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The 2012 Power Top 50 ranking from Business XL magazine identifies the most innovative and influential UK entrepreneurs and investors.
We've spoken to some of the best brains in Britain who are fuelling business growth. This year's crop of significant minds includes the best of the venture capital world as well as those investors and entrepreneurs who are proving vital to the continuing success of fast-growth businesses in the UK.
1. Ben Holmes
Partner, Index Ventures (▲4)
When questioned about 2011 at Index Ventures, which saw 15 exits, partner Ben Holmes is more interested in talking about the future.
‘I am very excited about investing in the mobile phone gaming market and I think there will be a Zynga-sized company or bigger built off the back of mobile,’ says the Power Top 50 stalwart, who is a classic car enthusiast in his spare time.
Building on a glittering 2010 in which Holmes saw the exit of Betfair with a placing valuation of £1.4 billion, in 2011 Holmes helped Index Ventures towards a £200 million sale of Lovefilm to Amazon.co.uk and a multi-million pound investment in online music distributor SoundCloud.
Index lists 48 new investments in 2011 targeting sectors all the way from Fashion (ASOS) and mobile (Fon) to online investment services (Funding Circle).
Holmes feels the key to Index Ventures’ success is investing in innovation and cites its role in the $5.1 million (£3 million) round of 3D printing company Shapeways as evidence.
‘When we invested last year [in a 3D printing company] it was still science fiction, but it is rapidly becoming science fact. Venture capitalists must continue to invest in technology.’
2. Robin Klein
Founding partner, The Accelerator Group (=2)
One of venture capital’s best-respected figures, Klein has witnessed the comings and goings of trends in early-stage investment for some three decades. As founding partner of seed investment firm The Accelerator Group and more recently a partner at Index Ventures, he has an uncanny ability to be consistently ahead of the curve, particularly in the technology sector where he makes the lion’s share of his investments.
The past year and a half has been particularly strong for Klein. He estimates that Index Seed, a dedicated pool of capital for seed deals, saw more than 1,000 businesses plans in the period and, of those, the fund made 13 investments, taking the total number in its portfolio to 34. He predicts the strong activity to continue over the next year.
In selecting his investments, Klein says he looks even more closely at companies’ actual achievements than he did a decade ago. ‘I always give high marks to a team which has done a lot with very little, as opposed to someone
who has put together the most beautiful presentation, market studies and then comes and asks for £1 million to do this,’ he says. ‘You want to see that people can actually do something and create something.’
3. Sam Smith
Chief executive, finnCap (=3)
The past year has been a successful one for finnCap prompting the ebullient Smith to claim, ‘We could go two years without a deal and still have cash.’
Revenue was up 66 per cent to £12.9 million for the year ending April, and the company has taken its corporate client count to 91, with an impressive 14 acquired since April. Smith points out the recognition that the small-cap broker received from Morningstar when it was ranked as number one stockbroker on AIM as the standout achievement of the year, not to mention the four companies finnCap helped join the junior market in another quiet
year for IPOs. Looking ahead, she comments, ‘It’s going to be an ultra-competitive next six months but we are in a really good place right now.’
4. Jon Moulton
Managing partner, Better Capital (▲15)
Acerbic and incisive as ever, Moulton is a fixture in this ranking, but slid down our scale from the lofty perch he held in 2009 as we waited to see how his move away from Alchemy Partners and towards ‘better’ investments would work out.
In the two years since its incarnation Better Capital has committed itself to 12 turnaround investments, which Moulton says are all now profitable and have no bank debt. Better Capital recently announced the closing of its second fund, albeit slightly below target levels, but still an achievement in a tough fundraising climate. He’s also this month’s Trailblazer (see pages 14-16).
5. Wol Kolade
Managing partner, ISIS Private Equity (▼1)
With seven new investments, seven exits and five acquisitions for portfolio companies, 2011 was a ‘hilariously busy year for ISIS’ according to Wol Kolade.
In an environment where exits are hard to come by, ISIS made a return of 12 times money on its £12 million acquisition (back in 2006) of cycling retailer Wiggle in a staggering £180 million exit. Of its seven investments, highlights included a £42 million boost to IT infrastructure business Onyx Group and a deal with DiGiCo Europe worth £50 million. ‘Our big initiative in 2011 has been to back businesses with an export capacity as they are much more versatile investments,’ says Kolade.
ISIS finished the year strongly exiting IT services provider Quantix with an IRR of more than 30 per cent to clients of its Baronsmead VCT fund. In fact, the Baronsmead VCTs have been so successful that they’ve recently had to
raise money to replace all the cash they’ve paid out in dividends.
CEO, DFJ Esprit (▲8)
Last year saw ‘a lot of windows open’ for DFJ Esprit, according to Cook. The venture capital firm announced ten exits in total, including the sale of Lovefilm for €300 million (£256.5 million) and call centre company TLC for £55.9 million, the latter securing the venture capital firm a fivefold return. But he admits that activity slowed in the last quarter of the year as the euro crisis deepened. On the investments side, there were 18 new deals, representing a return to form after a ‘cautious’ 2010. DFJ Esprit raised a €100 million fund in that year and Cook says it is only just getting started deploying this capital.
The coming year could also see DFJ Esprit branch out into new territory, with Cook indicating it is looking at launching EIS and VCT products. He believes the government’s decision to extend EIS to companies with as many as 250 employees has brought the two arms of venture investment – angel and VC firms – closer together. ‘Historically the two worlds have existed seperately,’ remarks Cook. ‘From April this could all change.’
7. David Hall
Managing director of private equity, YFM (▼6)
‘Surprisingly resilient’ is how David Hall describes 2011 for YFM, with portfolio values reportedly up around 10 per cent on average across a basket of some 200 businesses.
Investment figures for the year totalled £15 million with exits of £20 million, compared to £15 million for both in 2010. The year’s biggest transaction was a realisation of retailer Go Outdoors, with YFM banking around £7 million through a sale of a third of its stake in the outdoor goods specialist to international investor 3i.
Hall is wary of 2012, however. ‘I have never seen so much uncertainty in people, which leads to caution around boardroom tables and tends to impact investment rates in some businesses,’ he says. ‘Those companies that deal directly with Europe are facing the most uncertainty just now.’
8. Errol Damelin
CEO, Wonga (▲)
Topping the Sunday Times Tech Track 100 list of fastest-growing tech companies, short-term lender Wonga is a formidable expansion story. Since 2006 it has raised more than £100 million in venture capital, starting with a seed round of £3 million from Balderton Capital followed by a torrent of cash from investor luminaries ranging from Oak Investment Partners to TAG and the prolific Robin Klein (number 2).
At the helm is South African-born former investment banker Errol Damelin, who discovered his entrepreneurial drive in Israel but believed the UK offered more opportunities. ‘I wanted to do something on a world scale, and it felt like London was one of the places you could do that,’ he says.
Having decontaminated the image of short-term lending in the UK, he now has eyes on global expansion.
9. Bernard Fairman
Founder, Foresight Group (▲11)
Foresight grew its funds under management by 63 per cent in 2011 (from £260 million in 2010 to £425 million) and finalised 27 exits. Fairman’s personal highlights include the £7.5 million generated from the sale of software company App DNA to Citrix, and securing the international sale of Onyx for £1 million to Indian buyers.
He also oversaw the acquisitions of 33 companies totalling £63 million and cites the purchase of solar energy provider Sunstroom Energy as a key achievement. ‘During 2012 Foresight intends to get a lot closer to our short-term objective of £1 billion assets under management,’ he adds.
10. Vin Murria
CEO, Advanced Computer Software (▲25)
With a forward order book worth £85.2 million and profits up 14 per cent to £10.4 million, AIM-listed Advanced Computer Software appears in rude health. No wonder Murria describes 2011 as a ‘truly remarkable year’.
Though she is also a partner at venture capitalist Elderstreet Investments (chaired by Business XL’s own Michael Jackson), she says ACS has been the main focus for her in the past 12 months. The company, which provides software services to the health, care and commercial sectors, has overseen five acquisitions in three years and in October signed its biggest contract yet: a £17 million deal with Northern Ireland’s health service. Another big deal for the firm was partnering with Vodafone to supply its measuring technology iNurse.
Giving something back is very important to Murria too and she generously donates her ACS salary to help further the educational opportunities of boys and girls in India.
Managing director, Blackrock (▼9)
BlackRock still sits proud as the biggest investor in AIM-quoted companies with July research from sister publication Growth Company Investor showing that its stake in the market rose from £1.24 billion to £1.92 billion on the back of 11 new investments.
In his second year as sole manager for the £450 million Blackrock UK Smaller Companies Fund, Cox continues to favour companies with experienced management teams, with the fund heavily weighted towards the industrials
sector. In the coming year he’ll look to take advantage of the decline in equity markets that has, in his view, left many companies on very attractive valuations. To tick all his boxes, you’ll need robust cash generation, solid historic earnings and a strong balance sheet.
12. Charles Ind
Managing director, Bowmark Capital (▲)
In what he describes as an ‘amazing year’, Ind led Bowmark to two sizeable exits and a raft of new buy-outs and bolt-on acquisitions in 2011. New investments saw security business CSL DualCom and healthcare interest Glenside join Bowmark’s ranks while the firm also made seven new acquisitions for its Leaders Lettings business. Exits came in the form of Advanced Childcare for £28 million, achieving a 4.2 times return on investors’ money, and residential care business Kisimul in a deal worth more than £100 million. Ind sums up, ‘We’ve had a pretty amazing year given the headwinds.’ But it hasn’t been a breeze: Ind says the firm has committed a ‘huge amount of time’ to helping portfolio companies with their growth strategies.
13. Anne Glover
Chief executive, Amadeus (▼7)
It ended ‘a little jittery’, but 2011 was a solid year for Amadeus, says co-founder Anne Glover. The firm secured six notable exits and ended the year spearheading a $25 million investment in Unruly, the online advertising firm responsible for the rollerskating babies of the Evian adverts (see Deal Zone). Glover’s personal highlights include the exit of UK semiconductor company Icera, which was sold for $367 million, and the $85 million sale of Stockholm-based Transmode, the first IPO on the Swedish exchange since 2007.
Outside the office, Glover’s endeavours switched to refurbishing her home and, going into 2012, the house seems to be in order at Amadeus.
14. Alex Macpherson
Managing director, Octopus Investments (▼12)
A high point of 2011 for Octopus Investments was the £32 million exit of intruder alarm concern CSL Dualcom. Managing director Alex Macpherson also oversaw £30 million in new investments last year, an amount consistent with a bustling 2010.
Ever cheerful, keen kitesurfer Macpherson believes it’s a ‘fantastic time’ for entrepreneurs to be building businesses, with a job market ripe for hiring talented staff and building great teams. He adds, ‘We’re seeing a number of our portfolio companies making significant strides despite the economic environment, particularly when they’re doing something innovative in their marketplace.’ Next year, the company will look to invest some £45 million and sees telemedicine, remote diagnostics and patient care as sectors of interest.
15. Patrick Reeve
Managing partner, Albion Ventures (▼10)
Albion Ventures has a new focus on the environmental and healthcare sectors, investing some £25 million in 2011 in projects ranging from renewables to a psychiatric hospital – an investment commitment Reeve says was ‘better than
expected’. One of venture capital’s most eloquent advocates, Reeve enjoys a glass of white burgundy in his spare time and believes that the wider economy will go through some ‘serious hiccups’ this year.
‘There is a possibility of inflation raising its head as a consequence of quantitative easing, so a cautious view is prudent but equally life goes on and we just want to build businesses long term,’ he adds. The firm now runs nine VCTs.