My role involves investing in SMEs and ambitious private and listed companies who need capital from a long-term equity provider to grow. I lead the Aberdeen office of BGF, which has invested £130m in 14 businesses in the region since 2012, many of which, though not all, are in the oil and gas sector. We work with their management teams to help them maximise their potential, covering not just Aberdeen, but a region that also includes Dundee, Inverness and as far north as the Shetlands.
I’ve always had a specialism in energy. I worked for Shell as a Drilling Engineer, mostly in offshore exploration in Angola and Congo. I really enjoyed it but realised I was more interested in the business side of the industry, and so, after studying for an MBA at INSEAD in France, I went to work for private equity firm 3i, where I used my background to become an investor in the oil and gas sector. After joining 3i in England, I moved with my wife and family to work for the company in Aberdeen and it has been home ever since – with two of my children born in England and two in Scotland. I joined BGF in January 2012, at a time when it had only made a handful of investments.
I have been investing in private businesses for nearly 20 years and I consider myself an investor first and an oil and gas specialist second. The end market for a company we look at may be oil and gas, requiring specialist market knowledge, but the companies that BGF invests in could be software companies, logistics companies or rental companies, and there is great benefit to be gleaned from the broad experience we have across the UK.
BGF is a minority investor, so we don’t buy or take control of businesses. The management teams we back have in-depth knowledge of their markets – we’re here to provide the funding and support to help them.
An expectation of our role is that companies come to BGF with funding propositions, but the opposite is generally true. We spend a lot of time getting out and about and meeting companies. We get in touch via their advisers, our shareholder banks, or by ringing them up, and a typical day will often see me visiting a new company with a colleague.
Many private business owners have the perception that there are only two choices for funding – using bank debt or private equity – and so we spend a lot of time getting to know the ambitious businesses in our region, so they are aware of the availability of long-term minority equity investment from BGF. We try to understand not the just what the business does and its potential, but also the purpose and people behind it. Every business has a great story.
The investment process is a bit like a courtship – while the investment is not quite for life, it is a long-term partnership. We’re getting to know a business and whether it would make a good investment, with a strong proposition and an exciting growth plan. The company owner is working out whether she/he is prepared to entrust a share of their company to BGF, whether they can work with us for many years and whether we can add value to their business. One of our more recent investments, for example, took five years from the first meeting to build that trust before we invested.
When we are in an investment process, it can become all-consuming, both doing due diligence and negotiating the legal documents, which set the ground rules for our future relationship. If we get the relationship right these will go in the drawer at completion and not have to come out for a long time.
As part of our investment, we often make introductions to non-executive directors or a chair from BGF’s extensive Talent Network to support the strategic direction and help grow the business, normally someone with relevant sector expertise. We have more than 5,000 highly-experienced connections in our in-house network, many of whom have started, grown and sold their own successful companies. We have a track record of introducing people who can really help our businesses.
I’m on the board of five companies as Investor Director - SPEX, ROVOP, Entier, Inoapps, and Frontrow Energy Technology Group - so in a typical day I could be at a board meeting for any one of those companies. That will involve reviewing the board papers and maybe speaking to some of the other board members in advance. At those meetings we talk through business performance and the big upcoming decisions they have to make.
It is a privilege to be in that position. As well as getting the chance to make an impact for the companies, it is also a learning experience where I get to see how these companies operate. One of the great things about the job compared to being, say a consultant on a project, is that each investment is a long-term relationship. We might be with them for ten years, so we go through the ups and downs together and we see the companies develop. That’s personally very rewarding.
It is a fantastic job, I get to work with great people and exciting companies. It is also fun because at BGF we work with the entrepreneurs who have founded their companies and are passionate about their purpose, and by definition, they do not fit the normal corporate mould. I love that element of the BGF role. Our purpose is to help companies grow, develop and scale up, and it is very rewarding to see a business and its founders and entrepreneurs achieve success.
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