Investment Opportunity

StratCore is a privately held investment vehicle established to acquire established, profitable small and medium-sized enterprises (SMEs) across Europe, enhance their operations and management, and exit them within a defined timeframe for capital gains. The focus is on companies with an enterprise value of €2.5 million to €10 million — a segment largely overlooked by traditional private equity funds, which typically pursue larger transactions, yet offers a steady pipeline of opportunities driven by ownership succession, fragmented markets, and under-professionalized management.

Capital is being raised from international investors — family offices, high-net-worth individuals, and institutional allocators outside Europe — seeking direct exposure to the European small-cap buyout market without having to source, execute, and manage transactions themselves. Capital is pooled in a closed-end structure, invested into a portfolio of acquisitions, actively managed for value creation, and returned to investors through structured exits.

The objective is to acquire, hold for approximately 3–7 years, and profitably exit a diversified portfolio of companies, targeting a net return in the range of 15–25% IRR over the life of the fund. This document outlines the opportunity, strategy, target investment criteria, fund structure, and the team and processes that will be used to execute it.

Why the European small-cap segment

  • Succession gap: a significant share of European SME owners are approaching retirement with no clear successor, creating a steady, non-cyclical flow of sound businesses sold below their strategic value.
  • Fragmentation: many sectors (light manufacturing, business services, niche industrials, specialty trades) remain fragmented, offering consolidation and "buy-and-build" potential for a disciplined acquirer.
  • Under-served size range: most institutional private equity funds focus on deals above €25–50 million EV, leaving the €2.5M–€10M range primarily to local, less well-capitalized buyers — resulting in lower competition and more attractive entry multiples.
  • Operational upside: target companies are typically profitable but under-invested in systems, sales, digitalization, and professional management — areas where improvements can be made without relying on overly optimistic assumptions.
  • Currency and access advantage for foreign capital: international investors often lack the local network, language skills, and deal-sourcing relationships needed to access this segment directly; StratCore provides that access.

Why now

Bank financing for smaller acquisitions has tightened, business owners face increasing complexity (regulation, digitalization, energy costs) that makes independent ownership less attractive, and a wave of retirement-driven ownership transitions is underway across Western and Northern Europe over the next decade. Together, these factors increase the supply of attractive, reasonably priced businesses available for acquisition.

Investment Criteria

Target company profile

  • Enterprise value: €2.5 million – €10 million (initial focus; may expand over time)
  • Profitability: track record of positive, stable EBITDA (typically €0.5M–€2M)
  • Sector: opportunistic — no fixed sector mandate; preference for recurring revenue, defensible niches, low technology-obsolescence risk, and businesses not entirely dependent on a single owner-operator
  • Geography: European Union / EEA, with an initial focus on [Region/Countries — to be defined]
  • Situation: owner succession, non-core divestments from larger groups, or under-managed businesses with clear improvement potential
  • Deal type: majority or full ownership, providing control over strategy, management, and exit

What we avoid

  • Turnarounds requiring rescue financing or businesses with structurally declining end-markets
  • Heavy regulatory, environmental, or litigation overhang
  • Businesses wholly dependent on a single customer or a single irreplaceable individual with no transition plan

Strategy:

Buy — Build — Sell

Buy

We source opportunities through business brokers, M&A advisors, succession-planning networks, accountants and lawyers who advise retiring owners, and direct, proprietary outreach to owners in target sectors. Every acquisition is subject to structured commercial, financial, legal, and operational due diligence before an offer is finalized.

Build

Once acquired, we work with existing management (or install new management where needed) to professionalize the business over a typical 3–7 year hold period. Typical value-creation levers include:

  • Strengthening financial reporting, KPIs, and management processes
  • Investing in sales, marketing, and digital/e-commerce capability
  • Operational efficiency and cost discipline
  • Selective 'add-on' acquisitions to build scale within a platform
  • Broadening the customer base to reduce concentration risk
  • Upgrading or professionalizing management and governance

Sell

We exit once the business has reached a stage where its value is best realized by a buyer with greater scale, strategic fit, or lower cost of capital — typically a strategic trade buyer, a larger private equity platform, or, in some cases, the existing management team via a management buyout. We plan exits proactively as part of the initial investment thesis rather than opportunistically.

Investment Process

  • 1. Origination — proprietary and intermediated deal sourcing against defined criteria
  • 2. Screening — initial financial and strategic review, indicative valuation
  • 3. Due diligence — commercial, financial, legal, tax, and operational review, typically 6–12 weeks
  • 4. Structuring & closing — valuation, financing (equity plus, where appropriate, senior/acquisition debt), and legal completion
  • 5. Value creation — 100-day plan followed by an active 3–7 year hold, with quarterly investor reporting
  • 6. Exit — preparation, buyer process, and distribution of proceeds to investors

Fund Structure & Investment Terms

The following terms are indicative and subject to legal, tax, and regulatory advice in the fund's chosen domicile; they are presented here to give prospective investors a sense of the intended structure.

(Investment and turnover can be different. This is just a setup.)

Term

Indicative Terms

Structure

Closed-end investment fund / holding structure (jurisdiction to be confirmed)

Target fund size

[€ X – Y million]

Minimum investment

[€ / $ amount]

Investment period

3–4 years to deploy capital

Fund term

7–10 years, with possible 1–2 year extensions

Target hold per company

3–7 years

Management fee

~2% p.a. of committed capital (indicative)

Carried interest

~20% above an 8% preferred return (indicative)

GP / sponsor commitment

[X]% of fund size, alongside investors

Note: exact terms, legal wrapper, and marketing approach must be finalized with qualified legal, tax, and regulatory counsel in the jurisdictions of the manager and of the investors — raising capital from 

Illustrative Economics (Example Only — Not a Forecast)

The table illustrates, for a single hypothetical acquisition, how value could be created over a hold period. It is a simplified example for discussion purposes only and is not a projection or guarantee of actual returns.

Risk Management

  • Diversification across sector, geography, and deal vintage rather than concentration in a single company
  • Structured due diligence process with external legal, tax, and financial advisors on every deal
  • Conservative use of acquisition debt, sized to the cash-generation of each target
  • Active portfolio monitoring with monthly/quarterly management reporting and board involvement
  • Currency risk (for non-euro investors) addressed transparently in fund documentation; hedging considered where appropriate
  • Clear exit planning built into the investment thesis at acquisition, not left until the end of the hold period

Legal, Regulatory & Compliance Notes

  • Raising and managing third-party capital in the EU/EEA is regulated (e.g. under the Alternative Investment Fund Managers Directive, AIFMD/AIFMD II) — the manager will need to operate under a license, an appointed authorized AIFM, or a recognized exemption (e.g. a small/sub-threshold manager regime), depending on fund size and jurisdiction.
  • Marketing a fund to investors outside Europe, and to investors in their home countries, is subject to those countries' own securities laws — this typically requires local legal advice in each investor jurisdiction.
  • Anti-money-laundering (AML) and know-your-customer (KYC) checks will be required on all investors.
  • This document is for discussion purposes only, does not constitute an offer or solicitation to invest, and must be reviewed by qualified legal and tax counsel before any capital is raised or committed.

Next Steps

  • Finalize legal structure, domicile, and fund documentation with counsel
  • Confirm initial target geography and any sector emphasis
  • Build an initial acquisition pipeline (indicative targets, non-binding)
  • Engage anchor investors and finalize fund terms
  • First closing and first acquisition