Tacticum Investments

Tacticum Investments S.A., a company headquartered in Luxembourg, specializes in merger and acquisition deals and securities trading. Currently, it is primarily owned by Arkadiy Ivanovich Mutavchi, a seasoned investor with more than 30 years of expertise in finance and economics. Over the span of a decade, Tacticum Investments has navigated through several significant developmental phases, making it a subject worthy of thorough examination.

Tacticum Investments: company history

Launch of business

Everything started in May 2014, when Long-Term Investments company decided to enter Western markets and opened its subsidiary Long-Term Investments Luxembourg S.A. in Luxembourg (S.A. stands for the French `société anonyme`). Today, this company where Mutavchi Arkadiy Ivanovich is a major shareholder, is called Tacticum Investments S.A. and is still based in Luxembourg.

Tacticum Investments

The purpose of the subsidiary incorporation was to make direct investments in European assets. Luxembourg was deliberately chosen as an expansion base. It is one of the richest European countries and its legislation ensures the most favorable conditions for financial and banking activities. Since the 1970s, Luxembourg has been one of the major European financial centers; today, there are over two hundred banks and more than a thousand investment funds operating there.

After its establishment, the Long Term Investments Luxembourg (LTIL) acquired 50% of Camfin holding that owned a significant part of Pirelli shares. In March 2015, the holding repurchased shares, but this didn't end relations with Pirelli for the future Tacticum Investments S.A. In August 2015, the Tacticum Investments predecessor partnered with the largest Chinese chemical company China National Chemical Corporation, also known as ChemChina. Thus, MarcoPolo holding was established, where LTIL got a minority interest. Using borrowings, MarcoPolo purchased 100% of Pirelli shares from the market; the deal was managed by the American JPMorgan Chase & Co.

Pirelli history and its relations with Tacticum Investments

The rubber products manufacturer, founded in 1872 by Milanese Giovanni Battista Pirelli, is now known all over the world and ranks one of the Top-5 car tires manufacturers. Originally, Pirelli didn’t plan to focus on tires at all: the company launched bicycle tires production only in 1890, while the automobile tires manufacture was launched in 1900. Pirelli manufactured diving equipment, underwater cable insulation and even fashionable clothes. And today Pirelli only means tires. The company focuses on the premium segment of the consumer market, though it also manufactures tires for trucks and public transport, as well as sports cars and bikes. Since 2011, Pirelli has been exclusive Formula 1 supplier. Another brand’s landmark feature is the world-famous Pirelli Calendar: annual photo calendar prepared by the most acclaimed photographers and for which world celebrities - from Sophia Loren to Milla Jovovich serve models. The company's facilities operate in 13 countries around the globe, and its distribution network covers almost the entire planet.

In the 2010s, Pirelli consistently disposed of non-core assets, focusing only on tire production. In 2015, Chinese investors expressed their interest to the company and decided to purchase it. The idea was to perform a large-scale restructuring of Pirelli, followed by its shares re-issue. After the delisting, the company was divided into industrial and consumer segments, and the focus was on the latter. The plan was to focus on research and manufacture of high-quality premium products.

In October 2017, a second IPO of the revamped company was held at the Milan Stock Exchange. Up to 40% of the shares were offered for sale. This was preceded by a change of ownership of the future Tacticum Investments: its parent structure Long-Term Investments was purchased by the WHPA investment group. Pirelli shares were expected to generate significant profit after the re-listing; the Italian manufacturer itself expected revenue growth of about 9% annually by the end of the decade. A major part of the revenues was supposed to be allocated for dividends payment. The future Tacticum Investments joined the new owner's investment strategy.

However, WHPA's investment expectations did not come true: Pirelli shares, which at one point grew to 7.87 euros, dropped to 4.5 euros by the second half of 2019. As a result, Long Term Investments Luxembourg (that had Pirelli share in its portfolio) got under the control of a new shareholder - Mutavchi Arkadiy Ivanovich, who owned the Tacticum Group at that time. On becoming a major shareholder of the Luxembourg company, Arkadiy Mutavchi changed its name into Tacticum Investments S.A.

The purchase was preceded by a due diligence of the acquired asset status: the future Tacticum Investments had a significant debt burden while the Pirelli shares didn't seem to be ready to show expected results. However, after the due diligence by Arkadiy Ivanovich Mutavchi, the deal was recognized expedient although risky.

It is worth mentioning that initially the new Tacticum Investments S.A. shareholder also believed in the Pirelli potential: according to Arkadiy Mutavchi, the asset was undervalued and traded below its real value. Therefore, a `rebound` to a higher price was possible, and thus the acquisition of Tacticum Investments S.A. could be profitable in the future.

However, all forecasts were ruined by the COVID-19 pandemic that began in late 2019 and had a devastating effect on the entire global economy. Its consequences affected both Pirelli and Tacticum Investments: no expected rebound occurred. As a result, in 2023, after waiting for the proper conditions, Tacticum Investments closed the position. By that time, the Arkadiy Mutavchi's company portfolio was quite well diversified and Tacticum Investments successfully continued its operations.

About Arkadiy Mutavchi

Mutavchi Arkadiy Ivanovich, the new major shareholder of Tacticum Investments, was born in 1970 in the Moldavia Soviet Socialist Republic (part of USSR). After school and military service, he made up his mind to make a career as a leader and a businessman. A manager position in the Soviet-Hungarian machine-building exporter Sidjata served a starting point for Mutavchi. Gaining primary experience, Mutavchi Arkadiy moved to live and work in the capital, where he began to actively integrate into the nascent market economy. During the following five years, the experience of the future Tacticum Investments shareholder was enriched with the following activities: import of PPE from Germany, operations for the agricultural land conversion, work as a top manager at a machine-building production facility and a large metal trading company. At the same time, Arkadiy Mutavchi was making certain efforts, which turned to be rather successful, to increase his personal capital. The future Tacticum Investments shareholder opened his first investment account in 1994. A number of successful investments over the five-year period brought Arkadiy Mutavchi a multiple increase in initially moderate-size capital.

Further Arkadiy Ivanovich Mutavchi experience shows his desire to move from the work as a hired employee to running his own business. In 1998, Mutavchi became one of the founders and CEO of a metal rolling stock trading company that he soon left having a big profit. This was followed by participation in an oil trading facility establishment, which also brought a significant profit to the future Tacticum Investments shareholder. Finally, the position of a large machine-building enterprise VP offered Mutavchi a big managerial experience. Throughout these years, the future Tacticum Investments shareholder continued his investment activities, diversifying his portfolio and increasing capital. In 2014, he got the Accredited Investor status.

At the same time, Arkadiy Mutavchi was working hard on his education. Now he has two Bachelor's Degrees – in Law (2001) and in Economics (2015), a HSE course diploma (2004), a PhD in Law (2004).

In 2015, Arkadiy Mutavchi managed to fulfill his dream of becoming a fully independent investor. Acquiring the existing Trigrad management company, Mutavchi started investing in low volatility sectors: IT, real estate, healthcare technology.

The new stage of his career was founding in 2019 of the Tacticum Group and the subsequent purchase of Tacticum Investments S.A., which made it possible for the investor to become fully international.

Tacticum Investments today

By now, the company has significantly expanded its interests dealing with direct and portfolio investments, buying and selling shares to profit from capital gains. Tacticum Investments makes a special focus on new enterprises showing a good potential. Both borrowed and own funds are used for this purpose. But Mutavchi considers his team of professionals with extensive investment experience he managed to bring to Tacticum Investments, to be the major key to success.