How private equity can turbocharge business growth without management losing control

Owner-managed businesses are at the heart of the economy. They drive growth, create jobs, generate investment opportunities and ultimately play a critical role in supporting the overall prosperity of the UK.

Leading every one of these businesses is an ambitious management team or entrepreneur that seizes each opportunity to expand and drive growth. But, they don’t always do this alone. There are times when teams will look outside of their organisation for support to unlock their potential, and this is often found in an investment partnership.

A private equity partner can give owner-managed businesses the financial firepower and strategic expertise to take their company to the next level, no matter its size or sector. Whether it’s to set the wheels in motion on a new strategy, expand their range of products or services, or launch a buy and build strategy, these partnerships can be crucial for unlocking new growth opportunities.

At LDC, we have a strong track record of helping businesses to reach their full potential. An example of this is our partnership with Joules, a UK-based premium lifestyle brand which designs and sells clothing, accessories and homeware.

In 2013 LDC invested £22million to support Joules’ expansion. In two years, led by its founder Tom Joules, the business increased revenues by 50% to £116.4million. This was driven primarily by its store roll-out, with retail footprint growing from 61 to 98. In the same period, international revenues increased 198% to £10.6million, underpinned by significant investments in the group’s infrastructure. Following our partnership, the firm listed on London’s AIM market in 2016 and was valued at £140million.

We also helped ENSEK, a Nottingham-based software supplier to UK energy providers, led by CEO Jon Slade, embark on the next stage of its growth journey in 2017. Our partnership has helped to cement the firm’s market leading position, supporting the business to invest in developing new products and in early 2018, led to a collaboration with Centrica, one of the UK’s largest gas and electricity suppliers. The firm’s headcount also increased substantially from 65 people to more than 120 in the first year of ENSEK’s partnership with LDC.

This activity demonstrates how private equity can give owner-managed businesses the financial firepower and strategic expertise to take their company to the next level.

For those management teams preparing to take on external investment, there are a number of things to consider. The number one thing that any investor will look out for is evidence of a strong track record. At LDC, we want to know if the team has what it takes to deliver on its plans – we partner with the most ambitious teams with the tools to drive progress and success.

It’s also important for teams to show they have the knowledge and ideas to help their business thrive. A solid business plan and a clear strategy for achieving their goals is essential.

LDC is committed to investing £1.2billion over the next three years. This is something we plan to continue and regardless of the route to growth, our job is ultimately to recognise and invest in talented and ambitious entrepreneurs.

In recognition of this, we are looking to uncover and celebrate the UK’s Top 50 Most Ambitious Business Leaders. Now in its second year, the programme is designed to shine a light on the entrepreneurs running the UK’s most successful medium-sized businesses.

Visit https://top50.ldc.co.uk/ to make a nomination and find out more.