31


So what does Palmer and his colleagues look for when they are brought an investment opportunity?


“We’ve always had a lot of companies that have approached us for financial backing, but often when you look into the details of the business plan, the directors have got £100,000 to £150,000 a year pencilled in for their salaries. That’s not starting up by yourself; it’s not being an entrepreneur. You’re just seeking to swap employers and increase your bonus arrangements.


“So a lot of people get ruled out when we say that you have to live off of the profits of the company. We are not subsidising salaries for them. We’re looking for true entrepreneurial spirit. Typically, we’re being approached by thirtysomethings and it’s the best and worst time for them to go it alone. It’s great because they are full of ambition, energy and ideas but at that stage of their life they have often recently got married and started a family. They have to be really rather brave to take that step.


“For us, the investing in people comes first. We have to really like and trust the people involved because if we don’t, it’s just not going to work. If you get tempted by a good deal with people you’re not so sure about, and the situation goes wrong then sorting it out is going to be difficult. If you find really good people and you have a deal that goes wrong, you’ll get through it.”


Not ‘playing favourites’ is also essential when you are invested in several companies. Palmer notes: “We have


THE BUSINESS


IN THREE DEALS We asked Ray Palmer to name three deals which he felt which were emblematic of the business.


GOLDEN GATE PETROL FILLING STATION PORTFOLIO


1


“It was a portfolio of Texaco filling stations that we bought from the supermarket operator, Somerfield in 2005.


“They wanted a buyer who was capable of redeveloping all of the properties into proper filling stations with convenience stores – instead of the portakabins they were operating out of. RBS was our strongest competitor and we won because we had the financial ability to cope with the complexity of the deal and also – because of the propcos we were invested in – the ability to deliver a string of c£3m developments across a wide geographical spread.


“It worked very well, and we sold out of it profitably five years later.”


DISCOVERY PARK, SANDWICH


“In 2012, we bought Discovery Park in Kent with two partners. It was a 3m sq ft science park that had previously been Pfizer’s main UK R&D facility.


“ I WAS COMING SECOND IN JUST ABOUT EVERYTHING I BID FOR”


2


“At one stage it had 7,000 people working there but when we bought it, there were only about 500 and most of the buildings were unoccupied. We demolished about half of the buildings which were past their sell-by date and when we sold it towards the end of last year, there were 2,500 people working there. We bought it when there were four businesses in occupation, and sold it with 154 in place.


“It’s become a regeneration template.”


ACQUISITION OF FUND MANAGER, INVISTA


“When we bought Invista in 2012 it had a variety of property assets but it also had a lot of complexity within the company including litigation from some of its major shareholders.


“We managed to resolve a very complex mess in a very profitable way and it’s another deal we’re particularly proud of. It represented a combination of property and financial skills which you don’t often find in the same place.”


3


The talent spotter


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