Throughout the two and a half years since we commenced we have faced a lot of questions. In this article we try and cover the main questions candidates, sellers, advisors and investors have and hopefully help you build the confidence in Independence that some of the country’s leading management teams also have.
Are you a Corporate Financier or an Investor?
We are a hybrid. In most of our transactions we operate as both, in the minority of our transactions we act as advisor-only. We occupy a unique position in the market – serving clients who require advisory support across a broad spectrum of services over many years along with sharing risk and providing uniquely structured investment aimed to reward management first.
Do you have your own funds?
We have both our own funds and the backing of high-net-worths and institutional monies from an array of sources. The span of our sources of monies are a unique advantage that allows us to shape with more flexibility than most traditional investors around both the specific needs of our teams & leaders and the transaction in question.
What is the state of the market?
The market is really buoyant but the manner in which we operate means that the state of the market is not really consequential. We hold a novel position where we prospect using innovative data and networks with owner-managed companies who are off-market. By transacting off-market we allow buyer and seller the time to correctly appraise each other. This extended investment of time without the pressure of a process is pivotal to both sides making a measured, balanced and informed judgement.
What transactions do you support?
We only focus on two types of deal; we support teams & leaders who want to buy businesses to build their own group or we support teams & leaders who wish to buy the business in which they already work. By focusing on a very narrow and focused field it allows us to be genuine experts in the idiosyncrasies that come with those deals and sets us aside from our traditional peers who do 20 different types of deal for 20 different types of customer. We do that for the same reason we back sector leading teams, because expertise and experience matters.
What teams and leaders do you support?
We get interest and referrals from teams & leaders frequently. Through a combination of our own resources (mainly time) and our will to support only the very best teams, we are exceptionally selective about who we work with – focusing not just experience and expertise but the extent to which as individuals we can all work and socialise together. Investments and long-term projects are both time-intensive and high-stress environments; building comfort, trust and respect are really important and we simply won’t support any teams or leaders where we feel there is prospect for misalignment in the future.
Do you do transactions outside of the UK?
We will support teams & leaders outside of the UK where they are looking to buy in the UK. We will only by exception support UK teams buying overseas assets. We won’t support overseas teams buying overseas assets – albeit we expect that overseas branches will become a feature of our growth plan as the market conditions we observe in the UK are also prevalent globally.
Do you have experience of public-to-private?
We have minimal experience of public-to-private (“P2P”), mainly because we tend to prefer the easier buy-side process of transacting with privately owned companies and engaging direct with owner-managers. We do have P2P and listing experience however and would draw on our network for additional support in the instance a listed team wanted to take private or a private buyer/team/client wished to acquire a listed target.
Do you work/syndicate/club with other funds?
To date we have not run any syndicated or club strategies but we would certainly not preclude ourselves from doing so in the future so long as the team, opportunity and potential syndicating parties were all aligned.
What is your typical cost & deal structure?
We have no standard structure, it absolutely depends on what the aspirational strategy of the management team or leader we are supporting – depending on how that desired outcome looks we will change the mechanics of our fee/equity structure to ensure management always maximise reward/control and we evidence shared risk throughout.
How can a new candidate build confidence in Independence?
Spend time with us, we invest in the process as readily as we do our favoured candidates. We also recommend that you speak to our past clients/vendors/advisors/partners and get a feel for who we are and how we operate both during success and adversity.
Why don’t traditional private equity or corporate finance do what you do?
In short, we work for clients the industry avoids (private clients/people not companies!) or and we focus on transactions that the industry poorly services. We make our mark in the corners of the market which are the most difficult and most poorly served. Traditional private equity and corporate finance make simpler money in more traditional ways with more corporate clients. For us, the challenge of solving difficult problems for teams and leaders we respect is part of our reward.
What sectors are in your strategy?
We don’t operate sector strategies. We operate leader & management strategies. We find great teams and leaders (or they find us) and together we work with them to design, build and deliver on their chosen strategy. Our strategy is simply helping others achieve theirs.
What are your investment/transacting timetables?
Whilst every strategy will be different we will typically expect that:
Ideation/Design – where we work with teams to define the goal/plan – will take 30 days
Research – where we use our data & network to define opportunities – will take 30 days
Outreach & negotiation – where we deliver off-market deals – will take 30 days
Structuring & transacting – moving from Heads to diligence to close – will take 90-120 days
We have no fixed timeline for return of investors monies and it’s a significant advantage to be able to invest with the specific strategy in mind.
Who are your investors?
A very broad church of high-net-worth’s, former owner-managers who have exited, family offices and credit institutions. We are always adding to our panel/partners and take pride in the breadth of options we have available to us to help shape truly bespoke teams and solutions.
How can you get the best teams?
We offer a unique “management-first” proposition. That makes winning partnerships with the best-in-class easier than it will be for our peers who have a less compelling offering and a less compelling set of examples and peers to reference. We believe that over time we will become nationally the go-to partner and proposition for all sector leaders looking to achieve more.
How much do you have to spend?
As much or as little as we need. We have the resources, network and expertise to structure deals without any ceiling or limitation. That said, 90% of our transactions will likely be between £1m and £50m.
What transactions can’t you do?
We typically only engage with targets who are mature and profitable. By exception we will our teams and leaders to transact in the Special Situations market i.e those facing insolvency risk. But those are rare and with specific qualifying circumstances i.e we are bolting-on to a previously built platform and can evidence measurement and mitigation of the key risks brought from change of control during insolvency.
How do vendors and business owners typically respond to Independence?
Whilst you might imagine we maybe overly positive here, it is a consistent response from targets and their advisors that our approach is both well received and unheard of. Typically vendors respect dealing with experts and welcome the safety and surety of passing their legacy on to people who are not only credible in their sector but who can also then provide an inspiring vision and future project for the remaining staff to be excited to be part of.
What bandwidth do Independence have to cope with volume?
We don’t do volume. We operate with no more than half-a-dozen teams and leaders in parallel, each of whom will likely have 4/5 active priority transactions at any one time. In time we may industrialise for greater scale but at the moment we enjoy operating in an intimate and proactive fashion. We use technology, data and partners to enable us to operate & communicate with ever greater efficiency and transparency.
How accessible are Independence?
We accept and respect that we are dealing with people making the biggest move & commitment of their career. This is not therefore a regular job. We are accessible 24/7 without exception and take pride in making ourselves available in such a fashion.
Why do you focus only on MBI and MBO?
Because nobody else does and we believe that this market and our specific approach is a huge opportunity for sector-leading talent.
Why is your team not just made of people with private equity experience?
If we wanted to be a traditional private equity or corporate finance house we would have staff from those backgrounds only. But in order to build different, we need different. We have a collection of experiences from advisory, lending, investment and operating businesses which sets us apart from our peers in ways that allow us to bring value and transact more effectively for our teams.
What if my question isn’t listed here?
Come and ask us, we regularly invest in the opportunity to meet new people. If you don’t become a client there is every chance that adding to our network is only going to help us, our teams or you in the future – we see no downside to connecting with new talent.