In the week news emerged that Close Brothers Corporate Finance had lost Mark Barrow, head of its private equity advisory arm, to Dresdner Kleinwort, PrivateEquityOnline finds new head Darren Redmayne keen to stress that it is onwards and upwards for the mid-market specialist…
PEO: This isn’t your first involvement with the private equity advisory team, is it?
DR: No. When I came back from my secondment with Harris Williams [Close’s strategic partner in the US] in 2004 we were looking at ways to build our business in private equity advisory. So I got together with Mark, and together we built the team.
PEO: How are you feeling about being in charge?
DR: It’s obviously an upward movement for me and also an exciting one – to be part of the team again that I founded and worked in with Mark, and now to be leading it as well.
PEO: Can we expect to see any significant changes in style or approach?
DR: Nothing dramatic. I think this business has been a great success, so we’ll continue doing everything we were doing before. It should be a fairly seamless transition – there’s nothing to be done organisationally, because the model has worked very well.
But of course anyone who leads a team wants to put their mark on it and impose their own style. So I’m already thinking about ways in which we can take our effort even further forward within the private equity community.
PEO: Anything specific in mind?
DR: Well, I’ve just come back from a secondment with the Pensions Regulator, where I saw a lot of deals fall over because of pension issues, and worked on ways to deal with this problem when buying and selling companies. So hopefully I can bring that experience to bear.
Then there’s the overlap with Harris Williams in the US [Redmayne spent two years on secondment there between 2002 and 2004, and now manages the relationship on behalf of Close]. They’re one of the leading US private equity-oriented firms, and that gives us great visibility into private equity trends in the US – which is helpful because these trends eventually tend to percolate over here. For example, when I was in the US, secondary and tertiary buyouts were commonplace, but almost unheard of here. Now we’re even seeing quaternary buyouts over here. The relationship gives us knowledge and understanding of the world’s largest private equity market – which we can then bring to our European clients.
But probably the area I’m giving most thought is transaction origination: how we can play more of role in the origination process, especially with non-auction deals.
PEO: Where do you think the room for improvement is there?
DR: I think it’s more a question of an opportunity to get better. Mark did a great job, and it’s about taking us on to the next point.
Private equity firms are very skilled at digging up opportunities, but that takes time – it means a lot of phone calls to chief executives, and a lot of shoe leather. We feel we can play a greater role in finding off-market transactions that will suit a particular type of group.
That means working very collaboratively with our sector and product teams to find interesting transactions that are particularly relevant to our private equity clients – to act almost as an outsourced origination team, rather than just bringing them book after book of things we’re selling.
For example, we might come across a very interesting buyout opportunity at a family-owned business, where for some reason the vendor doesn’t want to run an auction process – it’s rare these days, but it does happen. And then we’d think very carefully about the right private equity partner for the deal, and use our experience to work out who would be the best buyer.
PEO: So what do you see as your competitive strengths in this section of the market?
DR: We’re very strong at selling business, in particular. There’s great breadth to our advisory offering, which means we can help private equity in so many places – with M&A, on the debt advisory side, with preparing for IPOs, and with potential pensions issues. Plus we’re an independent offering, so we can advise on best-of-breed solutions in all these areas. And given the kind of deal size we work on, we have a true European and international reach through our network. I think our US presence via Harris Williams is particularly helpful, especially when selling businesses.