Bright Minds: The Power Top 50 2011

Business XL's ranking of the most influential investors and serial entrepreneurs in the UK. We've spoken to some of the best brains in business, the dynamic entrepreneurs and investors driving growth.

The UK's 50 most influential investors & serial entrepreneurs in 2011

The UK's 50 most influential investors & serial entrepreneurs in 2011

Business XL magazine's annual Power Top 50 ranking identifies the leading movers and shakers among UK entrepreneurs and investors.

We've spoken to some of the best brains in British business. Not the corporate politicians skilled at steering massive organisations, but the dynamic entrepreneurs and investors driving growth at smaller ventures.

As part of the process, we've asked them all for their UK economy outlook. Meet the bright minds emerging from British business.

 
1. Wol Kolade, managing partner, ISIS Private Equity (+7)

‘It’s been a frustrating year in the sense that the first half promised so much, but it didn’t really come out in the way we would have liked,’ says Kolade, who was hoping for more of a return to normal service after an ‘awful’ 2009.

It’s an honest assessment, but slightly misleading. ISIS achieved more exits than most of its peers, selling five of its portfolio companies including live-in care company Active Assistance and skiing-focused Enigma Travel Group for IRRs of 68 and 25 per cent respectively. It has also completed six investments, including a replacement capital deal of £3.75 million for spinal implants distributor Surgi C and the founder-led management buy-out of ticket distributor Encore Tickets for a total deal value of more than £20 million.

With funds of £680 million under management, including about £250 million in VCTs, ISIS is keeping to what it knows best, investing in companies valued from £5 million to £75 million, and has ‘no interest at all’ in following other buy-out firms by raising that threshold. ‘We like to stick to what entrepreneurs are doing,’ says Kolade. ‘That’s where growth is coming from in the economy.’

Looking forward, the affable Kolade reckons ‘there will be a tremendous opportunity in reforming the delivery of public services over the next ten years’.


2. Robin Klein, founding partner, The Accelerator Group (+5)

Don’t be fooled by Robin Klein’s low-key style or the fact he’s a grandfather. TAG has backed household names such as Lastminute.com, Last.fm and Lovefilm, with current investments including micro-lender Wonga and online gaming business Moshi Monsters. A new joint project with Index Ventures (where Klein’s son Saul is a partner) is Index Seed, which makes investments of between $50,000 and $1 million.

‘We always want to see every [opportunity] that’s coming out,’ says Klein. ‘But in order to do it properly, you really have to make a commitment and do things angel-style.’ The idea is to blend this approach with Index’s ‘institutional rigour’. As Klein says with typical modesty, ‘Time will tell whether we’ve made good decisions.’

Of the ten investments made by Index Seed so far, three are based in Israel, where Saul is working for a year, while fashion website StylistPick and freelance recruitment platform PeoplePerHour are among the UK-based ventures. The Kleins also run start-up mentoring programme Seedcamp, through which sums of around $50,000 are typically invested in ambitious businesses across Europe.


3. Sam Smith, chief executive, finnCap (+)

‘2010 has been enormous – it has probably been our busiest and most successful year to date,’ says Sam Smith. She names the management buy-out from JM Finn & Co, which was completed in April following a partial buy-out in 2007, as the event of the year for the specialist small-cap broking house. ‘It was a fairly intense negotiation to try and agree a price, and to actually convince them they did want to sell to us.’ As if finnCap wasn’t already the most talked-about AIM broker, an Avengers-style photoshoot for The Independent ensured that Smith kept making the headlines right up to the end of the year.


4. Ben Holmes, partner, Index Ventures (-2)

For Index, the year has been marked by more than 50 investments, many from the firm’s newly created seed fund, and one big exit: the float of online gambling platform Betfair in November with a placing valuation of £1.4 billion. The Betfair IPO had been long-awaited, but was ‘a very good exit for us’, says Holmes, who adds that he is continuing to look at deals in the gaming sector.

‘It’s a great time to be an entrepreneur,’ he states. ‘There are lots of things you can achieve with fairly limited capital, because of the emergence of platforms such as Facebook and the iPhone.’ In addition to the seed fund, Index boasts a venture fund of €350 million and a growth fund of close to €400 million.


5. Matthew Riley, CEO, Daisy Group (+)

Since founding Daisy in 2001, chief executive Matthew Riley not only oversaw its reverse takeover onto AIM in 2009, but a slew of acquisitions, most recently that of rival telecoms consolidator SpiriTel for £27.3 million. ‘The deals that we did last year gave us some real scale,’ he comments. ‘Integrating the ones that we did earlier in the year, like BMF, by the summer was one of the biggest highlights.’

Riley describes 2010 as a challenging but enjoyable year, one that pushed his own comfort barriers. ‘Doing the “City stuff” and getting used to institutional investors is quite new for me, probably the biggest new thing that I’ve done,’ he relates. ‘Meeting Neil Woodford, one of the biggest fund managers in the UK, you think: my God, this guy’s got the power to do anything.’

A keen mountain-biker and skier, Riley somehow balances business with family life, despite the fact that his home is in the North West and he spends two to three days a week in London. Looking ahead, there are no signs of his, or Daisy’s slowing down: ‘The plan is further acquisition to consolidate the fragmented market further, and to really capitalise on the underlying business that we have by growing it organically,’ he says.

 


6.David Hall, managing director of private equity, YFM (-3)

It was an intriguing year in more ways than one for YFM. In 2010, the firm committed about £15 million of investment to 50 companies, while realising the same amount from 12 exits - a feat that David Hall says was ‘really unexpected’.

In another twist, the firm, which has one of the UK’s largest portfolios of unquoted investments with about 250 concerns, injected 80 per cent of its cash into growth development capital compared with 20 per cent in management buy-outs (MBOs). Hall says this is an ‘absolute reverse from what the market was doing three or four years ago’, but a trend that looks likely to continue. New investments were made across sectors ranging from the MBO of manufacturer President Engineering to a growth capital deal for acquisitive Bluebell Telecom.

‘2011 is a fascinating year,’ says Hall. ‘You have a stock market that is telling you the economy is confident, shiny and looking forward, but there is still some caution.’ That’s because people don’t know how austerity measures are going to pan out, he adds.


7. Anne Glover, co-founder and chief executive, Amadeus Capital Partners (+8)

Glover observes that 2010 was characterised by the return of liquidity and the acceleration of growth. However, she admits that the fundraising climate remains tough, forcing Amadeus to ‘reach out to new pools of capital’ such as sovereign wealth funds and public market-focused institutions when it seeks co-investors for its portfolio companies.

The firm’s main fund made two new investments last year, in greenhouse gas measurement concern AMEE and vehicle data collection business Octo Telematics, while there were no fresh deals for its seed fund. However, the firm did chalk up one notable exit, the sale of Swedish software company EPiServer in November. The sum paid for the company wasn’t disclosed, but Glover says it was one of the most successful exits in Europe in the past three years.


8. Simon Cook, CEO, DFJ Esprit (+9)

International expansion was the main focus of 2010, says Simon Cook. The venture capital house became substantially more pan-European, posting partners in Dublin, Helsinki and Paris.

Another focus was exits, with notable disposals including former 3i portfolio business ApaTech, a specialist in bone repair technology, in a $330 million deal, and Phyworks, a supplier of optical transceiver chips for the broadband communications market, for $72.5 million. While investing was on the lean side – about one deal a month and mostly follow-on investments – Cook says this is likely to pick up next year. ‘We closed a fund, DFJ Esprit III, about £100 million, last year, so we have capital now for the next three or four years to invest.’

Cook adds that the firm’s portfolio will continue to be broad. ‘We tend to believe in the entrepreneur more than ourselves. We don’t think we are clever enough to spot which sector to put our time and effort into,’ he observes.


9. Ralph Cox, MD, BlackRock (+)

BlackRock is still the biggest investor in AIM-quoted companies, and the deceptively youthful looking Ralph Cox is the firm’s main UK small- and mid-cap man. He has now taken full control of the £450 million UK Smaller Companies Fund, which he has helped to run alongside Richard Plackett since 2003.

He says there’s a ‘quality bias’ to the firm’s investments: companies should have strong management teams, operate in markets with significant barriers to entry and consistently convert profits to cash, as well as offering strong balance sheets. ‘We hold a lot of our investments for the long term – five or ten years,’ he adds.


10. Patrick Reeve, managing partner, Albion Ventures (+15)

Investment firm Albion currently manages close to £250 million across nine venture capital trusts. Last year it took over the former Quester VCTs, SPARK 1 and SPARK 2, adding £40 million to the firm’s funds. Managing partner Patrick Reeve, a keen archaeologist with a love of classical history, strikes a balance between innovation and conservatism in his investment portfolio. ‘We’re doing a lot of work right now in the environmental space,’ he comments. ‘We’ve just completed on a waste food-to-energy plant in Scotland, which converts the waste to methane and then burns it for energy.’ Last year, Albion also invested in setting up a new independent school in Twickenham.

11. Bernard Fairman, founder, Foresight Group (+13)

Asked for his personal goal for 2011, Bernard Fairman proffers a quick response: ‘To run a business with 40 people and £500 million under management.’ And it seems he is well on his way. In five years his investment house has grown from 13 to 33 staff and from managing £89 million to £260 million. It has also shifted its emphasis strongly towards the cleantech sector. In 2010, Foresight saw few exits but continued to invest, injecting about £40 million into a range of companies. Despite widespread gloom, Fairman predicts a milestone year for Foresight, saying, ‘If you are not concerned, you are not paying attention. But I expect, and hope, that 2011 will be the most successful year we have had in our 25-year history.’

12. Alex Macpherson, head of ventures, Octopus Investments (+25)

Octopus saw its most active ever year in 2010, with 25 new investments across the early-stage and growth teams, including London health club business Gymbox and content management system developer VYRE. On the exits front, it’s been quieter, though Macpherson is pleased by May’s sale of organic baby food supplier Plum Baby to Darwin Private Equity for £10 million, which delivered an IRR of 30 per cent for Octopus.

‘Particularly on the tech side, the buyers are back and interested in what’s developing,’ says Macpherson. ‘The corporate world doesn’t feel anywhere near as negative as it did a year ago.’ Octopus manages 16 VCTs, more than any other provider, and has more than £2 billion under management across all its investment activities. The launch of Titan VCT 5 in January could add another £30 million to the pot.

13. Marion Bernard, chief executive, Northstar Ventures (+19)

Last year, Northstar launched three new funds for the North East, each backed with regional development money from the EU, as well as winning the mandate to manage a fund of £48 million for equity investment in Yorkshire and the Humber, new territory for the firm. ‘We’ve been inundated with opportunities from entrepreneurs,’ Bernard says. Key investments from the new funds include Durham Graphene Science, which attracted £100,000 to develop a manufacturing process for graphene, a form of carbon, and video game developer Eutechnyx.


14. Bob Holt, chairman, Mears (+24)

Housing maintenance luminary Mears has been powering ahead, says Holt, gaining sector leader status in the domiciliary care sector and helped in its social housing business by the collapse of two sizeable competitors, making Mears the only publicly quoted care business. In January, the group announced another £193 million of new contracts, bringing its order book to £2.7 billion. Meanwhile, business consultancy Green Compliance, which Holt chairs, is also flying high, spending more than £25 million on a host of acquisitions and with expectations of doubling the turnover of the business to £40 million this year.

15. Jon Moulton, founder, Better Capital (-12)

Few doubted that having turned his back on Alchemy Partners, the firm he founded, in 2009, Jon Moulton could rebuild a private equity business of scale and influence. In little over a year his new venture, Better Capital, has raised £210 million and completed four deals, including the acquisition of Reader’s Digest UK. Asked for his thoughts on 2010, he replies with typical black humour: ‘I was disappointed that things weren’t worse. Interest rates stayed very low and a great deal of companies that ordinarily would have been in terrible trouble either refinanced or didn’t get into trouble, so relatively few turnarounds came out to reach the friendly arms of people like me.’