Don’t suffer unnecessary dilution, maximise your return with our unique approach to buy-build M&A which always leaves management in controlREGISTER INTEREST
For decades private equity have been able to portray that by providing the opportunity, liquidity and connectivity; the value left for sharing with management can only be modest. Typically just 10-20% is shared between all of senior leadership and that range is often further eroded when priorities, interest & charges are applied. With connectivity often over-sold, liquidity often overpriced (loan notes at 12%) and the entry-price set by the sponsor, the “value-add” by traditional sponsors can sometimes be underwhelming – leaving management to be the forcing factor in success.
Many fund strategies are built years before any funds are deployed. The fund therefore prospects for new deals based on parameters which could have been defined many years previous. Once a fund finds deals, they then devise a strategy that best enables return of a quantum required to placate investing LPs. They then look to back-fill that deal with management optimally placed able to deliver the strategy chosen by the fund. With management the single most likely factor to influence success it seems counter-intuitive that they would be the last party to any opportunity.
92% of funds are closed-end funds – these funds have a fixed period to deploy and return fund investors their money. Forcing growth and enhanced performance in a discrete period of time requires often very fundamental changes to invested businesses. Those demands become inflated further as the price paid for assets increases.
In a 2019 study, private equity firms were found to have changed their CEO & CFO no fewer than 78% of the time before exit. Is that more likely a result of underperformance or unfair expectations? When management carry all of the risk is it right that they also share in such a narrow portion of the rewards?
With no credible alternative available to management and a constant clamour of emerging talent seeking the equity participation and perceived CV-enhancement of joining the private equity community, management have little option but to accept the status quo and perform to maintain favour with sponsors.
With no credible alternative threatening private equity, there is no incentive to change. Whilst the market is ever-more saturated with new funds, the fact they all operate with management in broadly the same fashion ensures the industry can continue to maintain a one-sided position which leaves management an unprotected and under-rewarded commodity.
A hybrid investor-advisor, we are experts in MBI, MBO & buy-build group transactions. Sector agnostic and typically transacting anywhere between £1m and £50m Enterprise Value, our entire approach starts with first identifying the industry leading talent we wish to help.
End-to-end we then provide the financing, expertise, team and network to de-risk the next chapter in your career.register interest
“Independence have proven to be a great partner for our business and we really value their expertise. They have not only worked hard to learn about our business and support our needs, they have shared guidance on strategies which have collectively brought great value to the company, family and the team remaining within the business.”
By Richard Skelson – scaled family business 10x
“Independence were really helpful in supporting my first acquisition in the UK. In a new country and market, they helped me to successfully navigate a challenging vendor and their advisor and I am really pleased with how the acquisition has subsequently performed. I intend to work with them again in the future as the group looks for M&A buy-side support as part of its growth plans”
By Craig Schweitzer – ex Xerox MD
“After exiting Verastar, I spent a lot of time talking to the market to find partners able to help on my next project. Independence were the only party I spoke to where there was very clear alignment of expertise, interest and risk. In the short time we have been working together they have made great progress originating and structuring off-market opportunities and I look forward to counting on their support as we build the group over the years ahead”
By Alex Heslip – exited for >£400m
“Having scaled and exited with private equity before, we knew that building our own group without traditional private equity was our aim. Independence have a unique proposition built exactly for our purpose and have been exceptional partners in helping us deliver on that dream. We have made great progress in a short space of time and wouldn’t hesitate to recommend Independence to other teams and leaders in our position”
By Mark Allen – exited for >£200m
“Having worked with traditional private equity, I could easily relate to Independences differentiated offering. I have been extremely impressed by the quality and volume of off-market targets delivered and the depth of support available in structuring, and strategy. Building a global group isn’t straightforward but Independence have fast become integral partners and I will recommend them to other teams and leaders”
By Nic Kyrzakos – exited for Carlyle Group
“Independence helped give me the confidence to build my own group and have been exceptionally supportive throughout a tumultuous past 3 years, I wouldn’t hesitate to recommend them to other leaders and management teams.“
By Ian Howell – ex Barclay Brothers MD
“I have enjoyed working with Independence and welcomed their support in helping to navigate some complex situations, good and bad. I would recommend them to other leaders looking to build their own group.”
By Simon Wellings – exited for >£1bn
“Having sold our family business to a blue chip company, we have experience of growing and running companies at both ends of the spectrum. When we started the Titan Packaging Group, what we didn’t have experience of was M&A outside of our own deal. Independence have been really helpful and insightful, in working with us to explore what is possible in the market and we continue to value their support in helping us to build our group over the coming years”
By Jason Inwood – exited to Bunzl
“Having worked with global blue-chips and mid-market private equity all my career, a lot of what we are doing with Independence I didn’t think was possible. They have proven to be a fantastic alternative and I really value their support.“
By Phil McClennon – ex Global Strategy Thyssenkrupp