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Loyalty Partner

Loyalty Partner

September 2005

March 2011

3.0x / 22% IRR

Financial services

Munich, Germany


Loyalty programme operator

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Business at time of investment

The Group was founded by Chief Executive Officer Alexander Rittweger, Lufthansa Commercial Holdings and Roland Berger in 1998. It operated the largest multi-partner loyalty programme in Germany with over 28 million PAYBACK cards in circulation and employed approximately 260 staff.

Investment rationale

Set against a stable backdrop of steadily increasing consumer spending behaviour in Germany, Palamon identified that Loyalty Partner, which had a highly scalable and profitable model, had three opportunities for accelerated growth:

  • Loyalty Partner owned one of the single largest consumer behaviour databases in Europe that was under-utilised but of great potential value in providing unique, below the line marketing services to existing retail partners
  • Opportunity to expand its offering to its committed base of active card holders by developing a payments service as well as a possible credit card
  • Expansion of its partner programme, both domestically and internationally

Value creation

Worked with senior management to design and implement a number of strategic initiatives which more than doubled revenue and profitability

  • Created data analytics marketing capability: Acquired a majority stake in emnos, a leading UK-based data analytics company, and extended it into Germany, Spain and France.  Used expertise to develop unique below-the-line marketing services to retailers.
  • Developed financial services product: Launched card payment capability backed by WestLB payment transaction infrastructure, transforming loyalty cards into payment cards.
  • Internationalised the business: Extending loyalty card operations into Poland and India
  • Expanded partner programme: Launched white label loyalty card operations for Deutsche Bahn, Germany’s railroad operator. Expanded the loyalty system to on-line, acquiring over 250 on-line retail partners and launching a transactional website,

Company at exit

Loyalty Partner had 34 million PAYBACK cards in circulation and was Germany’s third most carried card, through which €15 billion of sales per year were processed. The company had doubled revenue and profits during the hold period and increased employee numbers to nearly 600 staff.


On 1 March 2011 Palamon sold its shareholding in Loyalty Partner to AMEX in a transaction valued at approximately €500 million. The transaction generated a 3.0x return on invested capital and 22% IRR.

Loyalty Partner