When looking to partner with management teams, private equity firms have a clear investment criteria. Having a strong trading history and track record which demonstrates sustained growth is essential, whilst also operating in a market which presents significant opportunities to scale.
There is no set growth trajectory requirement for middle-market private equity firms to invest, but LDC backs businesses which have profits exceeding £1million, and the capabilities and potential to increase this significantly.
While being financially robust is a prerequisite to any investment, the quality of leadership is the determining factor for signing a deal. Prior to investing in a business, LDC spends time with a firm’s management team to get to know the business, and more importantly, the people that run it.
But it’s also paramount that the leadership team running a business gels with investors too. Establishing a strong working relationship from the outset is the basis for a long-term and successful partnership.
LDC’s portfolio companies have grown by three times the national average for all SMEs, according to independent research spanning a ten-year period. Which is why our investment strategy is focused on backing our management teams to achieve their long-term growth ambitions.