By Permira’s Head of Portfolio, Oliver Steil
The Portfolio group is a dedicated team with diverse operational backgrounds that provides specific functional expertise to help management teams build better, stronger businesses.
Supporting management teams to create value
We first get involved in the due diligence phase, long before the funds make an investment. That's when we work to uncover the quality of the business and build a value creation plan designed to unleash maximum potential. Assuming our funds go on to make the investment, our role then is to support management teams to implement and execute on the plan to drive sustainable growth across the company.
It is our job to ensure that the plan is embedded in the company with as little disruption as possible. This is a crucial inflexion point in their growth journey and can be unsettling. We support management teams to set out a trajectory, get the right reporting and processes in place, and create the momentum for growth, providing a roadmap. It is then down to the management team to drive the plan forward.
We value and promote transparency – it is fundamental to forming and executing the plan. Frank, open and frequent dialogue with the management teams is critical. This allows us to get the information that we need quickly, to identify and resolve issues and to support the people who are responsible for the various initiatives.
A growing team of experts
We are a relatively small group built around the Permira funds' investment strategy and the practical needs of portfolio company management teams. We have built a team that reflects these priorities and mirrors the wider firm structure, with 10 individuals in key geographies, sectors and functional areas to proactively add value to the businesses we back.
One important area of focus for us is Environmental, Social and Governance (‘ESG’). Adinah Shackleton (Head of ESG) helps to ensure that ESG matters are considered at every stage of the process, and that good practice in this area helps to drive operational efficiencies.
In addition to our experienced, global team, we have access to an extensive network of senior advisers and consultants across all five sectors, some of whom sit on the board of a number of the funds' portfolio companies. This could mean working closely with them during the initial set-up process at a portfolio company, or simply recommending them to a management team member.
We have made significant progress over the past 18 months recruiting the right blend of skills and experience for Permira and formalising the process.
The Portfolio group in action
The Portfolio group has helped to create strategic value at every stage of the process, from due diligence to the 100-day value creation plan and in major strategic projects throughout the lifetime of the investment.
A great example of how our work at an early stage in a transaction can enable management to focus on running the company is Magento (P5, 2015), an omnichannel commerce solutions provider. Our Technology team had been building a relationship with eBay for some time and tracked the ownership of Magento for years. We knew we wanted to back Magento – it was a wonderful software business with a massive customer base and leading positions in Europe and the US. But eBay was looking to sell a number of other companies that didn’t fi t our profile and we thus spent a lot of time engineering a team-up to allow the Permira funds to only acquire what we wanted, including getting the assets that became Pepperjam. Time was tight, we had only a few weeks to carry our due diligence and structure the entire enterprise – an extremely complex process involving separating multiple businesses from a division that was itself about to be carved out of eBay. Crucially, we went through this process without heavily burdening CEO Mark Lavelle, to give him the capacity to continue with his own challenge of running the business.
The Portfolio group also played a key role in supporting the management team to create value at Vacalians Group (P5, 2015), a leading European player in outdoor holidays. We formed an investment thesis based on an attractive underlying market with resilient growth. The plan sought to upgrade the overall customer experience and introduce a premium range with additional services. Following a successful trial, this coming season will see the roll-out of high-end vacation offerings across a number of target destinations.
We also facilitate best practice sharing through a series of portfolio conferences. These allow for knowledge-sharing among the senior team members from specific functional areas who are invited to hear about the latest developments in their field, and to share expertise