The next generation game

Tom Wright enters the Albemarle Gallery in London’s Mayfair on a clear evening in October to meet some of the up-and-coming dealmakers and venture capitalists who will help shape the future of private equity. Fittingly, this ‘Next Generation’ party (thrown by law firm Edwards Wildman) takes place amidst an exhibition called ‘Destinies’, a collection of portraits of young people.

Wright is a 30-year-old manager at Better Capital, the private equity turnaround specialist. He has worked on a number of take-privates, including City Link, an unprofitable parcel courier that Better acquired in 2013 for £1.

Many of the young dealmakers in the gallery started their careers during the worst financial crisis since the 1930s. Even as funding sources dried up, the industry was going through a time of intense political scrutiny, branded in some quarters as ‘locusts’ and targeted by regulators desperate to avoid a repeat of past mistakes.

These young dealmakers are well aware of the challenges they face – and also the opportunities ahead as the economy improves.

Clearly they care about making money, after a number of difficult years. They’re well aware that the industry has changed; that the proposition for new entrants is no longer what it was in the good old days. But they say that private equity firms are still renowned in business schools for the rewards they offer via salary and carried interest. And they see plenty of opportunity in an era when many companies are still struggling to access capital. For instance, they’re excited about investing in the new frontier of digital business, as the internet and mobile phone applications provide access to billions of new consumers across both developing and developed countries.

Yet many of the new dealmakers are also quick to express an ethical motivation. Some say they’re driven to create positive change, both at their portfolio companies and in the wider world. And they want to be more open and less secretive. At the very least, many believe that it’s important to be seen to be responsible investors in the wake of the crisis.


The idea of private equity as asset-strippers first entered the public consciousness in the 1980s, when KKR’s takeover battle for RJR Nabisco inspired the book ‘Barbarians at the Gate’ – a high-stakes corporate struggle that revealed little thought for the concerns of customers or employees.

Don’t get Wright wrong. He’s highly motivated to make money. He just doesn’t want to get rich at any cost.

“I want to be able to sleep at night, and if I felt like I’d been screwing people over then it wouldn’t really be worth it,” Wright tells PEI at the Next Generation party. “We like to think we aren’t doing asset stripping; [that] we are going to do things that in the long run will create jobs.”

Wright’s words are in stark contrast to some of the sentiments previously expressed by his boss, Better founder Jon Moulton. The veteran dealmaker – and inveterate controversialist – has said more than once that “insensitivity” is one of the qualities that helps him sleep at night.

The son of a vicar and a teacher and one of five children, Wright says he wasn’t born into wealth. He attended a private school thanks to a bursary, where he mixed with children from more affluent families. “There wasn’t loads of money going around,” Wright says of his childhood. “I was getting picked up in a battered old car. I thought: I don’t want to do that when I am older.”

He went on to study economics and finance at Bristol University, working one summer at Morgan Stanley. “It’s pretty basic schoolboy thinking: ‘I want to make money, [so] I’ll do economics’.” After graduating in 2005, he qualified as an accountant at PwC; he moved into transaction services in 2010, where he worked with private equity firms like Lion Capital and Doughty Hanson, before joining Better in 2011.

Inside the gallery, Wright is once again amongst a well-heeled crowd. One of the portraits, by artist Louis Boudreault, is on sale for £38,000. Smartly dressed women and men – hailing from Beijing to Boston – eat canapés and sip drinks as they swap tales of how they ended up working in private equity in London.

As Wright talks, Ed Kingsbury listens attentively. Kingsbury is the general counsel of Wheb Partners, which invests primarily in cleantech companies. He insists private equity is about more than making money and that many young dealmakers want their investments to positively impact the world.

“They are in this business because it is a vehicle to utilise capital for specific aims, like tackling climate change, sustainability or medical and biotech development,” Kingsbury says.

Some firms have mission statements that young employees say they find appealing. Take the Business Growth Fund, which was created after the financial crisis by the UK’s biggest banks to invest in small and medium-sized companies.

“Compensation is an element of how you measure success,” says Rodney Appiah, 29, who joined the fund from Merrill Lynch. “When you join an organisation like [the BGF], you need a wider objective. I genuinely believe in what we are trying to do here.”

This interest in business ethics shown by the likes of Appiah, Kingsbury and Wright suggests that Sir Ronald Cohen, another veteran private equity dealmaker, had a point when he said last year that the younger generation “wants to make a difference”.

In the eyes of many of these young practitioners, the future success of the private equity and venture capital industry rides not just on their ability to maximise financial returns – it’s also about the social and environmental impact of their investments too.