to ten years, you always have to be very sure that the company will still be successful in ten years.”
Finally, Swinnen underlines the importance of strong relationships in the sector and managing reputations: “And trust comes on foot but leaves on horseback, so we are very sensitive to our reputation in the market.” He emphasizes the value of transparent communication and building trust in the long-term relationships they have built with banks and other partners. “It is much more a people business and people management than you would sometimes expect in a world where people always think, it is only about the numbers and the ratio. It is mainly about people and emotions. Gut feeling, empathy, and linking that to a clear head. Doing the right things together with the emphasis on doing that together. Don’t force something because you happen to have the majority. That doesn’t work anyway; if people don’t want it, it’s not going to happen. And I think that as 3d investors we can make a difference there and there is probably the link with my past as a manager.”
And if you do the human aspects well, you can achieve your ultimate goal as an investor. Hans Swinnen lights up when he discusses it: “When teams and great companies fly higher and you see them grow and flourish, that still makes me happy every day. When you see that a company simply does the right things, that its customers and employees are satisfied, that the service is good, that is what I think is the best thing there is.”
