Peter Dubens – the money machine

Peter Dubens’ interview continues from page two.

These warning signs help Peter Dubens today. “There were so many times, early on, when I’d been close to the wire; I was overtrading, knowing that feeling of potential disaster. I now know what to look out for.”

Peter Dubens’ second trick is to work with smart, balance-sheet driven people. “Sure, I come up with the ideas, but one of the knacks is surrounding yourself with operational managers or support people who are incredibly bright,” he explains.

Checklist

From the get-go, Peter Dubens has had a strict checklist to follow, from working out what other businesses he could buy to strengthen the model, to planning an exit for the business.

“At the beginning, before we’ve bought it, we look at whether this is a sector where there’s a natural buyer. We want to know that once we’ve put together a plan, if all the stars are aligned, there are potential buyers.”

Sure, this is part of the standard due diligence that most investors conduct, but the level of detail and research that Peter Dubens demands is much higher than the norm.

“We run through a very thorough process before we buy a business,” Peter Dubens admits. “But it’s no good buying a firm that needs turning around if we don’t believe that it’s got a future.”

Peter Dubens uses the example of Blockbuster: “In the next ten or 20 years, people will either be downloading or streaming films over a very fat pipe through a data centre. So would I want to be in the online DVD retailing business? No.”

What are the future growth industries, then? While Peter Dubens refuses to be pigeon-holed – describing himself as a “generalist” – he says he loves businesses that are associated with the internet. “I don’t touch high-street retail,” he adds. “Merchanting is a skill that we just don’t have. We also don’t get involved with high-end technology, as it’s a very particular skill. And we shy away – especially in the UK – from heavy industrial CAPEX-driven industries.”

Continue reading Peter Dubens’ interview on page four.

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