What do you do at Pictet?
As Head of Direct Private Equity, my job is to identify and invest in promising middle market companies that are often owned by families and entrepreneurs. We are typically the only private equity (PE) investor and join their board to play an active role in the business.
What industries do you focus on?
We focus on 3 core industry verticals: Business Services, Education and Industrials. We focus on two core mega trends as applied to these industry verticals: Energy Transition and Digitalisation.
What sector excites you most?
Every sub-sector we focus on presents many compelling opportunities to back great entrepreneurs and so it is hard to single out one particular thesis or industry vertical. At the moment we are very focused on the long-term winners in B2B services around energy transition
infrastructure as one example.
How do you identify promising companies?
We select companies with high operating margins and differentiated products or services. They tend to operate in niche markets with high barriers to entry.
How do you persuade businesses to partner with you?
Today promising companies can choose from many PE firms. They usually look for investors with expertise and networks who can bring more than just money to the table.
How do you help these companies achieve their ambitions?
We have an in-house value-creation team and collaborate with external advisors and operating partners. 'Buy and build' is a prominent strategy for us. We help companies increase revenues, optimise pricing, generate operational efficiencies, transform data and IT systems and
drive transformational M&A. We also help management teams to bring in and develop new and existing talent.
What do you look for in management teams?
When speaking with management teams I want to understand how they work together, what is the operating culture of the company and what are their core values. Above all we like backing entrepreneurial management teams who have a clear vision of where and how they want to grow their business.
How important is intuition in the selection of businesses?
With experience, you can develop quick insights about companies. But the team and I still rely upon data and analysis to take investment decisions.
How do you conduct research before investing in a market or company?
We start with desktop research to cover publicly available information, and attend expert networks and conferences to hear about the latest trends and companies. Our existing relationships with senior executives, consultants and other industry experts are also essential to developing a deeper understanding of a market or sub-sector. We can often spend six to twelve months on an investment thesis until we're comfortable investing in a sub-sector.
What's your background?
I did a Master’s in history at Cambridge University. After graduating, I worked in investment banking at Morgan Stanley and then joined
a mid-market private equity firm in London 20 years ago.
Why private equity?
I enjoy interacting with management teams and founders who are passionate about their businesses and helping them as a trusted partner to develop and grow their own companies.
Does history influence you as an investor?
Mark Twain said, "history doesn't repeat itself, but it often rhymes". You can often see patterns of behaviour, whether market cycles or new technologies coming into a marketplace. I think it gives me a better long-term perspective.
How do you reenergise and stay focused?
I have a young daughter, so time is precious! But to relax I play tennis and golf.
Is there a book or podcast you'd recommend?
Shoe Dog by Phil Knight, the founder of Nike's autobiography. It shows you that success doesn't come quickly and starting a business is hard work, especially at the beginning. Knight identified an interesting trend and a promising market and then brought relentless focus and passion to bring Nike where it is today. I also listen to podcasts about neuroplasticity, the brain's ability to modify, change, and adapt structure and function throughout life and in response to experience. I recommend Huberman Lab and Lifespan with David Sinclair.
Public equity, private equity, direct private equity in a nutshell
Private equity investors generally take significant or controlling stakes in privately owned companies that are not listed on the stock market. Public equity investors usually buy shares in listed companies and typically smaller positions which don't allow so much influence or control. One of the big differences between the two is that in private equity, you have a significant influence or control. You can influence change much more significantly than in public equity and typically sit on the company’s board, working directly with management teams and helping the company grow.