Profile: Magdalena Pasecka, Innova Capital
The Drawdown (TDD): You first joined Innova Capital in 2006 as fund controller. What initially attracted you to the firm?
Magdalena Pasecka (MP): I was offered my fund controller role at Innova because of my previous fund-of-funds experience. I also understood what private equity was and could speak the language. That knowledge wasn’t very common in the Polish market back then, the way it was understood in London.
I was attracted to Innova because I wanted a role with variety. I saw myself in a position where I could build something and see the value creation, while also taking part in other frequent projects, so I jumped at the opportunity.
TDD: You spent four years at MCI Capital as board member and CFO, before returning to Innova in 2014 as CFO. Why did you rejoin the firm and what had changed during your absence?
MP: Innova was initially managed by founding partners Robert Conn and Steven Buckley. At the time, there were no higher vacancies for me to step into. I moved to MCI, which allowed me to gain experience at a publicly traded company.
While I was at MCI, Innova’s managerial succession took place. That can be challenging for many GPs but ours was handled smoothly. I knew the succession created a dynamic ownership model, opening up the partnership for other people in the future and I welcomed that when I rejoined. Having grown up professionally at the firm, I knew the people who were in charge and felt we shared the same values. I believed as an experienced CFO, I could now contribute to the firm’s success.
TDD: What have been your biggest achievements so far?
MP: We’ve built our ESG process from the ground up, enabling it to evolve. Now it’s embedded into all stages of our investment approach.
Additionally, my current role enables me to take a holistic approach to the funds and our portfolio transactions, including the strategic analysis and advanced portfolio monitoring process, which we’ve developed recently. It works very well supporting our strategic goals and helped us to overcome Covid-19-related turbulences smoothly. I’ve gained a deep level of trust within Innova and our portfolio, meaning my thoughts and recommendations are taken on board.
I’ve also built a great team, which is especially important in this industry. It’s difficult to find PE talent in Poland because the country doesn’t yet have as many PE industry professionals. I’m a huge advocate for team development because I believe you can teach people skills provided they have the right motivation. When I see potential in my team, I want to support their careers. It’s a huge achievement to see former team members advancing both in and outside of Innova because we set them on the path to success.
TDD: What remains challenging in your role?
MP: Firstly, the ever changing standards around compliance, tax, AIFMD, investor requirements, fund accounting and so on. Fifteen years ago, this was far simpler. Nowadays, there are a lot more reporting and compliance issues, which creates additional burdens and workloads.
We also want to keep pace with digitalisation. We recently implemented DealCloud’s CRM system and we’re currently looking at additional tools and software we can introduce in our organisation to support our work, whether that’s automation or to create additional efficient processes.
Another challenge for Poland is promoting corporate governance, procedures and controls, so we can add value. While PE generally helps to professionalise companies, in comparison to Western Europe, a much higher number of our deals are founder succession projects and require transformation in many operational areas. This means additional work post-acquisition.
TDD: As CFO, you’re actively involved in creating new funds and fund reporting. From an operational perspective, what are the challenges of CEE-focused funds?
MP: Talent is a key issue for my team, internally. It’s difficult to find experienced professionals in Poland’s fund industry.
Second, is finding the right people for portfolio companies, whether we’re looking for CFOs or CEOs. While there are lots of talented, experienced professionals in cities like Warsaw, it’s difficult to find that calibre of talent in other parts of the country, who we feel can handle roles like running our investee firms.
From a tax perspective, Poland doesn’t have any typical PE fund structures, so we have to domicile elsewhere. While the Polish tax law changed recently, it doesn’t really promote PE investors. We’re raising awareness with the Polish tax authorities and the Polish Private Equity and Venture Capital Association (PSIK), so we are being heard on that subject.
TDD: A recent talent report highlighted it’s still harder for women to reach senior roles in PE. How much does this statement resonate with you?
MP: While Innova doesn’t have any official or specific policies, I’m an advocate for female professionals. We try to cater for women across all levels, both internally and at our portfolio companies. By the end of 2020 we had nine portfolio companies, two of which have female CEOs. This demonstrates diversity is an important issue for us.
I’ve always felt being a woman in this industry is an advantage because I can offer an alternative view, especially to a predominantly male crowd. The key thing is ensuring my voice is heard. I’ve always had strong opinions and ensured my male colleagues have listened and respected that, which meant they wanted me to have a seat at the table.
At Innova we encourage women, especially from Poland, to apply for all positions in our industry. It’s always going to be more difficult to hire women into higher ranks if they don’t feature in the lower roles – we need professionals who are familiar with the industry at all levels.
TDD: What are your key focuses for the next 12 months?
MP: Fundraising for Innova/7 is definitely a priority for 2021.
We’ll also spend time with our existing portfolio companies and add at least two more to Innova/6. This also includes finding the right partners and opportunities via M&A deals.
We also plan to further develop our ESG process. We currently have our investors such as IFC and EBRD asking about our attitude to sustainable investing because it’s important for GPs to define this. We want to set projects and annual initiatives for our portfolio to promote ESG, including topics like diversity and climate change, and use this to set deadlines and KPIs for our investee firms to measure and benchmark against.
Overall, my team knows I hate two sentences: “We’ve always done it this way” and “It’s impossible”. I firmly believe there’s always a way or a plan B we can apply to anything. We can always find a method to make something work, no matter what it is.
Magdalena started out as an analyst at Feri Gruppe. After a year, she moved to KPMG, where she held various analyst roles. After three years, she joined Innova Capital as fund controller. In 2010, Magdalena left Innova to join MCI Capital as CFO. Having gained CFO experience, she rejoined Innova in 2014 as CFO, and was promoted to partner in 2020.