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corporate finance 33


Altitude Partners – investing in growing businesses


For businesses seeking investment for growth in the range of £0.5 million – £2m, finding funding can be extremely difficult, writes The Business Magazine's Alison Dewar


Traditionally the numbers are too small to attract the interest of larger institutional investors and other options are hard to come by in such a tight market.


Filling that much-needed funding gap is private equity house Altitude Partners, launched in 2011 by Simon White (pictured) and Jonathan Simm.


“We are very unusual in providing capital at this level as most businesses of this size find it almost impossible to find pure equity investors,” said White.


“We are well funded, not only using our own money, but we also have retained funds from ultra-high net worth individuals who see investing in the growth companies of tomorrow as a good thing to do. There’s no doubt there is a real demand for investment at this level and funding of say, £0.5m to £2m of equity can be extremely valuable for smaller businesses.”


'... most businesses with a turnover of this size find it almost impossible to find pure equity investors'


Another USP for Altitude Partners is its emphasis on being based in the regional market, with its full-time Southampton office providing easy access to businesses to Brighton in the east through Crawley, up to Reading and Oxford, then along the M4 to Bristol, down to Exeter and back to Southampton.


“When most private equity houses talk about a regional office, it’s one that they visit, whereas we are based in and totally focused on the south,” said White. “We’re driven by the practical fact that many of the smaller businesses we deal with need quite a lot of help over the first six to 12 months.


It’s not just about turning up


at board meetings, we do so much more than that and we like to be close enough to see our clients whenever they need our support.”


White also makes the point that working with Altitude Partners provides much more flexibility because its investments are not governed by some of the restrictions of tax-driven funding schemes.


THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER 12/JANUARY 13


Both White and Simm have been in the industry “a very long time”. White is the former founder and partner in charge of BDO Stoy Hayward’s south coast CF business and, with more than 20 years’ experience in the private equity market, he has raised and invested more than £500m into trading businesses.


Simm, a former senior director of Lloyds TSB Development Capital, has over 15 years’ experience of private equity deal assessment, investment and portfolio management, and for four years was financial director of a rapidly growing private equity-backed manufacturing business.


White recognises that for some business owners the idea of giving away equity isn’t something they are always comfortable with. He says the approach is to persuade them to look at the bigger picture and realise that with an injection of cash, the business will immediately be worth more than it was and the subsequent utilisation of that investment will deliver much greater shareholder value over the medium term than would otherwise have been possible.


Most businesses the team is interested in will be established companies with a proven business model and that are hungry for growth.


www.businessmag.co.uk


“Having private equity investment brings discipline, it introduces corporate governance – KPIs, board meetings and minutes, there is constant attention to detail when it comes to managing the cashflow and we are always looking to ways of building the value of the company,” he said.


“Some people say they don’t want to do all of that, but within two months they start to realise why these things have to happen and the positive difference that it makes. We also have the advantage of knowing a lot of very good people who can be introduced to businesses where there is a need.


“We don’t want to run the company, we leave the management team to do that, but it is important that they are receptive to what we have to say. To be secure and do the best they can, businesses need to be well capitalised. We also have the expertise to make a difference as the businesses grow. If you run the company the way you did when it was a £2m business, then you won’t grow into a £20m business.”


Another Altitude advantage is the fact that as a small company itself, it is White and Simm who together make the investment decisions, typically delivering deals over a two-three month timetable.


The team operates across a broad range of sectors. Recently it provided £1,150,000 to Gradwell, a provider of VoIP telephony and internet solutions and it has also invested in Dorset-based domiciliary care business, The Care Division.


A strong management team, a top quality business plan and detailed market information play an important part in what the Altitude team is looking for, but above all it is ambition and a determination to succeed which White believes sets winning businesses apart.


Details: Simon White 023-8000-2030 swhite@altitudepartners.co.uk www.altitudepartners.co.uk


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