Investec Private Capital is helping to support entrepreneurs realise their ambitions more than ever. In the last 12 months, the business has recorded extraordinary business growth and navigated its clients through a challenging backdrop.
What is different about Investec Private Capital?
Since I started at Investec, there has been a constant evolution. But while the bank has continually sought to adapt to a changing world, we have been steadfast in our entrepreneurial mentality. I believe this gives us a level of authenticity; we genuinely strive to understand our clients’ journeys and unique needs.
This means going the extra mile to really grasp their motivations, whether that is to continually disrupt industries or innovate in related fields. It also means being flexible and having the ability to pivot as business plans evolve – something inherent to innovative growth businesses.
“We look holistically at our clients’ needs through a lens of understanding, mutual opportunity and connectivity.”
We have an entrepreneurial thread that connects everyone on our team. We look holistically at our clients’ needs – and do this through a lens of understanding, mutual opportunity and connectivity. These core attributes have been invaluable through a pandemic which has brought an unprecedented level of business uncertainty to UK firms.
Whether established entrepreneurs, business owners or high-net worth individuals, our clients tend to have a lot of moving parts and need varying levels of support, whether this is advisory expertise or leveraged finance options. Without divisions of accountants and lawyers, our clients need rapid and seamless access to different areas of banking services, and our de-siloed approach, we believe, sets us apart from other banks.
In a world of accelerating engagement through technology, the traditional banking method needs to be replaced by a more holistic approach where a client feels supported by a diverse and interconnected ecosystem.
Do your clients have shared traits?
Our clients might be diverse in personality, background and outlook on life, but they are all connected by what we like to call the ‘golden strand’. This is a level of expertise in a niche that has allowed them to consistently create value in their chosen space.
Our clients also uniformly express a clear vision of the future for their businesses. From there, we consider how our capital can play a meaningful part in that journey. When we look to begin a relationship with a client, we do not just look at technical fundamentals, we look for clients that are open minded, can articulate the growth trajectory with clarity, and have a proven track record in their respective area of expertise.
These entrepreneurially minded individuals are leaders in their fields and, as a result, are already independently wealthy and successful. But they are not at the end of their journey, and in many cases require external capital to fuel their growth.
Our clients tend to be asset rich, cash poor, time poor and in growth mode – and this is where our flexible liquidity can help them realise the next stage of wealth creation.
What is an ‘equity mindset’?
Developing an equity mindset starts with seeing through the eyes of our clients. Our clients are rarely interested in the dynamics of debt, but rather how financing can play a role in supporting equity growth.
While giving away equity can have a role, in the current environment where the cost of debt is at a historic low, leverage can offer a cost-effective solution to accelerating the trajectory of new enterprises.
“It is essential our clients are not kept awake at night worrying about the level of debt they are encumbered with.”
Even in the depths of the financial crisis, the most conservative mid-market private equity backed deals had 5% margins and fees, despite being lowly levered and fully amortising. These days, you can achieve a lot more leverage for your buck. Thus, it is prudent for business owners to consider this option as a long-term strategy before raising equity.
Our mantra is that we want our clients to be laser-focused on growing their enterprises – and this should not be compromised when they take on debt. It is essential they are not kept awake at night worrying about the level of debt they are encumbered with. This means we think a lot about the shape of our financing proposal, allowing the client to focus on running the business.
How have you succeeded in a challenging environment?
We have a diverse set of clients who are naturally at different stages of their journeys. Some, who had been through the financial crisis, viewed the coronavirus emergency as an exit opportunity or wealth realisation point. In these situations, our team was able to create mutually beneficial arrangements for multiple stakeholders, including amicable management buy-outs.
On the other hand, many of our clients saw the pandemic-induced disruption as an opportunity to create more value in a profoundly changed landscape. This second group has been a major focus for our team since the onset of the pandemic, and we are incredibly excited to help these clients realise their ambitions as we move into a post-pandemic world.
For many, this period has been an opportunity to make acquisitions and expand sector footprints. We have done over 30 transactions in the last 18 months, where we lent directly to companies or levered balance sheets to access crucial liquidity for new opportunities in wealth creation and the realisation of powerful synergies. For example, we supported Stanhope Capital in merging with FWM Holdings, creating one of the world’s largest independent wealth management groups.
The merger comes at a time where wealthy individuals across the globe are increasingly seeking dynamic financial advice during a period of low-growth and an uncertain inflationary outlook.
What trends have emerged from the pandemic?
We have been surprised by the elevated levels of transaction activity over the last twelve months, as our close-knit team has looked to unlock business growth for a spectrum of different clients.
The pandemic has unleashed a wave of creative destruction. It has stimulated an acceleration in the transition to a more virtual world, while new hybrid ways of working have challenged the very nature of work. But there have also been more subtle narratives.
“One incredibly compelling theme that has emerged from the pandemic has been the rise of husband-and-wife leadership teams.”
One incredibly compelling theme that has emerged from the pandemic has been the rise of husband-and-wife leadership teams. We have done a number of recent transactions with two married partners, who have previously been successful in their respective professional fields and now want to create a synergy through a business venture.
We have also seen the acceleration of bigger themes, as many people questioned the unprecedented damage to our planet and our responsibility to the next generation. We are increasingly seeing environmental, social and governance (ESG) criteria as factors in funding. We are also seeing new industries emerge that address ESG concerns, such as meatless food.
It all starts with a conversation. Get in touch to find out more.
Private Capital Team
Client journeys – transformative solutions delivering growth
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