London-based Vision Capital, which specialises in acquiring portfolios companies from private equity firms, sometimes called direct secondaries, has appointed David Robinson as chief operating officer. Robinson joins the firm following 18 years at Ernst & Young where he most recently served as COO for its operations in northern Europe, the Middle East, Africa and India.
The appointment came just under a month after Vision boosted its investment team with the addition of Lorenzo Russo, a senior Italian investor from Change Capital. The hiring of Robinson and Russo, along with plans to add other professionals of other nationalities, are a part of the multicultural firm's strategy of institutionalisation and “internationalisation”, managing partner Andrew Hawkins says.
“What David helps us do is to take another step in the direction of making us a more international organisation,” he said. “We are strengthening our operational base to help deliver our growth plans, and we've already bought businesses which are located all over the world including in the US, Europe and even in the Far East.”
Vision's major focus for the time being is Europe and potential growth opportunities there, including areas like German secondary banking or Italian private equity groups looking to make exits. In addition, the company is also looking at the potential for expanding its business in the US, where there is also a lack of similar firms following their business model of taking control positions, rather than minority interests, in portfolios of companies.
“We'll buy half a dozen businesses from, for instance, a private equity group,” Hawkins said. “Two might have a base case outcome of zero, and we invest minimal capital in these, two may be pedestrian performers, and two will be great. But they couldn't auction off the difficult ones so they put them all into a package and sell them to us. There is a huge level of trust involved, and we have a very strong reputation for integrity and delivering what we promise. Very surprisingly, no one else is doing this, in the UK, in Europe or in the US.”
In the last two years Vision, which recently switched from a limited liability company to an LLP partnership, has acquired four non-core businesses from UK food group Northern Foods for £160 million (€203 million, $275 million) as well as retailers Threshers and BrightHouse from private equity firm Terra Firma for €318 million. Since then BrightHouse has reported a 60 percent increase in pre-tax profits to €25 million for the year to last March 31, with plans to open 25 new stores in 2008.
Thresher's Group chief executive Yvonne Rankin was brought on board to help improve its business and streamline its operations following its acquisition, taking such measures as reducing its product portfolio by eliminating poor-selling products, and repositioning brands and pricing strategies.
Both BrightHouse and, to some extent, Threshers have benefitted from the recent economic slowdown, as people who are having to do more with less are taking advantage of BrightHouse's rent-to-own business model. Meanwhile Threshers has moved away from its previous losing strategy of taking on the supermarkets head on and focusing on areas of strength like convenience and expertise.
“We're helped to a degree by the fact that if you look back on every recessionary cycle, drinking in the home has tended to go up,” Hawkins said. “It's nice in difficult times to have businesses like Brighthouse and Threshers which have a tendency to respond well to recession.”
Such investments have come from the firm's most recent fund, Vision Capital Partners VI LP, which has programme investment capacity of up to €1.2 billion.