Richard Ibbett’s job is to identify management teams across the North West looking to grow their business with the backing of a private equity partner.
He forms part of a 10-strong team in Manchester looking to invest about £100m in around five to six new investments every year.
Ibbett, who took part in TechBlast’s latest Going 4 Growth roundtable, joined LDC in 2013 and has since supported some of the region’s most successful growth stories including Mitrefinch, Ellis Whittam, Waterfall, Inprova and current portfolio including CTI, PAM, WCCTV and Love Energy Savings.
Explaining LDC’s approach Ibbett says: “We primarily back management teams, not businesses. We’re looking to invest in a business but really, we’re interested in the people that run that business.
“We look to try and back founders and CEOs who are going on a growth strategy and they want some support with how they might deliver that.”
Ibbett says having the right people and culture is vital when choosing to invest.
“We’ve been operating in this market for over 40 years,” he says. “We typically look at businesses making at least £1m in profit and provide an investment around £10m as a minimum.
“There are a lot of businesses that will be too small for us today but will be the right size for us tomorrow which we are actively looking to build relationships with.”
People, people, people
Ibbett says when it comes down to investment decisions LDC are looking for people, people and people.
“It’s the basic things like product, service, sales and strategy,” he explains. “For me, it comes down to people. It’s all about people. And it’s all about culture and talent. If you can get that right you will always have a successful investment and business.
“It’s a competitive market out there. When we meet a lot of entrepreneurs, they typically will have more ideas and they have the capability to execute with their teams.”
Ibbett says founders and owners must ask themselves some important questions when trying to grow a business.
“Where are the things you really think you can do and what are the timeframes you think you can do them over? he asks. “Have you actually got the right people and talent to execute those in the business?
“Up to a certain level and size you’ll often have a single person or two people at the top that will have their tentacles into everything and they’ll have quite a lot of control over the business.
“The challenge with growing to that next level is how do you recruit high calibre people around those individuals in a second tier or senior team management team?
“The next piece is how do you empower them? How do you give them the authority to go and deliver their tasks to the business without the entrepreneurs or the non-executives or the investors getting in the way of what they’re doing?
“Let them go and run their part of the business successfully. Trust them. You know they’re high calibre and they can go and deliver.”
Long-term
Ibbett says LDC take a long-term approach to their investments.
“That’s the investment strategy we’ve followed a number of times which I don’t think many of our competitors do,” he says.
“We take the view that you have to invest in people, systems, processes, sales and marketing capability. In the long run, the top line growth you’ll deliver off the back of that in years two, three and four will benefit everybody. That’s how we try and think about it.”