Building consumer conviction with Advent International

While current sentiment around private equity investment in the
consumer sector is mixed due to its exposure to inflation and
consumer demand, sponsors are still finding attractive
opportunities to deploy. Advent International managing director
Nicolas Chavanne joins the podcast to discuss the GP’s approach
to investing, how it assesses the market, and how and why it aims
to secure optionality on exit.


Ahead of the interview with Advent’s Chavanne, funds editor
Harriet Matthews hosts private equity reporter Ero Partsakoulaki
to run through Mergermarket data on sponsor activity in the
consumer sector. The team explores the trends and drivers behind
activity, as well as recent Mergermarket intelligence about
upcoming processes in the sector.


Chavanne began his career in investment banking, following which
he spent 14 years with private equity house Towerbrook Capital
Partners. He joined Advent International in 2019 to leads its
retail, consumer and leisure investments.


He explains how “you have to be a bit of a truffle pig” when
sourcing the right deals in the consumer sector, and breaks down
Advent’s definition of “luxury” investments and its consideration
of consumer demographics.


The conversation also touches on exit options and value creation.
“it’s relatively easy to buy, but we measure success by the
exit,” says Chavanne. ”We get excited when we have what I would
call multi-threaded exit optionality – you don’t want to be stuck
with one way out.”


Following the interview, the editorial team return to discuss key
takeaways, as well as what the Birkenstock [NYSE:BIRK] IPO means
for consumer dual-track exits.


0:39 – Introduction


1:42 – Data round-up, consumer drivers and current processes


10:17 – Interview with Nicolas Chavanne of Advent International


11:40 – Executing with conviction in the current market

15:47 – “Luxury” investments and demographics

20:09 – Deal origination and gaining an edge: Examples from
Zimmerman, Parfums de Marly

29:02 – The universe of buyers and exit option

33:44 – Consumer drivers and value creation

38:35 - The role of AI in creating an edge



41:34 – Key takeaways


If you would like to hear more podcasts produced by ION
Analytics, you can access the ION Analytics channel on Apple
Podcasts.


Theme music: 2012 Kick Up The Fire