The Big 3

1. What was the toughest decision your firm has had to make in the last 12 months?

We are fortunate to have had a very strong 2008 across all of our current portfolio companies with revenue and EBITDA growth both at around 25% for the portfolio as whole. This is primarily a function of having carefully selected investments in high growth, niche markets where socio-economic trends or industry structure changes are more prominent factors than general economic activity. Indeed, the strong performance has continued through the first quarter of 2009, albeit at a lesser pace than last year, due to the overall slowdown.

Yet, as the portfolio is performing against the grain, it has been difficult to break through the noise of the market and communicate these results to an appropriately cautious and somewhat sceptical investor community, that expects only bad news. We are increasing the level of detailed information we provide on each company to ensure the market can understand exactly why this portfolio is outperforming while so many have fallen significantly behind.

2. What do you see as the biggest challenge this year, and how do you see the industry overcoming it?

While we are fortunate to have always had a flexible investment model that does not rely exclusively on leverage, the fact is that the de-leveraging that the world is going through is having, and will continue to have, a significant impact across the board. The banks and non-traditional funders upon whom the industry has relied so heavily for financing are currently being forced to go through a fundamental restructuring of their business models. For this year, it means our industry must be prepared for significant unpredictability in the decisions being made at the banks as their executives figure out the new model. A decision made on one day may be reversed the next; a decision approved on one deal may be followed by a turn-down on a wholly similar situation sometime later, and vice-versa.

Over the longer term, we must prepare our own business models for a much narrower set of funding alternatives as the extremely fluid and flexible funding options that we've come to expect in the last few years will be significantly curtailed.

3. What would you say are three most important qualities for a PE professional in the current market?

For veterans of the "old school" of private equity investing, they are the same today as they have always been: 1) strong analytical ability to see what strategies will truly be effective for a particular transaction or portfolio company; 2) strong interpersonal skills to connect with company executives, empathise with their issues and influence their decision making; and, 3) level-headed patience and enough maturity to recognise that there is nothing permanent in life, except change.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• LPs
• UK / Ireland