GCI: Investing in the Distressed

Private equity group GCI sees opportunity where others see failure, and its string of successes has landed it near the top of our Hot Growth list

German sewing machine maker Pfaff looked like yet another European victim of Asian competition in 2005, doomed to extinction. Slammed by low-cost Chinese rivals, mounting losses, and crushing debt, the 145-year-old company had been driven close to insolvency. That's when Munich-based private equity group GCI Management (GCIG.DE) intervened, snapping up control and quickly shifting Pfaff's low-end manufacturing to China while restructuring high-tech production in Kaiserslautern, Germany. "We invest in companies and markets where no one else sees the upside," says GCI Partner Albert Wahl.

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