4th July 2016

Private Equity Fund Manager of the Year – UK

At Privet Capital we look to do special situations investing which involves unusual deals where there are issues within the business or the transaction which makes it more challenging for strategic investors or mainstream private equity firms.

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Private Equity Fund Manager of the Year – UK

Before Privet I was at Deloitte for nine years doing insolvency and restructuring, then 10 years at 3i. This combination of investing and operational experience lead me to set up Privet in 2008. Last year was a really positive one for us with two very interesting investments, both in the manufacturing sector which we know well. Both were strong businesses but with challenges in strategic focus and management. Both also had historic pension problems.

These are just the sorts of things we look for. We like to get stuck in to the operational detail of businesses – our style is very hands on. That’s a bit of a cliché these days but, as one investor said to me the other day, there aren’t many PE firms that really do it – we do, with the Privet team spending 2-3 days per week with our businesses in the early days. Breaking down a business into its core components and assessing what they do well and what they could improve on is key. Bringing the team and the overall business together to identify solutions to any problems is vital. Although our management style is quite challenging it’s also very transparent. In order to understand how to make businesses better we can ask hard questions but in a sense there are no right answers as such, which seems to be quite a refreshing approach for many management teams!

It has been interesting watching the private equity market continue to evolve over the last few years as the players move around in a fairly Darwinian way. Investors are now looking for more clear value propositions rather than just buying a business and making money through financial engineering. In a very competitive market you need to be seen doing something different, in a sense going back to private equity roots can help you stand out from the crowd as you look to make good money by genuinely improving businesses. The credit market has also been interesting, with a real polarisation in availability. Really good businesses can get great gearing, and the bottom end has a broader range of specialists now. But the mediocre businesses struggle.

In terms of technological developments they seem to be occurring faster and faster. I’ve been fascinated by the recent headlines around robots taking people’s jobs. I think it is over-played, but there is a real change we will need to adapt to, albeit gradually. It is our hope this will continue to evolve in a positive way and provide an opportunity to create something new or a new way of looking at something.

Within the businesses we’ve invested in, Aeromet for example as a small UK manufacturing business has developed a fantastic new alloy technology which will effectively pave the way for our growth over the next few years. Similarly with the defence optical products business we have, new product development is key to keeping our customers engaged. Technology can be quite risky, not everything will work, risks and opportunities need to be carefully considered. If you don’t keep track of technology you will, though, be left behind.

We were please to get this award – it is always nice to get some recognition for some of the good stuff we do. At present this is a very good place to be. Going forward, we are looking to identify similarly interesting businesses which will enable us to be very much ‘hands on’. Taking a business to a completely different level where we can make a difference is what we are all about. Buying a business which already has steady growth isn’t for us, we are looking to apply our skills and experience to more challenging situations.

Company: Privet Capital LLP
Name: Stephen Keating
Email: [email protected]
Web Address:
Address: 4 Duke Street Mansions, 70 Duke Street, London, W1K 6JX
Telephone: 44 20 719 33382

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