Job title: Managing Partner
Investment firm: Rutland Partners (mid-market private equity)
Portfolio companies include: Armitage Pet Care, OMAR Group, Gardman Group
When is private equity an option for SMEs?At Rutland, we invest in SMEs that have good scale in their respective markets but have reached a transition point in their development that means there is a need for some form of change whether that be succession planning, operational change, financial restructuring or some combination of these factors. It is a challenging time for mid-market companies at the moment; so a fresh perspective, new capital and a transition plan can be key components to improving fortunes.
What makes Rutland Partners unique?We’re a mid-market UK private equity investor that is actively looking to invest in companies that need to “change” to develop or improve their performance. “Change” does not necessarily mean the business is distressed and can be driven by any number of factors. To us, “change” just means the company has reached a point in its evolution where it needs to adapt to better face its current operating requirements in its marketplace. Typically, we are involved in transactions where the change comes in the form of a complex carve-out from a larger corporate parent organisation, a transitioning and professionalising of a family-owned business or restructuring with new capital and succession planning. In some cases, the change for a sub-scale business has involved undertaking two transactions simultaneously, which creates a combined business that has a critical mass to be a stronger platform for the future.
What type of management teams do you work with?We work with all types of management teams across a variety of industry sectors and with a broad range of experience. We will appraise whether the management team is the right one to lead the business through the change needed but generally if the team has identified the need for change and can see the consequential business opportunity, they are probably strong enough to help deliver it.
In the main, the management teams we work with are very agile and flexible. They typically recognise that they are in a stage of their business evolution where change will help them achieve their goals.
How do you source businesses in need of your expertise?That is the key challenge! It is difficult to tell from the outside when a business is in need of attention and/or has reached a transition point in its evolution. So, we work closely with intermediaries; accounting firms, investment boutiques, investment banks and independent corporate financiers who understand our investment criteria and have an inside track on numerous businesses. In addition, we do target proprietary deal flow as well but this generally has a lower conversion rate.
What does success look like?Success for us is investing in a business, working alongside management teams to create better performance and deliver strategic change, and then ultimately exiting the business at a significantly higher value than we invested.
Our value is measured on delivering business exits at significantly greater equity values than at the time we invested.
What is the backdrop to your private equity career?I began my career as an accountant with KPMG in restructuring before joining PwC’s corporate finance team working in the UK and continental Europe. My roles in private equity investing have included head of the London integrated finance team within HBoS, founding partner of Caird Capital and most recently as a director of family office investor, Caledonia Investments. I have been fortunate to be involved in a broad range of transactions across multiple industry sectors and economic cycles which has encompassed some high-profile growth investments like Park Holidays and Vue Entertainment but also some more challenging special situations and restructurings.
What is the toughest part of your job?Managing risk! We have a duty to deliver the best returns we can on our investments for our investors, so it’s important we’re finding opportunities and developing value within the businesses we invest in. That’s the thing that you constantly think about because you want to ensure you are implementing the correct change and ultimately improving the fortunes of our portfolio businesses.
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