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Looking for new life in old portfolios

The former top management of Granville Baird want Nova Capital Management to help rejuvenate private equity portfolios by breathing new life into underperforming portfolio companies.

A team of corporate financiers, private equity and interim managers has set up Nova Capital Management, a UK-based company that will manage underperforming portfolios run by private equity and venture capital firms across Europe.

 

The company has been set up by Lord Hodgson, former chairman of Granville Baird, David Williamson, former chief executive of Granville Baird, and Michael Kelly, former senior partner of Executive Interim Management.

 

Unlike secondary players, Nova will acquire the fund management companies rather than the fund itself, although future alliances with secondary firms are likely as the market widens for such transactions.

 

Last week the firm announced its first deal, which will see Nova take over the management of Lica Development Capital a £70m portfolio of investments, covering early or mid-stage investments in 20 UK companies. The portfolio includes the publishing company Duckworth, publisher of Beryl Bainbridge’s work for 20 years, and Planet Ice, Europe’s leading ice-rink operator.

 

According to Williamson, who is joint managing director of Nova alongside Michael Kelly, Nova will develop recovery business plans for under-performing companies in the portfolio, placing senior interim managers in key roles within these companies. It will then develop exit strategies for the businesses as their performance improves.

 

“As market conditions have deteriorated, many firms have found it difficult to realise the value of their investments,” said Williamson. “Many hold under-performing companies within their portfolios but lack the business skills to turn their performance around. We will focus on improving the performance and exit value of the companies in a portfolio.”

 

Nova’s senior management are funding the firm’s acquisitions, which includes a deal to take over the management of two UK-based technology funds early in the New Year. The firm has also reached agreement with an unnamed bank which will see Nova take over the management of one of its troubled portfolios.