Marrying the right CEO to your investment
Interview with Mark Ligertwood, of Dunedin Capital, on getting to grips with one of the most critical and widely debated issues facing private equity investors…selecting the right CEO for your investment. Read more

Private Equity and Pension De-RiskingKelvin Wilson, Associate Director with Grant Thornton’s Pensions Advisory Practice focuses on critical issues for private equity investors, often forgotten in the first round of due diligence or the euphoria of looking at an exit.
Read more

Bribery and the Risks for Private Equity Investors
In 1995 the UK signed up to the OECD’s Anti-Bribery Convention. 16 years later we attempted to comply with our obligations by passing the Bribery Act 2010.
Read more

Delivering value for our clients
Presenting summary case study extracts for PILOTcases has the approval of the interim executives and the clients concerned but to preserve confidentiality, names have been changed or abbreviated.
Read more

Getting management right: bigamy, burning platforms and bottlenecks
In 1910, Ralph Furse joined the Colonial Office’s ‘patronage office’ and set about improving the way that young men were selected for their roles directly governing large swathes of Africa and Asia.
Read more

Point of View
Peter Hammermann, Co-Head of Barclays Private Equity Europe and Managing Director of the firm’s German operations, speaks to Pilot Partners’ Michael Gebauer. Read more

PE and Interims in CEE
Tamas Toth, CEO of Interim Resourcing LTD, PILOTpartners’ affiliated firm in Hungary, talks here about trends in the CEE private equity market and the response of the interim management sector to new opportunities in the region. Read more

The Pilot’s Log Q&A
Michael Gebauer talks to Robert Deri, an interim Executive about internet mail order growth and his latest role as Group Finance Director for Scala Holdings plc and the process resulting in the successful sale of the business. Read more

Change Management and Private Equity
Change Management is surely just the internal actions in a company to execute the structure plan and correct the business processes, right?. No, there’s a lot more to it than this, says Nic Vine. Read more

PILOT on launching SMI
PILOTpartners announces the formation of a global resourcing partnership with a common focus on senior level interim executive resourcing, operating within a framework of common ethical and operational standards. Read more

Bowmark Capital’s Kevin Grassby dissects private equity’s fittest proposition. Now is the time for many private equity investors to play it safe.

Industrial Revolution

Bruno Deschamps, a senior adviser to 3i and founder and managing partner of development capital firm, Entrepreneurs Partners LLP, shares his views on the future role of private equity and why it will mean a cultural evolution for many firms.

Turnaround to remember

La Seda de Barcelona turnaround completed with capital increase and relisting following debt restructuring in an English Court. Alan Tilley of Bryan Mansell & Tilley reports on how it became a name to remember in debt restructurings in August 2010.

PILOT launch CANE

PILOTpartners announces the launch of its Chairman and Non-Executive Practice (CANE). Why CANE and why now? John Gerry outlines the three main structural reasons for this initiative and explains why it should matter to private equity folk.

In challenging times, businesses more than ever need experienced leadership and wise independent counsel. PILOTpartners has assembled (and continuously recruits to) a panel of senior experienced Chairmen and Non –Executives. Members of the Panel will share these characteristics:

• Demonstrable leadership skills, particularly in challenging situations.
• Deep experience of their sector/s
• Ability to provide sound and rapid commercial evaluation of a business
• Experience of handling diverse stakeholders and advisers, particularly in a private equity portfolio situation
• Proven organisational skills
• Top class mentoring experience
• A track record of strategy development and a commitment to timely completion
• Keen awareness of corporate governance guidelines

As part of its service to clients, PILOTpartners offers a Corporate Governance Review. This takes the form of a semi–structured set of interviews with board members leading to a full report to the Chairman (or relevant stakeholder) covering;

• Definition of governance roles
• Identification of key Board functions
• Improving Board processes
• Plan for continuous improvement

The aim of the Review is to assist boards in ensuring that they are carrying out their governance obligations and making the most of the talents available to them. The proposition that boards should understand and manage their own performance has become a global trend, and boards are coming under increasing pressure to recognise and correct corporate governance problems. This review will act as a measure of board’s ability to achieve this.

The Practice is managed by partner John Gerry

E: j.gerry@pilotpartners.eu

T: +44 (0)777 485 0508

Managing partner, James Wheeler, says “John Gerry’s appointment and the launch of the Chairman & Non Executive practice complete PILOTpartners’ planned full service offering for board level resourcing for its clients in UK and European private equity portfolios, small to mid-sized listed and private companies and business going through crisis and transition.

John Gerry has 15 years’ experience resourcing board level executives as managing director of EIM and Whitehead Mann’s Interim Partnership and latterly the CEO practice at AshtonPenney where he worked closely with the founding members of PILOTpartners, James Wheeler and Michael Gebauer. John has been a non executive with PILOTpartners since its inception in January 2009.

Before embarking on his executive resourcing career John was managing director at Wickes Retail, Mecca Holidays and Hotels and Londis Ltd following senior management positions at Fisons and Imperial Group. Aside from his executive positions, John has chaired charities and held non-executive roles in a number of SME’s.

PILOTpartners specialises in resourcing board level executives & teams who deliver leadership & lasting change in challenging situations throughout the UK & Europe.  These include interim & high level project management, permanent , chairman & non-executive appointments, commercial due diligence and specialist sector advisory.

For further information please contact:
John Gerry, PILOTpartners E: j.gerry@pilotpartners.eu T: +44 (0)777 485 0508
James Wheeler, PILOTpartners E: j.wheeler@pilotpartners.eu T: +44 (0)780 859 0176

The Pilot’s Log Q&A
Michael Gebauer talks to interim business integration expert, Paul Siegenthaler

UK Retail – more pain to come?
by Gavin George, European MD of GA Asset Advisors

What’s happening in France?
James Wheeler talks to NIM Europe’s Pierre van den Broek

Established businesses go wrong because management fails to react to change. When faced with a crisis, management feels that by doing what has always worked in the past will work again: and it does not; because things have changed.

Failure to react strategically or operationally results in degraded operational performance and from there on to a shortage of cash. It is at this point that lenders become interested. “You have moved me to a position where I feel at risk” they say. The client is of course unaware that he has moved anyone anywhere. What to do?

The client company needs two things: cash and management. Cash it likes. But cash as we see above is a dependent variable, depending on operational performance, which in turn depends on management of change. But the client company does not like outside interference. Only the best companies willingly accept management support; the bulk of companies do not, or at least not without an “arm wrestle” with the lender.

Currently lenders in general and banks in particular are “bad” because they have loaned too much in the past and “bad” because they are not lending currently. The banks have in general picked up the tab from a succession of failed governments, and currently have a bad press. Being almost universally unpopular means they are loath to press companies to accept turnaround management support.

So the banks do not have the money to lend, and also do not have the muscle to push compromised management to take on the support they need to manage out of their problems. But cash and management are what the client company needs.

A current Collingwood project shows the above to perfection, set against a political backdrop that restricts bank intervention:

Client company experiences significant volume change

• Client company fails to react
• Cash pressure ensues
• Bank approached for more money
• Bank suggests “use Collingwood” – February 2009
• Bank persuaded to put in more money
• Client company uses money and needs more
• Bank presses repeatedly to use a change management specialist or turnaround director e.g. Collingwood
• Client company agrees to “brief review” of the situation
• Collingwood selected for “brief review” (September 2009)
• Notwithstanding Collingwood and the client getting on well, Collingwood not engaged until November 2009
• Collingwood role restricted to finance
• November to January client loses £220k
• “Showdown” talks between Collingwood and the client: client agrees to extended role
• February to April client makes £170h profit: major and accelerating changes throughout the client firm

If the client had reacted earlier, the client company would only have had a £500k “hole” in their cash – reflecting the cost of responding properly to the external economic climate. But now, more than a year after they had the chance to benefit from external expertise, the client has a £2.5m “hole”, something the bank will not entertain. The client now has management support: the question is where can it get its money.

The traditional route for the client company would have been to borrow more from a bank. This option is clearly closed. An alternative would be asset based lending, but the condition of the firm is such that it would be inappropriate, and ABL funds seem to be becoming scarce.

An ambitious company might be prepared to part with equity and to opt for private equity involvement. But this takes months to organise. What to do? The road Collingwood took was to seek cash on theXtraMarket. The advantages of taking this route are:

• Quick response
• Strategically proactive partners
• A tailor made financial solution

Fortunately (and recently) the client’s situation is well on the way to resolution to the benefit of all involved.

Profile: Aidan Condie

aidan-condie@btconnect.com

Collingwood Management Limited (Collingwood) specialises in the management of change. So for example when a small company becomes a medium sized company, Collingwood can change organisation and procedures throughout to be more appropriate to the new scale of client company operations. And it can take a company from medium to large and can also manage change in shrinking companies. Collingwood works in virtually any sector, but there is a specialisation in manufacturing and to-business service. It enjoys a strong reputation with lenders, equity providers, professional advisers and other institutions.