CD&R Europe Chairman Roberto Quarta this week spoke to Peter Pfister, Private Markets Advisor, at the 2022 European Private Equity and Secondaries Investor Summit. In his keynote interview, “Differentiation in an Uncertain Market”, Mr. Quarta discussed the competitive advantages of private equity ownership, how investors should assess managers, CD&R’s purpose-built operating model, and the impact of the politically and emotionally charged nature of the past two years.

“I believe that private equity, relative to other forms of ownership like public markets, can align key stakeholders and managers more effectively through a combination of superior governance, performance incentives and management engagement,” said Mr. Quarta. As more GPs enter the market and the volatility of the macro environment continues, Mr. Quarta emphasized that it is important to select managers that can generate differentiated returns, be confident in the sustainability of those returns, and have the experience and skills in different sectors and macro climates to drive value in any economic environment.

With operating improvement increasingly recognized as a key driver of returns, CD&R’s longstanding purpose-built operating model, where operating resources are joined at the hip with deal teams across investment sourcing, diligence, and transaction structuring, differentiates the Firm from the pack. “If you were to come into an investment committee meeting at CD&R you may think you’re listening to a detailed operating review,” said Mr. Quarta. “Our operating team brings perspectives from managing a variety of businesses – quite different from a simple spreadsheet assessment of a business.”

Looking to the future, Mr. Quarta believes businesses will continue to be impacted by geopolitical uncertainty, macroeconomic change, ongoing disruption from digital technology innovation, continued shifts in customer preferences and the rising importance of ESG. However, as a source of strategic capital that provides both financing and capabilities to create value through operational improvements, he emphasized that periods of volatility have historically been attractive investment opportunities for CD&R.

Mr. Quarta has been a Partner at CD&R for 21 years and is chairman of CD&R Europe. Based in London, he played the lead operating role in the Firm’s investment in SPIE and served as chairman of the supervisory board of Rexel during CD&R’s ownership of the company from 2005 to 2014. In addition, Mr. Quarta is chairman of WPP plc and Smith & Nephew plc. Prior to CD&R, he served as CEO of BBA Group plc from 1993 to 2001, later serving as chairman from 2001 to 2006. He is also former chairman of IMI plc and has held various senior leadership positions and board positions at BTR plc, SPIE, BAE Systems plc, Foster Wheeler Corporation, Fondo Strategico Italiano, Equant NV, and PowerGen plc.