The Secret Sauce, why homegrown private equity and debt capital works

Private equity-backed businesses have made a major contribution to the drive and ambition of the Northern Powerhouse.

They have created jobs and driven further external investment.

A panel discussion at the Rainmakers Conference examined some of the successful investment that the region’s leading PE houses have brought, along with their expertise and commitment to the North, as indigenous investment businesses themselves.

This session was chaired by Michael Taylor, TheBusinessDesk.com’s North West editor, with the panel including Tom Ray, CEO of Appsbroker and CTS, Darren Powell, CEO of NRG Riverside, Paul Waite, CEO of Rowan and Hannah Haigh, CEO of Meet.

Explaining the secret to PE success and how this can be broadcast more widely across the region, Waite said: “It’s about understanding the founder’s goal, what they are trying to achieve and aligning that with the leadership team you’re bringing in.

“In the northern region we have so many examples of PE success stories. There are many founders who can share success stories to dispel that fear of PE.”

Haigh said that while she was aware of “horror stories” surrounding some people’s PE investment journeys, she had personally spent a lot of time talking internally within her business to dispel the fear of PE.

“I had to show that taking PE investment would improve the business and create much more opportunity for everyone at the company,” she said.

Commenting on her own firm’s experience of working with private equity firm, NorthEdge, she said: “It’s important to have a really clear and unified goal. You need to be clear about your long-term goals. And you should have constant communication and updating – an authentic relationship.

“We had to pivot over the last year to 18 months. Now the portion of the business that used to be our cash cow before the investment is the largest cash drain.

“We’ve had to stay confident that this is a short-term challenge. So a lot of this is about nerve holding.”

Highlighting his own business’s funding journey, Powell said: “We’ve had nothing but really good experiences with advisory firms here.

“A lot of people have been tightening their belts but with support from Palatine we could invest £13m a year in new stock.

“It could have been a different story if they didn’t have that trust in our business plan.”

And Ray added: “We’re in a very high growth sector and last year we went to market looking for opportunities to grow the business.

“NorthEdge gave us the firepower to realise those ambitions. Having the right backers who understand the market is really important and there’s some hard conversations to be had.”

TheBusinessDesk.com believe passionately that the jobs created, specialisms developed, and the entrepreneurs unleashed give the Rainmakers community the right to a seat at the table and a voice in the debate on the economy of the North.

This platform, like the 2024 Rainmakers conference, is an opportunity to not only celebrate the contribution from funds raised and deals created, but also to look to the future at the challenges ahead.

Visit rainmakers.thebusinessdesk.com to find out more and subscribe