Fund Awards 2022 6 Wealth & Finance International - 2022 Fund Awards Founded in 2009, WRMGroup is an independent investment group. With offices in London, Milan, and Luxembourg, the group operates a well-established and regulated asset management programme in Europe. Focused on ‘special situations’, private equity, and real estate in particular, this group’s event-driven investment philosophy has been directed towards value creation for clients, even in times of market stress. Best Special Situations Equity - Europe Sep22173 Wealth & Finance INTL: Firstly - please give us an overview of your company, the work that you do, your clients and the services you offer. Fabrizio Boaron & David Calo: WRM Group, founded in 2009, is an independent investment group with offices in London, Milan and in Luxembourg where the group operates a well-established regulated asset management platform. WRM Group’s activity is focused in Europe on Special Situations, Private Equity and Real Estate, with an event-driven investment philosophy directed towards the creation of value in situations where companies or assets to be acquired are under financial and/or operating stress. This activity is performed by investing in private companies or in listed companies with limited liquidity. The main value catalysts are the sale of non-core divisions by large or medium-sized companies, inadequate capital structures with excessive financial leverage and situations involving familyowned companies undergoing generational transition which are increasingly aware of the importance of attracting external expertise with attentive governance and a process-oriented approach. WRM Group’s investment strategy is implemented across a broad range of industries, typically with a preference for situations where control is obtained. WRM Group’s track record to date covers Food & Beverage, Commercial and Residential Real Estate, ICT, Telecoms & Media, Financial Services, Large-Scale Retail Trade and Renewable Energy. Although the number varies with new acquisitions and exits, it is worth to remark that WRM Group in its portfolio companies has employed over 16,000 workers over the past few years. Some of the WRM Group’s entities are also regulated or supervised by the FCA (UK) and the CSSF (Luxembourg). WF: The last two years have been rather tumultuous and unexpected for the business landscape, and especially when it comes to the greater stock market. What opportunities have you capitalised on? What challenges have you overcome? FB & DC: In the pre-lockdown world, we had already a large number of motivated sellers of troubled companies, may it be multinational companies looking to refocus on core markets or family-owned businesses under increasing pressure for generational transition and with a lack of clear distinction between ownership and management. This has been compounded by changes in banking regulations, where financial institutions need quicker solutions in the management of non-performing loans to corporates. After the recent spikes in energy and commodity prices, an increased leverage on balance sheets in a rate rising environment, lack of credit lines for working capital and increased cost of raw materials have created a perfect storm for companies with already compressed margins, giving WRM Group a wider opportunity to help in the stabilization and restructuring of companies. As an investor traditionally rooted in the UK and Europe, we continue to be well-positioned to capitalise on the potential opportunities arising from the new political stance of the UK post-Brexit, and on the new synergic balance that British and European enterprises will achieve. WF: How would you describe your company values? How do you drive growth? What is your core mission? FB & DC: Since its founder, Raffaele Mincione, began activist investing on listed companies in the 2000s, WRM Group has been promoting corporate governance. ESG considerations, underpinned by a desire to have a more positive environmental and societal impact, have been largely driven by investor demand over the last few years: not just a “nice to have”, the topic presents a serious, if not existential, risk to the business models they are investing in. Incorporating ESG principles in investment and management decisions is part of core Risk Management practices, and, due to their nature, distressed situations are characterized by a low EGS scoring and are the perfect ground for firms like us to have the most impact for the amount of investment. In essence, in those types of opportunities, investors have the chance to promote high impact transformations, not just comply with a box-ticking exercise with their ESG requirements, when investing in distressed companies and assets. WRM Group is currently a member of ICGN (International Corporate Governance Network) and incorporates their ESG training in the firm’s training curriculum. WF: Can you be more specific on actions undertaken by WRM Group What are the actual steps and actions taken by WRM Group in ESG investing? FB & DC: As an activist investor, WRM Group promotes a wide range of initiatives aimed at improving governance in target companies, including: Ø Remuneration, alignment of interest and conflicts for senior management Ø Inclusion of independent board members Ø Engaging with all relevant stakeholders to unblock situations that prevent the company to function properly Ø Review of risk management practices and compliance with relevant regulations Ø Initiating an adoption for portfolio companies of Sustainability Reports WRM Group has recently signed an agreement with AXPO Group in order to accelerate a transition to production of sustainable energy, energy efficiency and electrification infrastructure. The agreement has a wider objective also to support in future companies outside of its portfolio perimeter. For WRM Group, this also represents a further tool for enhancing the value of assets in its portfolio. This is especially important in the current market environment, in which dependence from traditional energy sources contributes to operational inefficiencies and increased costs for most companies. WRM Group is aware of its impact in local communities where its employees work and live and has a continuous focus on respecting workers’ rights and an attention to social