Posts Tagged ‘private equity’

Lifting The Cloak Of Private Equity Secrecy

Monday, June 26th, 2017

 

 

How do you tell whether a private equity investor is “absolutely credible”? Realised investments, success stories, lists of co-investors, testimonials, references etc. are all valuable but can I actually see their intellectual property? I am referring to the availability of tangible communications (articles, presentations, models, audio, video etc.) encapsulating the investor’s best ideas, experiences, education, managing cultural change etc. – their intellectual capital – synthesised or recombined  into value for the would-be seller or top management. In almost all cases, the answer is a resounding “no”. You are asked to take it on trust.

I asked a serial CEO, and now Board Chair and Senior Adviser to many of the world’s largest private equity firms, how the secrecy helps the private equity investor? He was largely at a loss to explain it apart from avoidance of past PR bloody noses.

Would you allow a surgeon to operate on your heart or the school to teach your child without a pretty clear understanding of how they think and operate, beyond the odd PowerPoint presentation or a few lunches? The time has come for more humility from private equity investors of all shades. That doesn’t require them to diminish their own worth rather to accept that greater transparency upfront is an accelerant to higher levels of trust with their key constituents and superior short and long-term performance.

© James Berkeley 2017.

In The Eye of A Private Investor

Monday, June 5th, 2017

 

You are a C-suite executive or senior manager (probably with a successful career in a mid and large organisation) flirting with future advisory roles (Operating Partners, Senior Advisers and so forth) with private investors (Family Offices, Ultra High Net Worth individuals and some funds) and their portfolio companies. I meet half a dozen a month. Are you looking through your lens or that of the investor’s? When I ask bluntly, “why would a private investor be interested in you?”, most default to regaling their past (skills, expertise, accomplishments) or they way they like to work (imparting advice, influence, guidance). Here is the tough news, most private investors really don’t care. They want to know about

  • the “transformative value” (TV) for the investor after the Adviser has applied their past to the future of their investee businesses (logical reasoning – increased revenues, stronger brand, faster growth etc.)
  • the speed and quality of the “validation” (V) for the investor’s own reasons to back or not, a specific business (emotional reasoning – “am I going to look good”, enhanced credibility, mitigate personal risks, obtain future opportunities or relationships with peers, other investors, investee businesses etc.).

TV * V = Private Investor’s return on investment or “Great Deal”

“What”, “where”, “when” do you score highest as a potential Senior Adviser? Why? How do you get to those private investors with the highest need for that value?

Keep that equation and those critical questions uppermost in mind BEFORE you walk into your first meeting with a private investor.

© James Berkeley 2017

The Uncomfortable PE Investor

Friday, May 19th, 2017

Whoever taught a young investor how to create great relationships? The thought dawned on me leaving a meeting with two forty-something European mid-market private equity investors. One was open, welcoming, used self-disclosure and possessed a mindset that actively encouraged reciprocal exchange of ideas, names and insights. The other, hid behind a corporate ethos of privacy, rarely showed interest in reciprocity and maintained a mindset that he knew everyone worth knowing. The former is a top performing fund manager running a $500M fund with over 6 closed deals in the public domain this past 18 months, the latter recently closed his first $200M fund with zero visible public success. If you were a limited partner or an entrepreneur, wouldn’t you have expected the exact opposite traits given the track record and profile?

Private equity is first and foremost a relationship business. Relationships based on trust and value. Developed by creating a seductive rapport (personal chemistry, powerful intellect, effective use of language) with entrepreneurs, limited partners and advisers. Manifest by converting that seductive rapport into deals closed, value created and profitable exits that create a “win-win” situation for the firm’s key constituents. Yet it seems a great many leaders in European private equity firms are totally complacent about their fund managers’ relationship building skills and behaviours, believing that financial acumen and capital alone will lure outstanding entrepreneurs with outstanding businesses. That is crap but hey, they’ll wait for 10 years to find the errors of their ways. In which time, the Fund Manager will have collected his monthly check, been promoted twice and sit smugly admiring his or her personal bank statement.

© James Berkeley 2017. All Rights Reserved.

 

Exclusive Invite: Private Equity International’s Operating Partners Forum

Thursday, April 13th, 2017

Intrigued by what a private equity operating partner does, the value they create and the critical issues (digital, strategic, operational) in European private equity now and the next 12 months? Here is an exclusive invitation.

I am back for a third year moderating a panel session (3/4 May, 2017 IOD London) with a great cast that includes a former CEO of one of Europe’s top-ranked private equity firms, a Cambridge-educated Austrian doing great work in infrastructure investing and an Italian transforming the fortunes of a German Family Office. If you have an iota of interest in value creation, join me at Europe’s pre-eminent event featuring 70+ operating partners and 30+ limited partners in intimate surroundings.

http://www.cvent.com/events/operating-partners-forum-europe-2017/event-summary-c2532f5d6ccc4666acd807e72568cbf0.aspx

Here is a deal, sign up using this code and receive a 15% discount off the registration fee (OPspeaker17) PLUS for the first six subscribers I am buying breakfast on Day 2. There are currently 4 seats remaining.

There is no other such gathering for the remainder of the year. If you are unable to make it but interested in receiving a quick “free” checklist of the key takeaways, drop me a note to james@elliceconsulting.com. I’ll make sure that you are on the distribution list.

© James Berkeley 2017. All Rights Reserved.

Interview With Me: Forbes

Wednesday, February 8th, 2017

Forbes contributor and former Reuters reporter, Ralph Jennings, interviewed James on the discrete “welcome mat” likely to be laid out by the Trump presidency for ultra high net worth Chinese entrepreneurs directly investing into the United States. Politics aside, expect pragmatism to prevail.

Why Trump Will Let China’s Smart Elite Invest In The U.S. 

http://www.forbes.com/sites/ralphjennings/2017/02/07/trump-is-open-to-investment-from-chinas-smart-elite/#4a7d1a135fcb

Interview with Me: Financial Times

Tuesday, September 27th, 2016

The Financial Times Wealth Correspondent, Hugo Greenhalgh, sat down with James to discuss the impact of wealth creation, investment and the stark changes occurring in parts of London’s fabric since he first arrived in 1986.

Dickens’ “Greatest Thoroughfare in London” Subsumed By Coffee Chains

https://www.ft.com/content/328a7ccc-7bfa-11e6-b837-eb4b4333ee43

Interview With Me: Do’s and Don’ts of Investing in Private Comanies

Tuesday, September 27th, 2016

In an interview for U.S. News & World Report with the former longtime staff writer, editor and columnist at the Chicago Tribune, Lou Carlozo, James talks about why many investors in private companies jump on the bandwagon of out-sized returns while overlooking the inherent risks.

http://money.usnews.com/investing/articles/2016-09-20/dos-and-donts-of-investing-in-private-companies 

 

 

PE’s Hidden Value At The Dogs

Tuesday, June 7th, 2016

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How many times have you made an advance booking for an event ticket, a restaurant reservation or a hotel room only to arrive on the day to find your name is “not in the system”? How many times have the front line staff sought to caste blame on you or others rather than take immediate steps to resolve the problem and display empathy? How many times have you been turned away when you were eagerly looking forward to that experience vowing never to return in future? How many times has it been a major pain in the backside to ensure the charges have been reversed seamlessly to your credit card?

On Saturday night, I found an outstanding customer experience in the most unlikely of settings, Wimbledon greyhound track, host of the Greyhound Derby and owned by private equity firm, Risk Capital Partners. Arriving to find my family “not in the system” or in Wimbledon’s case, “not on the list”, two enthusiastic front line staff (Anita and Sonny) stepped in to help with simple proactive suggestions.

Sonny and Anita: “Pay cash for alternative tickets, we’ll run to our booking office and return with a receipt, personally email our central reservations with full instructions asking them to rapidly resolve the problem. In addition, we will follow up in their opening hours to ensure a rapid reversing of charges and you won’t need to do a thing. Is that OK? Is there anything else we can do to ensure that you have a fabulous night?

Me: “No. That would be wonderful if you can accomplish that.”

I am called this morning by their Central Reservations to be told that the problem was human error (incorrectly spelling our name) and all charges are being immediately reversed.

Applying common sense, taking ownership, displaying empathy and disciplined follow up are all very simple human tasks. Yet what Sonny and Anita displayed is so rare in my experience today.

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Even more so, if I told you that they are working in a business, whose private equity owners want to shutter the business and is in the midst of a political fire storm.

None of us want to swap jobs with their predicament. Indeed, I would go as far to suggest that their responsiveness to my problem had little or nothing to do with their circumstances. They are two enthusiastic, proactive and hard working employees, who have the skills and volition to do the right thing at the right time. To use their eyes and not rely on redundant operating policies and procedures.

Many seemingly successful companies get in the way of their employees displaying their talents. It destroys customer goodwill, which in turn harms loyalty, repeat business and value creation.  When you see a business fighting for survival but with a bedrock of enthusiastic employees displaying great customer service perhaps there is value where the existing owners don’t see it?

If you are a Sponsor with a penchant for a turnaround, you could no worse than organise a night out at Wimbledon dogs. Is that helpful Mr Moulton?

© James Berkeley 2016. All Rights Reserved.

 

The Value Creating Agenda In European Private Equity

Monday, April 25th, 2016

OPF_190416_202LOW RES

 

150 of the leading minds in the sector assembled at Private Equity International’s Operating Partner Forum 2016: Europe. Here is an exclusive snapshot of 5 key takeaways from a list of 20 priorities shaping the future:

  • Impact trumping brand. What an Operating Partners does in future is more important than the size or diversity of the PE firm.
  • Little guys on the rise. Substantial “growth” opportunity in the next 12 months for small and boutique consultants and advisors. Tightly customised products and services, absolute credibility (IP), the ability to build a seductive rapport and convert it into increased market share .
  • 6 core value creation themes in 2016 (all businesses). 1. Structural transformation, 2. Operational improvement (often seen as unfashionable but where a lot of hidden value resides), 3. Buy and build platforms, 4. Emerging market growth, 5. Strategic repositioning and 6. Growth acceleration.
  • The Atlantic Divide. Limited Partners (LPs) report increasing geographic distinction between US and European PE  buyouts. In the US, a great frequency  of institutional buyouts (“IBO”), manifest in telling managers “we own your business, you will follow our approach”, consequently, management are more subservient. In Europe, a greater frequency of working with management and a greater propensity for peer-level relationships. Skills, behaviours and expertise needed differ, particularly communication.
  • The Digital PE Value Creation Wheel. Outstanding PE firms are embedding in their portfolio company due diligence 1. Product (capability), 2. Price (transparency), 3. Channel distribution (eCommerce), 4. Marketing (how they do it), 5. Operations (managing the business), 6. People (awareness, skills, behaviour)

Want the other 15 priorities, write to James@elliceconsulting.com  for a free copy of the full listing.

© James Berkeley. All Rights Reserved.

Speaking at Private Equity International’s 2016 Operating Partners Forum: Europe

Tuesday, March 1st, 2016

I am excited to be asked to moderate a panel session titled, “Constructing a Long-Term Game Plan for Operating Partners” at next month’s pre-eminent European private equity event.

If you want to meet, network and leave with powerful industry insights to guide your future, you should really consider Private Equity International’s Operating Partners Forum: Europe. The event runs from Tuesday, 19th to Wednesday. 20th April, 2016. It is held at the Institute of Directors in London.

While there is an obvious appeal to those immersed in the sector, I have observed that there is huge value to be gained for top management in corporate organisations highly curious about a closer personal or professional relationship with General Partners in private equity firms, Limited Partners, Operating Partners and Consultants. Specifically, those people who are confident that their personal skills, behavioural traits and expertise could deliver impressive value and results to attendees, today (buyout, minority investor, expertise etc) or at a future date in their career (NED, Operating Partner etc)

Registration help: please contact William Russell at PEI william.r@peimedia.com , mention my name.

I’ll be hosting a breakfast on Tuesday, 19th for the first 5 attendees who would like to join me in close proximity to the event. Please email if you are interested in joining me james@elliceconsulting.com Details to follow.

If you would like to meet in person at the event, please email or call me at +44 203 440 5072.

For those unable to attend, I will be circulating a 1-2 page snapshot of key learning points. If you would appreciate reading this, email me to be added to the circulation list.

 

Here is today’s press release:

Berkeley to Discuss Constructing a Long-Term Game Plan for Operating Partners  

London, England— 1st March, 2016

James Berkeley, Managing Director of ELLICE CONSULTING LIMITED will be moderating a panel discussion on the role, credibility and the future of Operating Partners in the value creation process. The panel session is scheduled for Tuesday, 19th April, 2016 and will be held at the Institute of Directors in London. Private Equity International’s annual Operating Partners Forum has become the premier event for anyone involved with value creation in the European private equity community.

“The contribution of Operating Partners in creating value has never been higher, yet the views about their worth has never been more polarised”, notes Berkeley, an expert in the profitable growth and expansion of private equity-backed portfolio companies. “The future for Operating Partners is about “FAST”. Formidable skills, expertise and behavioural traits. Absolute credibility with key constituents. Seductive rapport with top managers and sponsors. Tremendous return on investment. The good news, it has never been easier for Operating Partners to stand out from the crowd so long as they possess the requisite competencies and passion.”

Berkeley notes, “A long-term game plan presumes that all parties have absolute clarity about the objectives and they are quickly able to decipher the shortest route to that destination. It is no longer acceptable for top management to spend 6 months formulating strategy when it can be done in 6 hours. Hence the real value of an Operating Partner is increasingly as a catalyst for speed not just the quality of decision-making, at the portfolio company level. That places a huge emphasis on an Operating Partner’s behavioural skills in both the formulation and implementation stages of a growth strategy.”

James Berkeley helps Sponsors and top management seeking dramatic growth opportunities. He has worked extensively with private equity firms and portfolio company managers globally to achieve unprecedented top line growth, market-leading margin expansion and impressive value creation through his distinctive approaches to marketing, leveraging relationships, branding and pricing.

Whether it is consulting Sponsors and top management on profitable growth issues, critiquing value creation plans, changing pricing strategies or an enhanced focused on talent in high-performing organisations, he is known for his Profitable Growth Regime.

James’s counsel has been sort by senior executives at an array of private equity-owned businesses such as Hilton Worldwide, ASIMCO Technologies, Caesars Entertainment, CKE Restaurants and over 40 other market-leading organisations around the world.

For additional information, contact:

James Berkeley, Managing Director

Name of Company: Ellice Consulting Ltd

Phone: +44 (0)2034405072

Web Site: www.elliceconsulting.com

E-Mail: james@elliceconsulting.com

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