Daniel Grossmann (Kharis Capital): Learning the Legacy of Avant-Garde Investing
Inspired by years investing for wealthy families, we adopted an avant-garde, collaborative business model, focused on building human partnerships that rely on deeply rooted family values, sharing knowledge and taking time to contribute to a company’s development, says Daniel Grossmann, Managing Partner and Co-Founder of Kharis Capital.
What is Kharis Capital’s background?
Both my partner, Manuel Roumain, and I have invested on behalf of wealthy families. I previously worked for a prominent Belgian family behind Anheuser-Busch InBev, the world’s largest brewing company. To a certain extent, they were pioneers investing directly, not through funds, which today more commonly is an aspiration of many family offices; it’s a new age in private equity, PE 2.0. What we learned was the benefit of time, when investing in companies; the benefit of taking a long-term view and hence to become a stable partner to grow and develop businesses. Families and long-term investors are indeed not bound by typical boundaries of private equity, such as time constraints, risk diversification and investment allocation. Looking at these changing dynamics in the private equity landscape, Manuel and I decided to join forces and we launched Kharis Capital in 2015.
"We have the ‘time to be impatient’ for a longer period of time than conventional investors."
How would you describe the evolution of your business model?
We wanted to introduce an innovative model which would allow families to invest directly in companies with the same disciple as the top ties PE firm, at a time when the market was still relatively nascent: there were indeed increasing numbers of families looking to deploy capital directly. There were also an increasing number of entrepreneurs or family-owned businesses looking for a different type of partner to accompany them in the future development of their companies. We formed Kharis Capital to drive growth: we support companies in growing domestically and internationally; in their digital transformation journey and in leveraging and pushing their brand assets. We take an entrepreneurial, pragmatic approach when engaging with our companies; we actively and creatively participate in all aspects that drive our equity story, but that requires time; successfully building deploying a brand can indeed take years. We have therefore consciously chosen to allow ourselves the time to be impatient for a much longer period than conventional investors.
What is the “secret” of your model?
Aside from our passion and main “time”-asset, when you invest in a company there is the human component; throughout the life of the investment, we must indeed collaborate with a wide range of people. We refer to this collaboration with partners, founders, co-investors, suppliers and teams as a “human partnership”. It is this aspect, this human interaction and collaboration, that we nurture and cherish. It is often what makes or breaks a company. We strongly believe that people make the difference, and its often the “who” before the “how”. Another “secret” of our model is to go deep, not wide. We indeed pool all our resources behind a limited number of transactions (or platforms), to gain the benefits of closely working as a team, focusing all brainpower, manpower and energy behind a single objective. To give a specific example: we felt the European fast food market was underdeveloped compared to the US and Asia. We subsequently went from acquiring the Italian and Polish Master Franchise for Burger King, to acquiring other strong brands such as Quick, O’Tacos and Nordsee, to creating a “quick service restaurant platform” (QSRP), comprising around 1,000 fast-food restaurant locations across seven European market. This provided diversification and a natural hedge for our investors in this highly resilient sector, not only compared to investing in individual assets but in terms of food offerings, consumer habits as well as geographical exposure. Technology investing is the other strong pillar of Kharis Capital; it lies at the heart of what we do in fuelling innovation, creativity and fundamentally changing the way traditional businesses operate.