Sara Yates - 30% IRR From A Process I Call 'The Apprentice On Steroids'

Grow My Business Or Sell It

My guest today is a chartered financial analyst who is active in two spheres, property and private equity. She’s a regular writer on property matters for the London Evening Standard and views her own property investment activities as her 'guilty pleasure'.
But in our interview I focus on her other role as chair of the Portfolio Advisory Board at Novastone Capital in Switzerland. The group acts a private equity search fund to find, support and invest in CEOs of companies in the £10- £30 million range. The process is unique in my experience and listeners to Grow My Business or Sell It can definitely learn from it and may even want to take part in it!

Sara explains her background in the City where she was global head of FX strategy for JP Morgan and how she ended up in the rile at Novastone.

She gives an overview of how the search fund process works, bringing together three main parties - Baby Boomer business owners who are looking for an exit but are lacking any succession plans, potential acquirors of their business and well heeled family offices to fund the acquisition.

Sara describes the profile of the ideal searcher or CEO that she looks for and describes just how tough the selection process is – 800 applicants for each place!

We discuss the ideal profile of business they are looking to acquire and the range of geographies, sectors, size, revenue and EBITDA in the current pipeline.

Sara explains how the search stage of the process funded and what’s in it for the family offices who fund the search.

We then discuss the due diligence process that the team goes through before making a commitment to an acquisition and how negotiations on price are handled.

Sara also explains how acquisitions are funded between equity and debt and how the Searcher/CEO is rewarded at the acquisition stage and on through to the planned exit.

I ask Sara if there could be conflicting objectives between the family office investors looking for a fast growth and a clearly defined exit versus the acquiring CEO who might want to build a long term multi generational business for his family?

We look at whether there is a limiting factor – the right calibre CEO, the right profile of target company or the availability of investor capital?

Finally I ask if there is a way that investors outside this exclusive group can gain access to the companies that are acquired without needing to have such deep pockets?

Interested in becoming a searcher or selling your business through this programme? Just email me on [e-mail] and I will connect you directly to Sara.

If you would like to appear on Grown My Business Or Sell It, or would like Graham Rowan to appear on your podcast, please email Graham on [e-mail]
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