Good Things Come in Small Packages

June 2022 –  Robert Radcliffe-Smith

Private Equity is now the leading alternative asset class having grown ~80% over the last 10 years globally. The fact that Private Equity has consistently produced outsized returns might have something to do with that. Our track record of creating value for stakeholders can be traced back to our governance model.

Public Boards vs Private Equity Boards

In contrast to public boards, which are compliance-centric and typically large in size, private equity-backed companies have smaller boards, usually with no sub-committees. This allows for alignment in interest to be quickly established, especially since all directors on the board have significant economic ownership, so that value-enhancing strategies can be executed upon efficiently. Additionally, private equity boards will come armed with the in-depth due diligence completed prior to their investment, and thus are able to use this knowledge to guide the strategy of the business moving forward.

The Advent Partners Board

At Advent, our boards are generally comprised of 3 to 5 individuals. There’s ample research that shows smaller boards get better returns. This isn’t surprising – trying to get a group of people to agree on anything can be difficult and time consuming. Small boards spend less time in discussions to reach a compromise, and with less to manage, coordinate and facilitate, the board is able to make faster decisions. We believe that all representatives (including Advent’s) should be empowered to make decisions at the board meetings, rather than referring them to board committees or third party decision makers.

Our Board Meetings

Our boards tend to run like small working groups. Rather than relying on quarterly or monthly meetings, we like to engage more regularly with management to pursue a candid and continuous dialogue. We believe that this makes it easier for everyone on the board to share ideas – our motto at Advent is that ‘the best idea wins’. By creating an environment that encourages people to participate in the collective vetting process, ideas that are not going to work are thrown out quickly so that resources can be diverted into the good ones that will. Additionally, this provides an environment that enables the Board to dedicate more time to tackle real issues in greater detail. Our investment horizon of 3 to 5 years provides a healthy urgency, but also enables us to make decisions that create value over a longer timeframe, to the exclusion of short-termism.

Getting things done is an important part of Advent’s creed.  The largest board I have been on had eight members, many of whom felt it was their duty to say something (indeed, anything!).  After six months, we found that there was a loss of momentum and some poor decisions, so resized the board to five members.  The business prospered after that.

Good governance is key to a company’s ability to create sustainable growth and value. A small board is more nimble and are better positioned to get the cut through to achieve key milestones efficiently and effectively.

Read More

https://vimeo.com/738116433 Transcript What I really liked was that Advent essentially backs the management team to run the business. The pace of change of growth certainly accelerated, and they provided the people and tools to help us during that growth. We…

Experience working with Advent Partners https://vimeo.com/705966989 Transcript Advent helped set the business up for success through aligning objectives and goals with the management team. Structure was introduced to our decision-making process and reporting processes. We created and implemented our business…

June 2022 –  Robert Radcliffe-SmithPrivate Equity is now the leading alternative asset class having grown ~80% over the last 10 years globally. The fact that Private Equity has consistently produced outsized returns might have something to do with that. Our…

May 2022 – Symon Vegter Much has been written and said about the challenges and issues that boards, shareholders and management teams working together face when growing an organisation. We believe that private equity has solved many of these problems with…

Silk Laser Clinics Overview ​ https://vimeo.com/705640707 Transcript My name is Martin Perelman, and I'm the founder and CEO of SILK Laser Clinics. SILK Laser Clinics is a growing chain of cosmetic clinics, offering a range of services that make you…

April 2022 – Brad Lynch Having partnered with founder-led businesses for over 35 years now, we think we have seen most things, but still get surprised on occasions!  We have invested across different economic cycles and navigated various opportunities and…

29 March 2022 Advent Partners is pleased to announce that its new fund, Advent Partners 3, has invested in Integrated Control Technology (“ICT”), a global provider of intelligent electronic access control and security products for commercial properties and critical infrastructure.…

January 2022 Private Equity Industry’s First-Ever ESG Data Convergence Project Announces Milestone Commitment of Over 100 LPs and GPs We are proud to announce that Advent Partners is the first Australian private equity investor (GP) to commit to the Private…

November 2021 Brad Lynch (Advent) & Martin Perelman (SILK CEO) joined David Chambers (AIC) and Stuart Dettman (Rothschild & Co) to discuss SILK's journey from receiving growth capital via private equity to accelerate its network expansion plans, to listing on…

7 November 2021 EDMOND, Okla. — Petra Industries, the consumer technology authority and wholesale electronics distributor, is pleased to announce their partnership with Mandoe Media to distribute their digital signage media players. Founded in 2010 by Steve Baxter, Mandoe Media is…