Investment Strategies
Private Equity
Control-Oriented Investments in European Middle Markets
Nocturnal Capital Partners' private equity strategy focuses on acquiring controlling positions in established middle-market companies across the DACH region and select European markets.
We target businesses with sustainable competitive advantages, strong cash flow characteristics, and potential for operational improvement. Our approach combines permanent capital philosophy with aggressive value creation levers to transform solid businesses into exceptional investments.
Targeting Complexity and Transition Situations
We specialise in complex situations where conventional financial sponsors face analytical or structural challenges. Our sweet spot includes corporate carve-outs, family succession transitions, corporate divestitures, and operational turnarounds.
These situations typically require sophisticated structuring, patient capital, and operational expertise to unlock value — precisely the capabilities that define our investment approach and differentiate us from competitors.
Rigorous Investment Selection Criteria
Our private equity investments must meet stringent criteria across multiple dimensions: we target companies with €25-150 million enterprise value, sustainable competitive advantages in growing or stable markets, strong underlying cash flow generation, and identifiable value creation levers.
We avoid commodity businesses, those with technological obsolescence risk, and companies requiring significant capital expenditure without clear return profiles.
Active Ownership with Operational Engagement
Unlike financial engineers who rely solely on leverage and multiple expansion, we employ a hands-on operational approach to value creation.
Our dedicated portfolio operations team works alongside management to implement comprehensive transformation programs focused on commercial excellence, operational efficiency, and strategic repositioning.
This active ownership model typically drives 60-70% of our total returns, with multiple expansion contributing the remainder.
Sector-Focused Investment Approach
We concentrate our private equity activities in sectors where we possess deep domain expertise and established networks.
These include specialised industrials, business services, healthcare services, and technology-enabled services. Our sector specialisation enables more sophisticated due diligence, stronger industry relationships, and more relevant strategic guidance to portfolio companies than generalist approaches can deliver.
Structured for Alignment and Long-Term Value
Our investment structures emphasise alignment with management teams and long-term value creation rather than short-term financial engineering.
We typically employ straightforward equity structures with meaningful management participation, avoiding complex financial engineering that can create misaligned incentives. Our holding periods typically range from 4-7 years, allowing sufficient time for operational improvements and strategic initiatives to mature.
Comprehensive Exit Planning and Execution
We initiate exit planning during the investment phase and continuously evaluate multiple liquidity pathways throughout our ownership.
Our realisation process involves meticulous preparation, strategic positioning, and disciplined execution to maximise value upon exit.
We maintain flexibility in considering various exit routes including strategic sales, secondary transactions, and public market listings, always timed to optimise returns based on company development and market conditions.
