"We sometimes sinned by excess of enthusiasm" - Trends-Tendances sur PC

“We sometimes sinned by excess of enthusiasm” – Trends-Tendances sur PC

The Flemish family of investors Sluys is still in its first generation. Jos, the father who created Saffelberg Investments, carefully keeps his three children away from the public scene, which he himself rarely attends. And Saffelberg isn’t doing too badly, despite some resounding failures that have put him in the spotlight and have not been easy to digest.

The title of this section suits Jos Sluys perfectly. The discretion of the founder of the investment company Saffelberg Investments is legendary. “Jos will come by later”, apologizes his traveling companion Luc Osselaer who welcomes us to the castle of Saffelberg, the fund’s home port, in Gooik. Two hours later, Jos Sluys still hadn’t shown up… And won’t. At most he will accept a later appointment with our photographer. This must no doubt be seen as the aftermath of a few unfortunate investments (Optima Bank and the fashion group FNG) and the media attention they generated. “Each time a journalist meets Jos, comments Luc Osselaer, he comes back to these files. Jos has had enough.”

The title of this section suits Jos Sluys perfectly. The discretion of the founder of the investment company Saffelberg Investments is legendary. “Jos will come by later”, apologizes his traveling companion Luc Osselaer who welcomes us to the castle of Saffelberg, the fund’s home port, in Gooik. Two hours later, Jos Sluys still hadn’t shown up… And won’t. At most he will accept a later appointment with our photographer. This must no doubt be seen as the aftermath of a few unfortunate investments (Optima Bank and the fashion group FNG) and the media attention they generated. “Each time a journalist meets Jos, comments Luc Osselaer, he comes back to these files. Jos has had enough.” Because the figures show that Saffelberg is not limited to these two missteps. Between its creation in 2008 and 2020, the year of the last balance sheet filed, equity grew from 230 to 367 million euros. According to Luc Osselaer, they even reached 390 million euros in 2021. In 14 years, Saffelberg has therefore been enriched by around 160 million euros, i.e. a growth of 70%: 120 million come from the balance of pluses and minuses -values ​​on the sale of participations, the rest of the income from bonds and other securities. Since its creation, Saffelberg has thus recorded an internal rate of return (IRR) – a criterion which takes into account the income from the amounts invested but also the time necessary to obtain this return – of 4 to 5% per year. “At first sight, this seems modest, but we are talking here about a long period of zero interest rates, explains Luc Osselaer. Over time, such a stable IRR on a large capital generates appreciable results. But we are now going to start a complicated chapter in our history. Inflation will reach 10%. Where to find investments that yield 10% per year, with a coming crisis? We recently sent a message to the companies in our portfolio. Its title: Winter is coming .” Fortunately, Saffelberg doesn’t have a horde of backers to satisfy. The fund has only one shareholder: the Sluys family. And the father Jos Sluys was not born yesterday. This son of a peasant from Pajottenland combined civil engineering studies at the VUB with training at the Vlerick Business School where he met Luc Osselaer. His first job: buyer of fish and vegetables for the brand of frozen products Iglo-Ola, a subsidiary of Unilever. “Since then, Jos has been unbeatable on shrimps… and on the art of negotiation”, smiles Luc Osselaer. A few years later, Jos Sluys moved to SAP, a German software manufacturer specializing in the digitization of business processes. “It was the 1990s, SAP was expanding. Jos was entrusted with the personnel management software. SAP did not yet have customers for this module and Jos smelled the opportunity. In 1994, he created Argus Integrated Solutions – abbreviated Arinso – to install the SAP module in companies. The timing was perfect. Arinso’s turnover soared.” Arinso goes public in 2000. With 60% of the shares, Sluys remains the majority shareholder, but not for long. In 2007, Arinso was bought by its British competitor Northgate for 375 million euros. “At the time, Arinso had 2,500 employees worldwide and achieved a turnover of more than 250 million euros”, explains Luc Osselaer. Sluys was paid partly in cash, partly in Northgate stock. “Suddenly, Jos finds himself sitting on the board of directors of the British company, which is also listed on the London Stock Exchange.” But it did not last. At the start of 2008, the American investment fund KKR bought back all of the Northgate shares. Shortly after, Sluys founded Saffelberg Investments with the recovered funds. “We couldn’t have asked for better timing. When Arinso went public in 2000, valuations were at their highest. The ‘dotcom’ bubble would burst soon after. Same in 2008. had lasted a few more months, they probably would never have come to fruition because the financial crisis was about to break in. It was gathering momentum when Saffelberg started operations. arrives on the market with 230 million euros in cash: we immediately stood out. We have to be honest: we were extremely lucky at crucial moments.” One of Saffelberg’s first investments was land near Las Vegas. “For a long time, we did not touch it. Today, we are developing residential real estate there”, explains Luc Osselaer. Land has become an important pillar of the portfolio. At the end of 2021, building land and real estate development accounted for a third of the portfolio. Another example is BGR, the Belgian Land Reserve which, according to the Saffelberg site, owns 2,000 building plots. “You can call BGR a savings bank for building land, especially in Flemish Brabant and around Brussels”, explains Luc Osselaer. In the portfolio, there is also the property developer Evillas and some foreign real estate projects. In addition, 18% of the portfolio is invested in cash or liquid securities such as bonds and shares listed on the stock exchange. “In total, we thus arrive at half of defensive investments”, notes Luc Osselaer. The rest of the portfolio is invested in venture capital. Convertible loans to companies represent 24% of the portfolio. Stakes in companies and investments in other investment funds (such as SmartFin Capital by fintech investor Jurgen Ingels) weigh 15% of the portfolio. Among these holdings is Medec, a manufacturer of breathing apparatus based in Aalst. After a bankruptcy, Medec experienced a very dynamic recovery under Saffelberg thanks to the covid pandemic. In the list, we also note the Ostend waste recycling company Renasci, co-founded with Luc Desender. At the time, Saffelberg had already invested in Electrawinds, Desender’s green electricity company whose bankruptcy caused a stir in 2014. But at Saffelberg, we have not the slightest reproach to address to Desender. “Luc had a lot of bad luck. We wish him all the success he deserves with Renasci”, tempers Luc Osselaer. The final part of the portfolio (7%) is invested in starters and growth companies such as Leuven-based Brikl, a cloud platform that hosts “microstores” of companies and organizations, for example for sales of club shirts sportsmen. Saffelberg has also invested in the Mechelen football club. “This relationship is going very well,” explains Luc Osselaer. On the other hand, the point of no return was reached with Dieter Penninckx, another important shareholder of the club. With a few partners, Dieter Penninckx had developed with great arrogance the FNG group, which went bankrupt this year. “Penninckx overloaded the boat too much and it capsized, comment Luc Osselaer. We don’t know the real origin of FNG’s problems either. The investigation will have to determine it.” These failures matured Saffelberg as an investor. “We sometimes sinned by excess of enthusiasm. We happened to engage with entrepreneurs after a single meeting, recalls Luc Osselaer. This thirst for adventure has earned us some great successes – think of Ectosense, spin-off from Imec specializing in the diagnosis of sleep apnea sold last year with a spectacular capital gain – but also some fiascos, so we decided that Saffelberg should become a little more boring.” Luc Osselaer, recently promoted to managing director, has set up a formal investment committee which will now take decisions after the necessary screening of files. This committee notably includes CFO Marleen Vercammen and lawyer Arnold Benoot. Saffelberg is also making greater use of external specialists. Decisions are preferably taken unanimously, if not by majority, including if Jos Sluys finds himself in the minority. And what happens if Jos Sluys punches the table? “It’s his full right. It’s his money. But that won’t change the decision.” Jos Sluys will be 60 in 2023. Luc Osselaer is one year younger. “Rest easy, we are not going to organize a general liquidation and then close the door behind us, smiles the latter. At the top of Belgian venture capital, you have the big ones like Waterland and Gimv. At the bottom of the pyramid, we find countless family offices, the investment vehicles of large Flemish families. As a medium-sized player, Saffelberg positions itself between the two and will remain there.” Even if fresh blood will be called to the stand. “We have a time horizon of a few years, continues Luc Osselaer. Jos absolutely wants to prevent his children from being thrown into the deep end too soon. In addition, we advocate meritocracy. “a proven academic and professional background. Jos’ son is an engineer and works for a world-class venture capital player. Jos’ daughters have just finished their studies, respectively as a commercial engineer and a biological engineer. We will see at the right time if the new generation can take over the helm. If not, we will look outside. Until then, I will take over.”

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