How quickly will Avaloq list its shares now that it has an influential private equity shareholder? finews.com speaks to Dan Zilberman, the Warburg Pincus executive who has pursued the banking software maker for the last three and a half years.

Zurich-based Avaloq has a powerful new shareholder in New York-based Warburg Pincus, which snapped up a 35 percent stake in the software firm. Avaloq's public listing has come a step closer with the move, which values the firm as upwards of 1 billion Swiss francs.

The deal is the result of a three-and-a-half-year love affair – initially unrequited by Avaloq, then pursued more willingly in the last nine months, CEO and majority shareholder Francisco Fernandez said on Tuesday.

finews.com spoke to Daniel Zilberman, Warburg Pincus' head of Europe, about how quickly the private equity firm wants to exit through an initial public offering and what else is it looking at in Switzerland.

Dan Zilberman, what opportunities does Warburn Pincus see to invest in European banking?

There’s a tremendous amount of opportunity but it structurally troubled: the European banking market is overbanked, very thin margins and thus far while there’s a lot of banks who need capital, we’ve had trouble finding banks generating the sort of returns that excite us. What’s happening in Europe right now is healthy. The market is very slowly fixing itself: you’re seeing branch closures, M&A, better and higher capital regimes but Rome wasn't built in a day. I think the transformation in Europe has been more gradual than the U.S., which took decisive and painful measures and moved on. Because it’s been so gradual in Europe, the opportunities for investors like us has been very limited.

Do you see any pockets of promise anywhere in Europe?

We’ve been spending a lot of time in the banking sector in Spain, we can’t help but look in Italy, but thus far it’s been tough to find things that make a lot of sense for us. We’re looking in Northern Europe, whether its Germany or Ireland.

We’ve done more in fintech than we have in traditional banks. The old model of stoic traditional bank in today’s world doesn’t work very well. Clearly the middle-office software part is something we’re betting on very largely, you’re going to see that in other places like asset origination and fee-driven services. Necessity is going to provide more opportunities.

Anything specifically in Switzerland?

We spend a lot of time here and Jacques Aigrain (former CEO of Swiss Re) is our man in Switzerland, so our connectivity in the market is excellent, but we haven’t done a lot here. It’s a very healthy, very mature market with very large institutions. It’s also a market that would be great for us, because it’s professional, commercial and open for business. Hopefully this deal gets us more opportunities here.

Any other interesting private equity opportunities in Switzerland?

There’s tremendous technology and healthcare companies here. As a rule, the healthier and more mature the market, at times the less opportunities for people like us. 

Turning to Avaloq, would you be prepared to fund the company if the need arose?

It’s not like they need capital, but hypothetically speaking, if there was a large acquisition tomorrow, a company owned by an entrepreneur may not have the financial wherewithal to do it. We have $44 billion invested right now. I think we’re always opportunistic. If a really interesting acquisition opportunity were to arrive for Avaloq tomorrow, we would delighted to support them.

What has to happen before Avaloq is fit to IPO?

I think it’s fit today, but I don’t think now is the right time to go public. There’s a huge opportunity to go into other markets. We need to leverage their recent spending and investment and put revenue against it. In some ways, they’ve built a house but they haven’t really had anybody move in yet. Our hope is to populate the house and at that point take it public

What sort of timeline do you envision?

It’s somewhere in the next three, four or five years. There’s not really a gun to anybody’s head: if it takes longer, that’s fine. If its shorter, so be it. We’re a long-term investor. An IPO in the next three to five years from now sounds in the ballpark.

Daniel Zilberman is has been European head of Warburg Pincus since last year and with the private equity firm for the past 12 years. Based in London, he previously worked for Evercore Capital Partners and Lehman Brothers. Zilberman studied international relations at Tufts University and holds an M.B.A. in finance from The Wharton School at the University of Pennsylvania.