LMS succession hinges on First Reserve hire

Energy sector veteran Glenn Payne will replace Robert Rayne as CEO of the LSE-listed firm. Rayne in turn succeeds Jonathan Agnew as chairman.

LMS Capital has chosen First Reserve director Glenn Payne to become its chief executive officer, triggering key senior management changes at the mid-market private equity firm.

“We're laying the foundations for the next generation,” outgoing chief excecutive Robert Rayne told PEO.

In his six years with First Reserve, the 45-year-old Payne focused particularly on deals in the alternative and renewable energy sectors. Before joining First Reserve, he held positions including director of strategy for global gas and electric company Suez Energy.

Based in the UK, Payne will chair LMS’ investment committee and take direct responsibility for daily operations. He will be supported by Pieter Hooft, managing director of UK investments.

Glenn Payne

Effective at the beginning of March, Payne will replace long-time Rayne, who will become the London Stock Exchange-quoted, evergreen firm’s chairman. Rayne, who helped established LMS Capital’s investment activities in the early 1980s as London Merchant Securities, succeeds Jonathan Agnew.

Agnew, who has been chairman of LMS since it spun out of London Merchant Securities in April 2006, “has decided that the appointment of a new chief executive makes it an appropriate time for him to hand over the chairmanship”, according to a statement from the firm. Agnew will retire at LMS’ annual general meeting on 13 May.

The successions were expected by the market for some time as LMS sought a new CEO, according to a client note issued Thursday by an analyst at London-based Liberum Captial.

Rayne told PEO the CEO interview process took about six months. He characterised Payne as very bright and very analytical. In a statement, he said Payne's hire brings the firm “an international perspective, a deep understanding of the investment sector and in depth knowledge of the US and energy space”.

Energy-related investments comprise about 25 percent of LMS' portfolio, with the balance in sectors including media and consumer, applied technology and healthcare. Its portfolio includes companies such as London’s Richoux restaurant group and luxury travel website Luxury Link. Rayne estimated that roughly half of the firm's assets are in the US.

LMS also invests in real estate via Voreda Capital, Brockton Capital and Patson-VNO Holdings, a joint venture with Vornado that pursues development in the San Francisco Bay Area.

In September, LMS hired City grandee David Verey as a non-executive director, roughly a year after he resigned as The Blackstone Group’s UK chairman.

Asked about the firm's current state of health, Rayne said: “We still have cash on the balance sheet and no debt, which we think is the right way to be in this market.”