Equistone: Diversity within PE
Diversity in the Private Equity industry
Georgie Banfield spoke to Richard Briault, Tristan Manuel and Bella Boman-Flavell from Equistone to discuss getting into private equity, working culture and the importance of diversity, both within the firm and across the wider industry.
Firstly, please tell me more about yourselves and your experiences prior to moving to Equistone.
Bella: I moved to the UK from Australia when I was 18 and studied Philosophy, Politics and Economics at the University of York. I was strongest at Economics and particularly interested in monetary policy and how the Bank of England could affect the real economy via the banking system - quantitative easing was a hot topic back then too! Finance felt like a logical career move so I joined RBS’s Corporate Banking grad programme in 2013 following a summer internship. It was a rotational programme and, after spending time in leveraged finance, I joined there permanently. Over five years I completed a large number of PE-backed transactions across all sectors and mainly in the UK mid-market, before moving to Equistone in 2019. I moved from the debt side to PE because I really enjoyed meeting management teams, analysing businesses and lending money but was keen to see the upside as well as the downside and work more closely with management teams in driving value creation.
Tristan: I studied Genetics at University. I was always interested in science and if I'm honest I didn’t know a lot about PE. But after realising I didn’t want to work in research, the ACA appealed to me as a good all-round qualification that provided a grounding in economics, finance and accountancy and drew on the analytical skills from my degree. I gained an internship at KPMG and started in the Private Equity Group in Transaction Services. I really enjoyed working with PE clients and was interested in how they diligenced businesses, both from a market and financial perspective, and then formulated plans with management teams to help them grow. It looked difficult to move straight into PE without experience in M&A, valuations or detailed modelling, so I joined Nomura, where I gained some of the bulge bracket experience that put me on that career path.
Richard: I started my career on the graduate programme at DC Advisory, a mid-market corporate finance advisor, where I worked for seven years before moving to help build the European M&A team at Duff & Phelps, focusing largely on the travel and consumer sectors at both firms. My move to PE was driven by the desire to spend more time with businesses than the 3-6 months you spend with management teams around a transaction, and I joined Equistone in 2016. I probably made the move later in my career than the typical Associate level, having spent almost 10 years in corporate finance, largely because I enjoyed the deal environment and teams I worked with.
You all came from relatively different professional backgrounds, but what made you all ultimately choose Equistone?
Bella: I knew the UK mid-market was my preferred area and that Equistone had a long and positive track record in that space. I liked Equistone’s business model of diversification across European geographies and sectors and, since I didn’t have a particular sector specialism, I was keen to maintain a generalist perspective. Having said all that, the people you work with are so important – everyone is so down to earth and that’s the environment I wanted to work in. An open, respectful and friendly culture was important to me and people came across well in interviews, which was all backed up by their reputation in the market.
When these will be the people you work with for the majority of your waking day, it’s important to get it right.
Tristan: Agreed – Equistone has a good reputation amongst advisors and management teams, and is a great brand, but really, it’s the people. What resonated with me was how everyone interacted with each other in the interview, the way they asked their questions and how they responded if they disagreed. I wanted to be thoughtful in my decision-making so I took references from people who knew the team too. When these will be the people you work with for the majority of your waking day, it’s important to get it right.
Richard: I wanted to work at a firm where I could leverage my travel and consumer network and Equistone are a blue-chip investor with a strong track record in the sector, having made successful investments in the likes of Audley, Travel Counsellors, Kurt Geiger and Hobbs. I’d also worked with Equistone as an adviser and liked the people and culture – they are very open and transparent, which was really important to me.
Is there an "ideal candidate" for private equity generally and Equistone more specifically?
Bella: Collective decision-making is improved by having individuals with diverse backgrounds, so it’s important that no one conforms to a specific mould. Equistone has historically hired people from PE, M&A, accountancy and banking, but we’re keen to consider candidates from wider professional backgrounds such as strategy consulting too. However, there are certain skills and attributes that people typically look for: numeracy, communication (both oral and written), familiarity with analysing financial statements, as well as softer skills like emotional intelligence and independence of thought.
Collective decision-making is improved by having individuals with diverse backgrounds, so it’s important that no one conforms to a specific mould.
Tristan: There isn’t a single “ideal” Equistone candidate. First and foremost, like lots of PE firms, we are looking for people who fit culturally; we hire people for the long term, so it is key that we all get on.
Historically we have hired slightly more experienced people who can hit the ground running. We are not a large business with a big graduate training programme. We look to hire people with 5 to 8 years’ experience who know what to do with the information we need to analyse and are confident in financial modelling, for example. That said, increasingly we are open to a wider range of experience levels.
Richard: A huge part of the job is working with the management teams of the companies we invest in, which requires the softer skills Bella described. Being approachable is important, as is proactivity. This is also relevant from a deal origination perspective because we are all expected to build our own networks to source opportunities. We are looking for colleagues who are eager to get out and meet people and grow relationships off their own back.
What is the culture like at Equistone?
Tristan: Culture is difficult to define but part of ours comes from the genesis of Equistone. It was a spin-out from Barclays Capital, where all members of the team became partners in the business. That open, collegial ethos flows into how we interact with each other, how we treat each other and how we make investment decisions. Our triaging process for new deals involves the entire team providing questions and feedback on an investment paper, which speaks to the trust placed in each team member’s opinion. It’s also a great forum to learn from where senior partners identify issues or areas for further investigation that you may not have considered. People always talk about flat structures and this really is flat.
That open, collegial ethos flows into how we interact with each other, how we treat each other and how we make investment decisions.
Richard: The history of Equistone influences the culture in a number of ways. The structure of the firm, with local teams across five countries, has helped develop a collaborative, consensual approach to decision-making. This encourages us, both individually and collectively, to approach challenges from different perspectives and ways of thinking. There is a lot of value placed on openness and transparency, and ensuring we reflect this internally and with external stakeholders, whether that be management teams, advisors, LPs, etc.
What is your day-to-day, and how do you feel your background complements your role?
Bella: That can vary depending on whether you’re in the midst of a deal or not! When not busy on an advanced deal, it can involve catching up with advisers and other market participants, reviewing IMs, meeting management teams, speaking to portfolio companies and attending board meetings and wider strategy sessions. In the middle of a deal I’ll be developing and refining an investment thesis, scoping and overseeing due diligence, writing investment papers, negotiating the structure with vendors, management teams and lenders and building relationships with a management team.
There is a lot of value placed on openness and transparency, and ensuring we reflect this internally and with external stakeholders, whether that be management teams, advisors, LPs, etc.
While I came from a debt background and PE typically hires people from M&A, reviewing IMs and due diligence, writing papers and making investment decisions was a key part of my previous role. I also bring an understanding of how a lender might look at a situation and I'm familiar with reviewing debt documentation and negotiating with lenders. The next step in PE is developing your own investment thesis and scoping due diligence to verify it. Taking board seats, inputting into the strategy of businesses and working with a management team to drive value creation was also a new and exciting part of the role.
PE is far less task-driven than banking: you’ve got to be more proactive in building your network, in thinking about key issues and refining the investment thesis when working on a deal and in driving value creation once you’re working with a portfolio company. It’s an ideas-driven job.
Richard: I completely agree with Bella that there is no standard day in PE. This is not dissimilar in some respects to life in mid-market M&A, in particular the time spent speaking to advisors and executives in the sectors we cover and certain aspects of deal-related work. The biggest difference on a day-to-day basis is the time we spend with our portfolio company management teams, which I’ve found to be a highly engaging and rewarding experience.
What do we mean by diversity, and why is it important – both at Equistone and in the wider private equity world?
Bella: It comes down to diversity of thought and experience. Greater diversity in terms of race, ethnicity, gender, socioeconomic background and age is a key contributor to less uniform thinking. Evidence shows that diversity drives better collective decision-making, which is fundamental to good long-term investing. We also want to belong to an industry which reflects, engages with and positively contributes to the society it operates in. Having colleagues from a broad cross-section of society helps us move towards achieving that aim.
Evidence shows that diversity drives better collective decision-making, which is fundamental to good long-term investing.
Tristan: We’d be less effective if we all thought about deals the same way. You are encouraged to speak your mind and to provide input into different investment opportunities, so diversity of thought is crucial. That stems from our backgrounds – both professional, but also personal.
Richard: Based on anecdotal evidence – networking events, press coverage, flicking through the team pages of other PE funds – more progress is certainly needed in terms of diversity. This is as true at Equistone as others. PE is an industry with relatively low churn, so it will likely take time to change.
We’d be less effective if we all thought about deals the same way...so diversity of thought is crucial.
Bella: Looking across the industry, there is certainly a significant distance to go still. It’s not an easy issue to solve. Most people believe that those with the best aptitude for investing should get entry-level roles in PE, but equality of opportunity should translate into a degree of equality of outcome and an obviously diverse industry, which PE is not. That may partly be a function of a lack of diversity in the pools from which PE typically recruits, but positively the industry is focusing on the issue as well. We are all looking at our recruitment practices and wider issues, such as access to internships and mentors, education and inclusivity, to identify invisible blockers and remove those where we can. Hopefully with time this will drive more diverse outcomes, but it definitely needs continued attention and a collective effort.