Why we believe the old form of PE has to change.
Today’s Radio 4 Today Programme lifted the lid on retail and one of the sources of finance underpinning many of the recognisable brands on the High Street today: private equity.
Generalist private equity has a reputation for having a singular focus: to make money, fast: saddling brands with debt, impacting operational decisions and restricting investment that usually fail the end consumer (through lower quality product, poorer service), and ultimately making long-term profitability unsustainable.
We have seen this. We understand this. But we do not agree.
At True we believe the old form of PE has to change.
Through our unique vertically integrated sector specialist retail and consumer business model, which provides access to the sector from startup through to Amazon, we focus on providing a platform of competencies that are better able to support and accelerate entrepreneurs or management teams in building a business capable of disrupting a £358bn sector, employing nearly 3 million people and representing a third of consumer spending in the UK.
Retail has never been as polarised as it is today. Businesses focusing on delivering a unique value proposition to customers via a sustainable and advantaged business model are positively thriving, those that aren’t innovating and changing to reflect this behavioural shift aren’t. Change and innovation isn’t a new development, it’s a constant: it’s a development accentuated by the growing pace of technological advancement and the consumer stampede behind adopting that advancement.
We set up True to be sector specialists, believing that simply providing finance and leverage was not enough. As growth investors, we invest in and partner with these fit-for-the-future business models who will be the new market leaders, a positive for job creation, a positive for the UK’s reputation as global leaders in e-commerce and innovation and a positive for UK productivity.
This is our type of private equity.
By being a vertically integrated sector specialist investment firm – investing in business models of the future through two mediums, our own sector specialist innovation Hub and our investment firm – we see all types of businesses, from startup to Amazon. With >2,000 business plans from 38 countries passing across our desks each year and strategic partnerships with some of the leading corporates across the world, we are better informed to make the right investment decisions, utilising the network that is created from having leading corporates and executives sitting alongside startup innovators to deliver reciprocal advantage to all.
Private equity has delivered industry leading returns on any metric over short, medium and long-term time horizons. To continue to do so, private equity will have to evolve, offer more to the management teams than just finance. True’s platform has been set up to answer the question of “why you” and we feel this is the future of the industry. It has never been more exciting to be in the retail and consumer industry, change is dramatic but exposing ourselves to consumer behavioural shift and partnering with those companies over the long term is our passion. We work with our portfolio to ensure they go where the customers are, with the product they want, delivered by a service that they need. A core focus on customer and product will always be the winning format.
Our vision? To be at the forefront of innovation and change in retail.
We are PE. But we are different.
Listen to Radio 4’s Today programme on 12th April: (from 00: 21:50):