REFLECTIONS - LDC

REFLECTIONSWINTER 2012DAVID HORNELDC HISTORY FACTSINVESTMENT REVIEWEXIT REVIEWPORTFOLIO REVIEWTOP TABLEREFLECTIONS IN THE REGIONSFOCUS ON SECTORSLDC IN THE COMMUNITYWWW.LDC.CO.UK

INTRODUCTIONUNRELENTINGOPTIMISMDARRYL EALESCHIEF EXECUTIVE LDCWelcome tothe 2012 yearend edition ofReflectionsCONTENTSDAVID HORNE 04LDC HISTORY FACTS 05INVESTMENT REVIEW 06EXIT REVIEW 08PORTFOLIO REVIEW 10TOP TABLE 12REFLECTIONS IN THE REGIONS 16FOCUS ON SECTORS 20LDC IN THE COMMUNITY 22When writing this time last year, the prevailingview across LDC’s portfolio was that the blanketnegativity surrounding the UK economy wassignificantly overdone. Indeed, many ChiefExecutives remained quietly confident, whilstalso being acutely aware of the fragility of theoperating environment and, in particular, the lackof confidence in the financial sector.As we move into 2013, the picture appearsto be much the same and I think maybe bestcharacterised by “what you see now is what youare going to get”.Nevertheless, in my view, across UK business thereare many more success stories than failures. Oneof the real challenges is the positive promotionof these successes so as to penetrate the veilof gloom which seems to pervade most mediachannels. This is both a real challenge andopportunity for business leaders.The resilient performance across the breadth ofLDC’s portfolio companies provides a bird’s eyeview of how to maintain success through adversity.Amongst many factors, two stand out to me thatunderpin this:2REFLECTIONS

INTRODUCTIONmuch of the business and financialworld at present. On the other hand,risk management is about the proactiveunderstanding of risk and achievingcommensurate reward.LDC has tried to develop a lower risk:higher reward business model that deliverssustainable successful performance, whichis predicated on a simple investmentphilosophy – supporting outstandingmanagement teams. This method is thenenhanced through our strong regionalnetwork, investing through the economiccycle, being sector agnostic and sectorexperienced, and, finally, maintainingportfolio balance by having a broadinvestment range.The approach has delivered strongperformance over the past decade andshould mean that LDC will deliver recordprofitability in 2012.At the time of writing, we have investedaround £250m in 16 companies, withefficiencies, contributes to creatinglong term shareholder value whilst alsodemonstrating the positive role thatprivate equity plays, week in week out insupporting the UK economy. In aggregate,the LDC portfolio employs over 30,000people and has a combined turnover ofmore than £3bn.This is a theme that is reinforced in ourvirtual round table debate on kick-startingUK growth – pages 12-14. This takes alook at how innovation and creativity canhelp stimulate recovery in the UK. I amprobably biased or betraying my Midlandsroutes but I think a renewed focus onmaking things might be a good start!Finally, the centrality of our regionalnetwork, embedded in the articles inthe following pages, highlights a uniquefeature of LDC’s operating model. Beingat the heart of regional professionalcommunities and on the doorsteps ofthe companies we support is part of ourthis approach has seen us invest around £250m of equity in 16 companies -businesses with robust models and resilient propositionsour portfolio now employs over 30,000 peopleand generates turnover of more than £3bn• An innovative and relentless approachto driving top line, whether through newproducts, new markets or acquisitionsand maintaining confidence in organicinvestment.• The incredible depths of commitmentand positive leadership which bindsbusinesses together in difficult times andensures there is a common cause sharedacross entire organisations.This positive outlook sets the context forour latest collection of success storieswhich are evident throughout this editionof Reflections. Stated most simply it is“performance through passion”.LDC tries to embrace this approach.In investment terms, there is a criticaldistinction between risk avoidance andrisk management. Too often, these termsare used loosely or, more worryingly,interchangeably. Risk avoidance means donothing – unfortunately, this characterisesthe North West and the Midlands beingparticularly active. Importantly, thepipeline is healthy, auguring well for botha strong finish to 2012 and a fast start to2013. Over the past five years, our totalinvestment now exceeds £1.5bn andpages 6 and 7 describe this in more detail.I am particularly delighted that we havebeen able to support growth by acquisitionof more than 20 portfolio companies overthe past three years.We have a calibre of management teamswhich remains confident and externallyfocussed in the toughest of operatingconditions. One such example is A-Gas(page 11) which has completed fouracquisitions since we backed the team justtwo years ago – two in Australia and twoin America.Our role in supporting managementteams to drive growth through strategicacquisitions, opening up new internationalmarkets and delivering operationalDNA and I firmly believe that this is a keyingredient of our success.I hope you enjoy reading this edition ofReflections. Most importantly, I hope itsparks a few new ideas and encouragesyou to share your successes with others.We all write our own history every day –this is what makes working at LDCsuch a privilege.CHIEF EXECUTIVE LDCWINTER 2012 3

DAVID HORNEDavid Horne wasone of the originalarchitects of LDC,becoming its firstchairman when itwas founded in 1981.Thirty years on, wemet David to reflecton the originalrationale forcreating a privateequity unit...SPECIAL INTERVIEWDAVID HORNECHAIRMAN OF LDC 1981-1992It’s particularly good to see how LDC has stuck to theold principles of backing good management TEAMS“I first started with the bank in the late1970s. Norman Jones was chief executive,but it was his deputy, Fred Crawley CBE,who I first talked to about forming adevelopment capital operation.“I’d been a great believer in the futureof development capital, having done alittle previously, although no doubt veryexperimental and amateurish in thosedays. We did a contested managementbuyout of a quoted company, but I hadmanagement on my side and we won.“The main thing is if you back good peopleand then they’ve got an equity interest,they’re going to take a really keen interestin the success of that company. I justhappened to believe that this was a goodway of going about it and filled what wasthen a fairly big gap in the market. Youhad ICFC (now 3i) - and one or two others- but not much else around to deal withthese situations. All the big clearing banksowned 3i so in effect we were setting up incompetition to them.“Fred backed it and it went throughwith a lot of support from the generalmanagement of Lloyds Bank.“It was set up within the merchant bankingside under the name of Pegasus. Fred usedto travel with a friend from British Airways,who thought BA might join Lloyds hencethe name – a flying horse!“The first to run the operation was BobHamilton, then Ron Hollidge a few yearslater. It was Ron who recruited MichaelJoseph and then Darryl Eales, and itstarted building up from there.“It was based in Queen Victoria Storiginally, then later Chiswell St – thenBirmingham opened, then Leeds. Theregions were always important.“Most of the new deals came throughassistance from branches. I went out toevery region with the regional generalmanager and gave talks, to them and theircustomers.“When you talk now about investing£2bn over the next five years, that’s a lotof money but this has only been providedbecause of the success of LDC. It’s easyto spend money of course, it’s investingit wisely that has always been a little bittricky. But it’s only particularly risky if youonly do one deal.“It’s interesting to see how everything hasgone in the last 30 years, against such aturbulent time. It’s particularly good to seehow LDC has stuck to the old principles ofbacking good management teams. Thatwas always the point.“Looking back, I don’t think I had any lowmoments with LDC. I had some anxietieswhen some of the investments were goingsour but we also had successes. It may notbe simple to achieve success, but when youdo, it’s wonderful.”4REFLECTIONS

Key Facts 1981 -20121981 PEGASUS HOLDINGS FORMED IN LONDON LED BY BOB HAMILTON1981 FIRST EVER SPACE SHUTTLE LAUNCH1982 FIRST FOUR INVESTMENTS COMPLETED1983 PEOPLES LIMITED IS LDC’S FIRST £1M INVESTMENT1985 FIRST MOBILE PHONE CALL MADE AND LIVE AID CONCERT1985 RON HOLLIDGE APPOINTED FIRST MANAGING DIRECTOR1985 INVESTED OVER £5M IN A YEAR FOR THE FIRST TIME1986 EVANS HEALTHCARE IS LDC’S FIRST £2M INVESTMENTOCTOBER 1987 BLACK MONDAY STOCK MARKET CRASH1987 BIRMINGHAM OFFICE OPENSNOVEMBER 1989 THE FALL OF THE BERLIN WALL AND TIM BERNERS-LEE INVENTS WWW1988 100 INVESTMENTS COMPLETED, OVER £72M INVESTED1989 LEEDS OFFICE OPENS1990 INVESTMENT EXCEEDS £30M FOR THE YEAR1991 LDC reaches 150 investments completedAUGUST 1991 FIRST EVER WEB PAGE GOES ONLINE1992 INVESTMENTS FALL BELOW £10M IN DIFFICULT YEARJANUARY 1993 BILL CLINTON ELECTED US PRESIDENTFEBRUARY 1995 CHANNEL TUNNEL OPENS1995 MICHAEL JOSEPH APPOINTED MANAGING DIRECTOR1996 200 investments completedMAY 1997TONY BLAIR ELECTED1997 READING AND NOTTINGHAM OFFICES OPENJANUARY 1999 WORLD POPULATION EXCEEDS 6 BILLION1999 250 investments completed2000 MANCHESTER OFFICE OPENS2000 LDC INVESTS OVER £50M FOR FIRST TIMESEPTEMBER 2001 WORLD TRADE CENTRE ATTACKS2001 LDC INVESTS OVER £100M FOR THE FIRST TIME2002 LDC completes its 300th investmentNOVEMBER 2003 ENGLAND WINS THE RUGBY WORLD CUP2003 DARRYL EALES BECOMES LDC CHIEF EXECUTIVE2004 TSUNAMI DISASTER IN INDIAN OCEANJULY 2005LONDON BOMBS2005 ‘LDC IN THE COMMUNITY’ PROJECT INITIATED2005 FIRST LDC NATIONAL CHARITY QUIZ HELD2006 LDC CELEBRATES 25TH ANNIVERSARY2007 LDC invests over £300m for first time2007 IPHONE LAUNCHED BY APPLE2007 EDINBURGH AND BRISTOL OFFICES OPEN2009 HONG KONG AND ABERDEEN OFFICES OPEN2010 CELEBRATE THE STAR EXIT FROM PORTERBROOK2011 CELEBRATE THE STAR EXITS FROM ASCEND, AIRCLAIMS AND AESICA2011 RECORD INVESTMENT YEAR FOR LDC WITH OVER £363M INVESTEDLONDON 2012 OLYMPICS AND QUEEN’S DIAMOND JUBILEE2012 BIRMINGHAM TEAM CELEBRATE 25 YEARS IN THE REGION2012 ON TARGET TO INVEST OVER £1.3BN IN PAST FIVE YEARS2012 OVER £1.7M RAISED FOR CHARITIES SINCE LDC IN THE COMMUNITY INITIATEDWINTER 2012 5

INVESTMENT REVIEWPERFORMANCE THROUGH PASSIONOCEAN OUTDOOR: IMAXThroughout 2012 our UK-wide investment teams have continued to build adiversified portfolio of high growth, mid-market businesses across a rangeof strategically important industries, despite challenging economic conditions.Despite a diversity of sectors,business models, sizes andinternational exposure, thecommon denominator, asever, has been the calibre ofmanagement teams.In the year to date, wehave supported firms acrossgrowing technology, mediaand telecoms (TMT) industries,including boutique mediacompany Ocean Outdoor –which fills a unique positionin the outdoor advertisinglandscape – to strengthen itspresence across the UK’s top10 cities.We have also backed themanagement buyouts ofambitious exporters withexposure to growing overseasmarkets, including BifoldGroup, a valve producer forhazardous, corrosive andsubsea environments.The support services segment,too, has been an importantfocus during 2012. Ourbacking of the managementbuyouts of TD Travel, a leadingindependent business travelagent, and Airline ServicesLimited, which providesessential maintenance, repairand overhaul services to airlinesand aviation businesses in theUK and internationally, haveillustrated our confidence inthe sector.To date, we have deployed£250m of equity across 16new businesses, maintainingour 2011 commitment andtaking our five year total toaround £1.5bn.The market for high qualityinvestments has remainedcompetitive this year, while dealstructures have continued to beconservative. As such, our focuson self-origination and buildinglong-term relationships withstrong, ambitious managementteams, has allowed us towin a number of competitiveprocesses and realise key offmarket transactions.We have also continued tosupport the ‘buy and build’strategies of our portfolio firmswith a further £40m+ of equityfunding to help them build scaleand broaden their propositions.A-Gas’ acquisition of leadingUS-based refrigeration supplierand distributor Coolgas Inc inOctober, transacted with oursupport, represented its fourthbolt-on of 2012 and the nextstrategic step in thecompany’s internationalexpansion strategy.Our flexible investment model,which backs management,To date, wehave deployedOVER £250mof equityacross 16new businessesdrives operational change andsupports both organic andacquisitive growth, continuesto be highly relevant in the lowgrowth environment.Throughout 2012 it hasattracted some of theUK’s strongest mid-marketbusinesses, each with their owndifferentiated propositions andmarket opportunities.6REFLECTIONS

INVESTMENT REVIEW2012 INVESTMENTSLDC continues to invest right across the UK and in all sectors.Since 2003 LDC has supported 137 UK businesses, investing over £2bn.In June, our North West team backed thesecondary buyout of Manchester-basedMetronet (UK), an internet service provider, witha £13m investment to support the expansion ofits wireless network across the UK.Founded in 2003, the company providesbusiness critical data infrastructure, includingwireless and fibre leaded lines and metropolitanethernet networks, to over 500 UK companies.We will provide expertise to enhance the firm’smarketing and sales functions, as well as investin its infrastructure, to enable Metronet (UK)to become one of the UK’s market leadingsuppliers of commercial wireless services.Having formed Boom Pictures alongside seniormembers of Boomerang PLC’s managementteam and Lorraine Heggessey, a formerController of BBC One, we completed thepublic-to-private acquisition of the AIM-listedmedia production group in June.An ideal platform for the new business,Boomerang is a thriving production groupestablished in 1992. It comprises a range ofcompanies whose activities include programmeproduction, post-production services,television facilities and talent management.Boom Pictures is now targeting bolt-onacquisitions of independent and creativeTV companies which would benefit fromadditional investment and the expertise ofsenior industry executives. The deal furtherdemonstrates our commitment to the TMTsector, in which we have invested in over50 companies.In the sixth transaction from our £200mspecialist engineering and manufacturing sectorcommitment, our Midlands-based team invested£10.5m to support the management buyout ofDale Power Solutions from TT electronics plc.The £30m turnover company was formedmore than 75 years ago and operates throughtwo established brands, Dale and Erskine.The firm provides secure power and businesscontinuity solutions to major national andinternational customers in the petro-chem,telecommunications, rail, financial servicesand industrial sectors.Having completed the transaction in Augustand appointed experienced industry chairmanDenzil Lee, Dale Power Solutions’ highlycapable management team will pursueappropriate acquisition opportunities in relatedproduct areas in the UK and internationally,as well as continuing to expand organically.In only the second private equity-backedtransaction to complete under the AlternativeBusiness Structure model introduced by theLegal Services Act, we invested for a minority22.5 per cent shareholding in Keoghs, one ofthe UK’s leading providers of claims-relatedlegal services to the insurance sector.The firm, which employs over 1,200 peopleacross offices in Bolton, Coventry andManchester, combines its legal andinsurance expertise with market-leadingprocesses and technology to defend andprocess a wide range of claims.Our support will enable Keoghs tocontinue investing in its people, processesand technology infrastructure, whileproviding capital for potential strategicacquisitions to add complementaryservices and scale to its operation.WINTER 2012 7

EXIT REVIEWDRIVING VALUE IN THE LOWGROWTH ENVIRONMENTOur approach to building valuewithin our diverse, mid-marketportfolio has not only been thebasis of our investment successover recent years, but also asignificant contributor toregional economic stability.To realise successful exits that benefit businesses’shareholders, customers and employees againstthe challenging trading backdrop, innovative andproactive investment strategies are more importantthan ever.Our heritage is built on working closely withmanagement to deliver positive transformationalchange. Whether this is realised through buildingscale, extending geographical coverage, exposingfirms to new, high growth markets; driving operationalefficiencies or broadening service and product sets –delivering true value is our ultimate goal.This value can be measured by turnover, profit,employee number and market share increases, and,while these metrics naturally have positive implicationsfor exit multiples secured by us as a private equityinvestor, their economic implications in terms of wealthand job creation are also compelling.This year, we have continued our unwaveringcommitment to backing management teams’ growthambitions, delivering successful exits for bigHand,Eveden Group, Cranswick Pet Products and DirectGroup. In each case, we invested prior to the onset ofthe global economic downturn and supported the firmsin the challenging, low growth environment.These four exited investments have realised capitalgains of more than £38m to date with a moneymultiple of 2.1x. In each case, we have carefullyplanned and identified appropriate exit routes toenable us to achieve strong returns, as well assecuring buyers aligned to the strategies of theassets in question.This performance builds on last year’s impressiverecord, which saw us realise our investments innine companies. Collectively, these transactionsproduced capital gains in excess of £100mwith a money multiple of 2.2x.8REFLECTIONS

EXIT REVIEWLDC made a minority stake investment inNorthamptonshire-based Eveden Group, aleading international supplier of premium fullerbust and full figure lingerie and swimwearbrands, in 2006.We worked in close partnership with Eveden’smanagement team to implement a strategyfocused on the roll out of its Freya and Fantasiebrands across key international markets, and theexpansion of its product lines.It completed the acquisition of premium Frenchlingerie brand Huit, and created a broaderportfolio that now includes Elomi and Fauve.For the year ended June 2011, turnoverincreased 18 per cent to £81.9m, comparedto 2010, while pre-tax profit almost doubled toreach £8.4m. Total employees also grew 34per cent to 660 people during our hold period.In March, we exited Eveden Group toTokyo Stock Exchange-listed WacoalHoldings Corporation in a £148m dealwhich delivered a circa 3.8x money multipleon our original investment. The deal will allowEveden to leverage Wacoal’s brandleadership to gain further traction acrossinternational retail markets.In May, we exited bigHand, the largestprovider of voice productivity software to thelegal, healthcare and professional servicesmarkets in the UK, to Bridgepoint DevelopmentCapital, which acquired the business alongsidemanagement for £49m.The company’s software allows users todictate from any device and route voice filesto required recipients for transcription andformatting. It includes integrated speechrecognition technology and makes the creation,distribution and processing of voice files moreefficient and secure.Having backed the primary buyout of thesoftware developer in 2006, LDC supportedits highly skilled management team throughthe firm’s expansion and investment in itssoftware as a service (SaaS) proposition tothe SME marketplace.We rolled over some of the proceeds of thesale, which generated an IRR of 34 per centfor LDC, to take a minority stake in the business– illustrating our continued confidence inbigHand and its management team.We completed the sale of our stake inCranswick Pet Products (CPP), the UK’s leadingmanufacturer and distributor of wild birdfood products and accessories, to WestlandHorticulture in a £18m deal in April 2012.The transaction with one of the UK’s leadingsuppliers of horticulture products was theculmination of three years’ close partnershipbetween us and CPP’s management team todeliver a growth plan founded on productinnovation and manufacturing efficiencies.As a result of this strategy, sales increased by 10per cent to £41.3m for the financial year endedMarch 2012, compared to £37.5m in 2009when we invested in the company.While the transaction represented anexcellent return for us and a strong platformfor CPP to achieve further expansion, weretained our majority stake in Cranswick Pet andAquatics’ other trading division, the TropicalMarine Centre, the UK’s largest supplier oftropical marine fish and associated aquaticaccessories and fish food.We backed the management buyout ofDoncaster-based Direct Group, an outsourcedinsurance services provider, in 2007.Since then, with our support, the business hasmade four strategic acquisitions to successfullydiversify its proposition. These have includedinsurance broker Millennium in 2008 to developDirect Group’s capability in distribution, andlaptop and mobile inspection specialist Circuitearlier this year.The strategy has driven sales growth of over100 per cent since we initially invested – withrevenues currently standing at approximately£20m – while headcount at the firm has jumpedfrom 70 to 450.In September 2012, we exited our investmentin the company to Ryan Speciality Group(RSG), the global insurance services business.The deal will allow RSG to strengthen itsmanaging general agent (MGA) and thirdparty administration (TPA) capabilities in theUK, and represented an excellent strategicfit for Direct Group.WINTER 2012 9

PORTFOLIO REVIEWINVESTING IN OUR PORTFOLIOcreating longterm valueMUSIC MAGPIEANTLERThe root motivation of our team at LDC is to support theambitions of the management teams we back in growingtheir businesses and fulfilling their potential.Throughout 2012 and acrossour portfolio, we were ableto evidence that commitment,investing in our portfolio todeliver improved financialperformance, enhancedcompetitiveness, jobcreation, forward growthopportunities and long-termshareholder value.In the year to date, forexample, we’ve provided over£40m of additional investmentto enable investee companiesto make strategically importantacquisitions, creating newservices, new vertical marketsand new overseas territoriesfor our portfolio. This takes ourtwo-year total funding forbolt-on acquisitions to morethan £100m.Combined with initiativesto drive expansion, weare particularly pleased toreport that 61 per cent ofour portfolio companies aretrading ahead of last year,despite the headwinds of a lowgrowth domestic economy andwidespread uncertaintyin the eurozone, the UK’smain trading partner.This, more than anything,demonstrates the calibre ofmanagement teams that weback and underlines theirpassion to drive performance.Collectively, this group of 80companies now generates anaggregate turnover of £3bn,a figure that would place it inthe top 10 of Britain’s largestprivately owned companies,and has a book value of morethan £2bn. It employs some30,000 people and generatesannual profits of £430m.As importantly, given theincreased focus on export-ledgrowth, our portfolio continuesto increase the proportionof sales to overseas markets,generating over £450m ofcombined revenue fromnon-UK markets.These achievements have beenrecognised throughout the yearin several key league tables.We were delighted to beranked once again as the mostsuccessful buyout house in TheSunday Times Buyout Track,which ranks the fast growingUK private equity backedbusinesses by profits (EBITDA).Despite the prevailing lowgrowth environment, sevenLDC portfolio companiesfeatured in the 2012 leaguetable of 100 businesses.Elsewhere, three of ourinvestments were ranked in TheSunday Times’ Tech Track 100,the definitive list of Britain’sfastest-growing tech-drivenbusinesses. Congratulations tomusicmagpie.co.uk, the onlinebuyer and re-seller of CDs,DVDs and video games (6th),hosting services group UK2.net(53rd) and fast-growinginternet service providerMetronet (87th).Meanwhile, six of ourmanagement teams wereranked in the top 200businesses in the UK for fastestgrowing international salesin The Sunday TimesInternational Track.With senior debt standingat 1.5xEBITDA within theportfolio, this also demonstratesthat our exposure to financialrisk is relatively low, withsubsequent savings from debtservicing costs enabling us tomake further investment in theportfolio to support organicand acquisitive growth.Across the piece, the role ofour Value EnhancementGroup in helping managementteams deliver such marketleadingperformance hasbeen key. From integrationsupport for acquisitions, ITinfrastructure re-design, drivingefficiency savings throughsmarter procurement, the teamcontinues to help differentiateLDC in the market as a providerof added value support tomanagement teams, both at astrategic and operational level.10REFLECTIONS

CASE STUDIESCASE STUDY: A-GASIn April 2011, LDC invested inspecial gases and chemicalsbusiness A-Gas, as part of a£70m deal. Since the originalinvestment, we have helpedto execute the company’srapid expansion strategyby supporting five bolt-onacquisitions in the UK andinternationally.While A-Gas enjoys a marketleading position in the UK,Australia and South Africa,the Americas and AsiaPacific markets represent asignificant growth opportunityfor the business. In September2012, A-Gas completed theacquisition of leading Texasbasedrefrigeration supplierand distributor, Coolgas,which further cemented thebusiness’ position in the US.The transaction followed theacquisition of Ohio refrigerantreclaimer and halocarbonmanagement specialist, RemTecInternational, in July 2012.The business also strengthenedits Australia operations withthe acquisition of Melbournebasedrefrigerant repacker,Technochem, in March 2012.The subsequent buyout ofAdelaide supplier of pestmanagement and fumigationproducts and services businessSA Rural in April 2012 will formpart of the Group’s IndustrialSpecial Products offering. In thesame month, A-Gas acquiredA-Zone Technologies in the UK.The company doubled its sizein 2012, now employing 237people across the enlargedgroup and recorded annualturnover of circa £130m. Theacquisitions have strengthenedA-Gas’ portfolio acrossrefrigerant distribution, reclaimand the carbon credit market,but also expanded its footprintin the US, the largest refrigerantmarket in the world.Following the acquisitions,the highly experiencedmanagement team hasreinforced its market leadingposition and benefits fromgreater economies of scaleand a wider geographicalspread. A-Gas has a wellinvestedasset base and isideally placed to capitaliseon increasing worldwidedemand for air conditioningand food refrigeration.CASE STUDY: ANTLERLDC backed the managementbuyout of the UK’s number oneluggage brand, Antler, in May2010. The investmenthas since supported thebusiness’ rapid expansioninto key international markets,through product developmentand the expansion of retaildistribution networks.Antler designs, sources andsupplies a wide range of casualbags, suitcases, cabin luggageand business cases underthe iconic Antler brand.The business has become oneof the most recognised brandsin luggage, accounting foralmost a quarter of all UKsales, the largest market sharefor any luggage brand. SinceLDC’s investment, Antler hasexpanded its international salesto account for 26 per cent ofturnover, penetrating marketsin South America, the Far Eastand India, including an exportdeal with Mexico’s leadingdepartment store, as wellbolstering its existing presencein the USA and Australia.Antler has developed productsthat match trends within highgrowthinternational markets,including brightly-colouredcases for Far Eastern consumersand compact on-board cases inresponse to the increased useof budget airlines in Europe.Antler now employs 427members of staff across itsheadquarters in Bury andoperations in Chicago andShanghai. The business’successful implementation ofits international expansionstrategy has cemented thebrand as a market leader in theglobal travel goods sector andpositioned it for further growth.CASE STUDY: UK2 GROUP & ONAPPLDC acquired a majoritystake in UK2 Group, aninternational hosting company,for £47m in partnership withits management team in April2011. The investment wasearmarked to aid the businessin expanding its portfolio ofhosting products andbuilding on UK2.net’sposition in the market.UK2 Group is a leadinginternational provider ofdomain name registration andweb-site hosting services tocustomers globally throughmultiple brands, from datacentres in the UK and theUS. In September 2012, thebusiness was ranked as oneof the UK’s fastest growingtechnology companies in thelatest The Sunday Times TechTrack 100 (53rd position),having recorded revenuesapproaching £30m.To maintain growth momentum,it is essential that we play arole in supporting managementteams with strategicappointments. Coincidingwith our original investment,we brought in former ChiefStrategy Officer at Cableand Wireless Worldwide PhilMale as Executive Chairman.Working with the existingmanagement, Phil has focusedon driving the launch of newservices and on growing thebusiness organically andthrough potential acquisitions.Since Phil’s arrival, formerMessage Labs CEO AdrianChamberlain was appointedas a non-executive director tobolster the board.We also identified anopportunity to provide furtherbacking to OnApp, a spin outfrom UK2.net, which providesthe only cloud deploymentand management softwaredesigned specifically for thehosting industry. The divisioncompleted the successfulspin-off from the Group inApril 2011 and receivedindependent investmentfrom LDC.OnApp has since grown toemploy over 80 employees andcontractors in the UK, USA,Malaysia and Ukraine, andhas launched its latest product,OnApp Storage, in March2012, which is estimated topower one in three public cloudnetworks around the world.WINTER 2012 11

TOP TABLETOP TABLE:KICK-STARTINGUK ECONOMICGROWTH12REFLECTIONS

TOP TABLEMEET THE PANELMARK EDWARDS, CEO, AIM AVIATIONFormerly CEO of Baxi Group, Edwards joined aircraft interior designer andmanufacturer AIM Aviation in June 2010 as part of the company’s LDC-backedmanagement buyout. AIM Aviation was ranked as the 25th fastest growingprivate equity-backed company in 2011.ANDY BOUNDS, ENTERPRISE EDITOR, FINANCIAL TIMESFormer EU Correspondent at the Financial Times, Bounds is a respected businessjournalist that has been writing for the pink pages for over 15 years and iscurrently the newspaper’s Enterprise Editor.TERRY SCUOLER, CHIEF EXECUTIVE, ENGINEERING EMPLOYERS’ FEDERATIONAfter a career in the Army, Scuoler joined Royal Ordnance (now part of BAESystems) as Marketing Manager and worked in a number of divisions incommercial, procurement, project and general management roles. In 1999,Scuoler became Managing Director of Ferranti Technologies Ltd, before beingappointed as CEO of manufacturers’ organisation EEF in 2010.MARK FLORMAN, CHIEF EXECUTIVE, BRITISH VENTURE CAPITAL ASSOCIATIONThe British Private Equity and Venture Capital Association named Florman as itsnew Chief Executive in January 2011. Florman secured the role after a thirtyyear career in business, including the private equity sector, and an involvementin an array of political, cultural and charitable activities.we will see some modest growth with underlying confidence starting toreturn, which I think will feed its way through into the real economy.The UK economy is still in a fragile position, but businesses are poised totake advantage of the opportunities that the new landscape presents.What are your expectations for theUK economy during 2013?AB: I expect continued sluggish growth,quickening slightly at the end of the year,perhaps at 1.5 per cent for the year asa whole. Consumer spending remainsdepressed as living costs rise fasterthan wages and people begin to paydown debt. Also, the public sector cuts,particularly local authority budgets innorthern regions, will start to bite.MF: I am optimistic that we will see somemodest growth with underlying confidencestarting to return, which I think will feedits way through into the real economy.That having been said, if the euro-areacollapses then all bets are off.ME: The UK represents a very smallmarket for AIM Aviation, which focuseson exports, but from a cost perspective,we are expecting reduced cost pressurefrom wages and salaries, but also in rawmaterials. We also expect interest rates toremain at their current levels.TS: Our latest forecasts are for GDP to fallby 0.2 per cent this year and grow1.4 per cent in 2013. There are twoways of looking at this. On the one handit represents a positive move towardsstronger growth after two years of a verybumpy ride after the post financial crisisrecovery quickly dissipated into a doubledip recession. On the other, one couldargue that it is a sign that the best we canhope for is sluggish growth, which reflectsa range of factors that are continuing toproduce a cloud of uncertainty hangingover the UK economy and our majormarket, the Eurozone. The UK industrialsector is, however, well placed to takeadvantage of any improvement in theglobal economy.WINTER 2012 13

TOP TABLEIn what business areas cancompanies achieve growth andbuild value this year?AB: Online businesses appear to be doingvery well, along with niche manufacturers,and will continue to do so. There arebargains to buy out there if you have cash.ME: From our perspective, we are a 100per cent export driven business and havegood forward order books.MF: A number of service sectors,defence, healthcare.TS: For manufacturers, the best opportunityfor growth remains the emerging markets.Despite slowdowns in China and India,both still represent significant growthpotential, whilst areas such as the MiddleEast and Brazil continue to grow strongly.UK companies should be looking toexpand market share in all these countries.EEF believes that the Government shouldset an economic growth ambition toincrease the number of companies forwhom exports represent at least 25 percent of their turnover. This would in turnhelp drive policy and direct the mosteffective use of taxpayers’ money tosupport exports.What are the key barriers togrowth for businesses andhow can they be overcome?AB: Sluggish consumer spending anda lack of confidence among potentialcorporate purchasers, together withhigh finance costs. It is important thatbusinesses move into growing marketsand identify smarter ways of deliveringgoods and services. If a business can’tsecure traditional finance, they should tryalternative lenders.ME: Any investment that requires thirdparties to commit is difficult to achieveat present, but we believe that this isindicative of the overall state of the marketand European situation, rather than areflection on our own business.MF: There is still a real issue with a lackof access to finance for many businesseslooking to finance investment. As the CBIhave pointed out, around £170bn ofprivate sector investment is needed overthe coming years, and overcoming thislack of capital is crucial to kickstarting theeconomy going forward.TS: A range of barriers exist for companieslooking to grow but two stand out. Firstly,skills shortages remain a perennialissue and are a factor constantly raisedby companies. This is especially acuteat apprentice, craft and technicianlevel where we are now suffering froma generation gap. This was wherecompanies stopped investing in suchschemes and where we saw a divide openup between the academic and vocationaleducation routes.Whilst considerable effort is going intoraising the awareness of a career as anapprentice and changing the image ofvocational education and manufacturing,it will take time to produce benefits and itis unlikely that the skills tap will be turnedon overnight. Another important issueis the lack of access to finance. This isparticularly acute for SMEs which havestruggled to source capital to supportinnovation and growth.In particular, what shouldcompanies be doing to gain accessto international export markets?AB: They need to be using the internet,joining trade missions and partneringwith larger companies that they supply, ifpossible. Many SMEs enter internationalmarkets that way.MF: Businesses should work with UKTI andif you need help with getting in touch withthem let us know here at the BVCA.TS: There are a range of facilities to helpcompanies gain access to internationalmarkets. First and foremost is UKTI whichhas altered its strategy in recent yearsto focus on a number of faster growingmarkets which offer UK companies thebest export potential. Currently, UKTIhas representatives in over 90 overseasmarkets and the feedback we get frommember companies on the level of supportoffered is generally very good. Formanufacturers there are specialists whocan advise how to break into specificmarkets and mentors who can offer bestpractice advice on how to break into newmarkets. Companies should also look towork with their supply chains, both upand down, to examine how they can takeadvantage of other customers which theirpartners might already have.How can the private equity industrycontribute to UK economicdevelopment in 2013?AB: Private equity can help contribute byfocussing on underperforming companies,For manufacturers,the best opportunityfor growth remainsthe emerging markets.Despite slowdownsin China and India,both still representsignificant growthpotential, whilst areassuch as the Middle Eastand Brazil continue togrow strongly.or those struggling, because there is nobank support in that area. The industry canapply expertise to help companies becomemore international.ME: It is vital that private equity continuesto invest in management teams to providethe financial backing and strategicsupport to help businesses to realisegrowth opportunities.MF: Our industry is currently investingaround £20bn in around 1,000companies each year, and evidence showsthat private equity-backed companiesperform better than non-private equitybacked companies on a range ofmeasures. As confidence returns to theindustry, we’ll see increasing amounts ofcapital being invested into UK businesses,and that can only be a good thing for ourlong term economic development.TS: Private equity can be a very importantsource of capital for companies of all sizes.It is particularly important and, in manycases, it is the only route for ambitiousmanagement teams to take ownership oftheir companies. Private equity can alsostrengthen a company’s sheet and thuscreate headroom for further expansionwith extended banking facilities. Whilethe issues of the duration of any investmentand the level of financial leverage of anyequity investment must be consideredand balanced, there is ample evidenceto suggest that private equity-backedcompanies, often with new expertexecutive support, perform above theindustrial average.14REFLECTIONS

TOP TABLEWINTER 2012 15

REFLECTIONS IN THE REGIONSYORKSHIREFROM ABERDEENTO ASIALDC drivesbusiness16REFLECTIONS

SCOTLANDThe private equity market in Scotland slowlyrecovers from the economic downturn – withrelatively few potential deals and intensecompetition for them - LDC Scotland isensuring that it is best placed to compete insuch a challenging marketplace.With oil and gas continuing to be anincreasing key element not just in Scotlandbut in the overall UK economy, we havestrengthened our position in that sector.Kevin Binnie has joined Mark Kerr in ourAberdeen office, giving LDC increasedfinancial expertise and sector know-howright at the heart of the UK oil and gasindustry. It continues to be an excitingmarketplace, full of potential and weare currently looking at a number ofopportunities.But while oil and gas continues to be anincreasingly key element, it is not to theexclusion of the rest of the Scottish economy.We remain totally committed to supportingScottish businesses and promoting economicgrowth through investment.LDC has demonstrated that investmentby strengthening our presence inScotland. Bringing in new staff in itselfcreates momentum and helps stimulatethe marketplace. We look forward withconfidence.NIGEL MOSSMANAGING DIRECTORLDC SCOTLANDNORTH WESTThis year has seen LDC invest over £100mof equity into North West based companies,a new record for the region and a clearsignal of the vibrancy of the local economyand business landscape. Our effortswere recognised at Insider’s North WestDealmakers Awards 2012, where LDC wasnamed ‘Private Equity Team of the Year’.Working with our colleagues in otherregions, key investments have includedAirline Services Limited, specialist valve andpump manufacturer Bifold Group, whichwon the Insider North West Deal of theYear, Metronet, the fast growing provider ofwireless internet protocol and managed ITservices and corporate travel managementcompany TD Travel. More recently, wecompleted a significant investment inKeoghs, one of the leading providers ofclaims-related legal services to the insurancesector, and the second major privateequity investment in an Alternative BusinessStructure under new legislation.It has also been an excellent year forrealisations. Last month, we formallycompleted on the sale of outsourcedinsurance services provider, Direct Group,to US owned Ryan Speciality Group. Thismarks a significant achievement for theteam, which we backed in an MBO backin 2007. During our five year hold, anddespite challenging market conditions in theinsurance sector in the wake of the 2008financial crisis, we helped the business tosuccessfully diversify its offering into severalfast-growing and high-margin serviceswith a total of four strategic acquisitionsand significant further capital injection.This provided a fantastic outcome for thebusiness, management and customers, andserves as a great example of our supportiveapproach to the businesses we back.Meanwhile the portfolio continuesto go from strength to strength. Fromcomplementary bolt-on acquisitions atWRG, the live events and marketingagency, and fast-growing field basedsoftware group Kirona, to acceleratedrollout at national nursery chainkidsunlimited, examples abound ofmanagement teams defying the sluggishdomestic economy and finding growth.We have also continued to expand theinvestment team in Manchester as we seekto increase our investment once again inREFLECTIONS IN THE REGIONS2013. Ged Gould, former FinanceDirector of American Golf, joined earlierin the year and we are in the process ofappointing a further senior investmentprofessional as a sign of our continuingcommitment to the region.Looking back, 2012 feels like a realturning point for merger and acquisitionactivity in the North West, which hasbeen made possible by the number ofquality management teams and businessesbased in the region and the tenacity andprofessionalism of its dealmakers andadvisory community. Moving into 2013,the deal pipeline is positive with a goodsupply of quality businesses seekingcapital for growth.CARL WORMALDDIRECTORLDC NORTH WESTYORKSHIREThis has been a year of significant changeand renewal at LDC’s Yorkshire operation,which was named ‘Private Equity Teamof the Year’ at Insider’s YorkshireDealmakers Awards 2012, and has putthe business in an ideal position tocontinue its growth in 2013.My own appointment to head the Leedsoffice coincides with John Swarbrick’smove to a part-time role with LDC until theend of 2013, enabling him to take up anew position as head of portfolio with ourcolleagues in the Business Growth Fund.We have also strengthened the existingteam with the appointment of Dale Aldersonas Investment Director from Deloitte’sCorporate Finance team in Leeds.John has been a major part of the privateequity community in the region for over adecade and I’m confident we’ll continue todevelop its role into the future.In investment terms, this year the LeedsMANCHESTERBIRMINGHAMWINTER 2012 17

REFLECTIONS IN THE REGIONSoffice led the MBO of TD Travel Limited, thetravel management consultancy business,as well as the acquisition of Thomson Aerofor portfolio company MB Aerospace, oneof the UK’s leading aerospace companies.This follows the buyout of Driver Hire, thefranchised provider of temporary andpermanent personnel to the logistics anddistribution industries, in 2011. As well asrealisations from the sale of globalcontract pharmaceutical manufacturerAesica and Volvox Group, the leadingsupplier of auto electrical products andindustrial consumables.Our portfolio - comprising a total of 10companies - is also performing strongly,with all trading ahead of last year thanksto a continued focus on organic growth.Looking ahead, with a 12-year track-recordin the region - based on over £200m ofinvestment in over 20 deals - and a highlyexperienced team in place at City Square,we are ideally placed to increase ourlevel of investment in the region’smid-market companies.JOHN GARNERDIRECTORLDC YORKSHIREMIDLANDS2012 was LDC’s 25th anniversary year inBirmingham and the Midlands teamenjoyed another active year of investingduring a period when M&A marketshave continued to be relatively benign.LDC maintained a significant share ofthe private equity mid-market which wasunderpinned by successful origination ofnew transactions. We had a strong start tothe year, completing two new investmentsbefore the end of the first quarter andmaintained the momentum with a steadyflow of new deals, exits and ‘buy and build’acquisitions thereafter.In the Midlands, we committed over£100m in six transactions in 2012 andwere recognised at Insider’s MidlandsDealmakers Awards 2012, where LDCwas named ‘Private Equity Team of theYear’. Our focus has been on supportinghigh quality management teams inindustry sectors with demonstrable growthfundamentals. New investments haveincluded Pertemps Network Group, AirlineServices alongside the North West teamand Dale Power Solutions.Pertemps Network Group is the UK’slargest independent provider of specialistoutsourced recruitment services andtemporary employment solutions. Thetransaction consolidated Pertemps andNetwork into a unified business, allowingfor more effective marketing and deliveryof its combined capability and facilitatingthe businesses planned growth andacquisition strategy. Airline Services, is aleading provider of aircraft de-icing, rampturnaround and cabin maintenance andretrofit services in the UK and overseas.This was an off market transaction sourcedthrough our network of longstandingindustry relationships. Dale Power Solutions,is a leading manufacturer of and serviceprovider for secure uninterruptable powersolutions which has a worldwide reputationthrough its leading industry brands whichare highly regarded and well recognised intheir markets for their technical expertise.A key part of our investment strategy isto assist management in positioning thebusiness for an eventual sale. Despite M&Amarkets being quiet we have achievedtwo very successful and profitable exitsto strategic trade acquirers in 2012;Eveden Group, the leading suppliers ofpremium fuller bust and full figure lingerieand swimwear brands was sold to TokyoStock Exchange listed Wacoal HoldingsCorporation in a £148m transaction.Wacoal represented an excellent strategicpartner for Eveden enabling the companyto deliver further worldwide growth byleveraging the strength of Wacoal’s brandportfolio and market position. CranswickPet Products, the UK’s leading manufacturerand distributor of wild bird food productsand accessories, was sold in a £18m dealto Westland Horticulture.Our most recent investment, completed inSeptember, was to support the managementbuyout of Forest Holidays, which specialisesin exclusive rural holiday accommodation.We are now working closely with ForestHolidays’ management team, helpingto support the continuing growth of thebusiness through proactive sales andmarketing initiatives, alongsidean accelerated cabin build programmewhich will include new sites in key UKforestry locations.As LDC’s first regionally based office,our focus has always been to form strongrelationships within the wider Midlandsprofessional and business communitiesand to establish a reputation for deliveringquality mid-market transactions – these corevalues remain equally relevant today, andgoing forward towards the next25 years of LDC in the Midlands!MARTIN DRAPERREGIONAL MANAGING DIRECTORLDC MIDLANDSSOUTH2012 was a busy year for the LDCSouth team and we were particularlyactive in driving acquisitive growth for ourexisting investment portfolio both in theUK and overseas.We committed over £25m follow-oninvestment into Bristol-headquartered A-Gas,one of the largest independent refrigerantgases, environmental services, specialitygases and chemicals producers, helpingto support the business in the successfulcompletion of five strategic acquisitions.It was also a year of considerablegrowth for EDM, one of the UK’s largestproviders of information managementservices. In February, we funded EDM’sstrategic acquisition of Filing Plus, whichrepresents the group’s fourth acquisitionin the past two years. We also workedwith the management team throughout therecruitment process to appoint non-executiveChairman Iain Ferguson.Towards the latter part of 2012, westrengthened our own LDC South teamwith the appointment of three investmentprofessionals. Based at our Reading office,Alastair Weinel, Alex Snodgrass andMatt Kenny are now helping to drive newinvestment opportunities across the Southregion and are all very welcome additionsto our team.YANN SOUILLARDMANAGING DIRECTORLDC SOUTH18REFLECTIONS

REFLECTIONS IN THE REGIONSHONG KONGLONDONLONDONLDC London enjoyed a busy start tothe year, with four deals completed bythe autumn, which was a considerableachievement given the still weak economicand business backdrop. As well ascompleting transactions we have alsobeen supporting our portfolio companies’strategic acquisitions and helping them copewith the difficult commercial climate.Overall this year, LDC’s London investmentteam has invested a total of £99m. Ourlargest investment was also the first ofthe year: the £41m P2P of WorkplaceSystems International Plc., the leadingsupplier of cloud workforce managementsolutions, with two smaller deals expectedto complete by the year end bringing thetotal to £136m. LDC, together with seniormembers of the management team, formedWasp Management Software Ltd to makea recommended cash offer for the firmin December 2011, which was declaredaccepted and unconditional in Januarythis year.This was followed in May by our backingfor the £35m buyout of Ocean Outdoor,the leading operator of ‘Digital Out ofHome’ (‘DOOH’) advertising sites. Outdooradvertising in the UK is worth close to £1bnin annual revenues within a fast-growingdigital advertising sector.In July we supported Boom Pictures’£7.1m public to private acquisition ofBoomerang. The vision for the new groupis to produce high quality programmesfor UK and International markets, buildstrong relationships with broadcasters andadvertisers and capitalise on the latestdevelopments for multi-media content acrossTV and digital platforms. This is a buy andbuild where management have alreadysigned their first two acquisitions.Two months later, in September, we invested£20m in a food and beverage fund run byHill Capital Partners, which focuses on theleisure and restaurant sectors. The fundingwill be used to buy into high-growth, UKbasedrestaurant and bar businesses,which have a small number of outlets butoffer potential for significant growth androll-out expansion.In terms of our portfolio companies,probably the most significant deal wasAvelo’s acquisition of TrigoldCrystal, theUK’s top supplier of technology solutions tomortgage distributors, creating the prospect,for the first time, of a truly integrated lifeprotection and mortgage portal for IFAs andthe broader financial advisor community.LDC has been very active in the TMT sector,with investments in over 50 TMT businesses.We previously announced a commitment toinvest £200m in the TMT sector over twoyears. We are well on our way to meetingthis target.For 2013, we are cautiously positive,with the economic backdrop likely to bemore favourable: the EU expects the UKto recover fastest out of the five leadingEuropean economies as growth in theEurozone remains stagnant. This will bemore supportive for the growth businesseswe target and should yield greateropportunities for us to deploy the capitalwe have available to complete deals, whichhelp these companies quicken their pace ofexpansion and contribute more strongly tothe UK’s overall economic recovery.DANIEL SASAKIMANAGING DIRECTORLDC LONDONASIAIn its third year, LDC Asia continues to buildout its network of quality partnerships andlocal expertise which provides a uniquegateway for our UK portfolio businessesto access the opportunities available in theemerging and high-growth markets of theFar East.Our support for beauty products businessOriginal Additions in developing amanufacturing joint venture in Indonesia isa great example of where we can help. Theteam’s due diligence support, as well as itsrole in acting as a local point of contact, hasbeen integral in nurturing this partnership.We have also supported WRG CreativeCommunication (WRG) in making itsstrategic first move into Asia with theacquisition of Hong Kong headquarteredSerious Events. The deal gives WRG astrong foothold in the region with deliveryresource on the ground enabling thecompany to better serve its multinationalclients operating in the region.The LDC Asia team is also committed todeveloping a direct investment businessin Asia. In the year we supported twopromising Chinese companies; Guangzhoubasedinfant wear business Best KidsInternational and English educationalservices company Guanya EducationGroup, operating in North East China.Looking ahead to 2013, in addition to“business as usual”, we anticipate a growingnumber of opportunities to capitalise on theincreasing trend of outbound M&A activityas Chinese corporates look to acquireUK businesses. Several of our portfoliocompanies provide strategically attractivepartnership opportunities for ambitiousChinese corporates.CRAIG WILKINSONMANAGING DIRECTORLDC ASIAWINTER 2012 19

FOCUS ON SECTORSSECTOR STRATEGYDELIVERS SUCCESSThis last year, in addition to our sector-wideorigination efforts, LDC has taken a strategic focuson a number of key industries and niche sub-sectorswhere we see significant forward opportunity.In June, we extended our £200mspecialist engineering and manufacturingcommitment just nine months after launch,adding a further £100m of firepower aspart of our effort to drive growth in thiscritical sector of the UK economy.With a track record spanning 30 years,125 transactions and over £250m ofequity investment, our teams across the UKhave since increased their focus on findingand backing successful, scalable, IP-richengineering groups who, with our support,can exploit their ‘Made in Britain’ heritageto export markets around the world.Under the three-year commitment, LDChas already invested around £120m in thepast 18 months across seven companies,including several businesses in its targetsub-sectors of aerospace and defence, oil& gas and power generation.Deals completed so far this year includeDale Power Solutions, oil & gas valvemanufacturer Bifold Group, packingspecialist Benson Group and mechanicaland electrical contractor PJD.Steve Aston, Investment Director at LDCBirmingham, who is leading the initiative,said: “Although the Midlands heartlandremains a key area of investment interest,LDC’s network of offices across the UKensures that we are able to effectivelytap into the richness of the manufacturingenvironment in numerous sub regions.“This increase in funding,” he added, “willgive LDC’s regional teams greater scope toexplore investment opportunities and we’reconfident more management teams willconsider the benefits that partnering with aprivate equity investor like LDC can bring.”20REFLECTIONS

FOCUS ON SECTORSManufacturing investments are creating significantrevenue growth through our £400m sector commitmentsUnder the three-year commitment, LDC has already investedaround £120m in the first 12 months across seven companiesIn September, we committed £20m ofequity to a new fund in partnership withHill Capital Partners LLP focusing on theUK’s fast-expanding leisure sector, witha particular emphasis on fast-growingrestaurant and bar concepts. Foundedby Paul Campbell, the former CEO ofsuccessful restaurant company ClaphamHouse Group PLC, Hill Capital bringssignificant sector expertise and trackrecord, ensuring we back the rightmanagement teams and the mostcompelling propositions for rollout.With a target investment range of between£1m and £4m, the number of opportunitiesunder review is increasing with the teamexpecting to make its maiden investment inthe first half of 2013.Tim Farazmand, a Managing Director atLDC, said the move demonstrated LDC’scommitment to backing entrepreneurialtalent in dynamic sectors.“Few can argue with Paul Campbell’s trackrecord. Having grown a whole host ofhousehold names at Clapham House - fromThe Gourmet Burger Kitchen to The RealGreek to Nando’s - his investment firm hassince backed the likes of Tortilla MexicanGrill, Hawksmoor and Vinoteca - eachone a bold new concept and format in thisexciting sector.”Elsewhere, we’ve continued to deploy our£200m commitment to the TMT sector,launched in 2011, helping more companiesto take advantage of major structural shiftssweeping through the business landscape.From the convergence of voice and datato content digitisation to mobile marketing,we’ve continued to add to our track recordof over 50 investments in the TMT sector,backing a new breed of sharp and smartbusinesses poised for growth and takingour total commitment since launching toover £180m. These have included themedia production group Boom Pictures,Ocean Outdoor, the leading operator of‘digital out of home’ advertising sites, andMetronet, one of the UK’s fastest-growinghybrid wireless and fibre internetservice providers.“The pace of change - in the wayinformation is moving between businesses,the way consumers are engaging withdigital platforms and the ever-increasingdemand for quality content - providesmajor businesses opportunities in the TMTsector,” says Daniel Sasaki, ManagingDirector of LDC London.“We’ve backed a group of companieswho we believe are in the vanguard ofchange and ideally placed to capturesignificant revenue growth in theyears ahead.”WINTER 2012 21

LDC IN THE COMMUNITYTROIS ETAPESLDC IN THECOMMUNITYCHELSEA AUTO LEGENDSLDC’s work in the community continues to play avaluable role in our business and the professionallives of our staff. Through our charity support andsponsorships, we raised over £240,000 in 2012,taking total fund raising over the last eight yearsto £1.77m.We have a passion to take on inspiring challengesand this quest will carry on in 2013 as wecontinue our volunteering work and support forour local UK charities.We will also see the return of Walking with theWounded as we back our team to tackle oneof the military’s toughest trials, the CambrianChallenge, as well as having another shot at theepic Trois Etapes cycling tour.Once again, I’d like to thank everyone that hassupported our fundraising efforts and spurred ourteams on to accomplish some amazing feats.ALL THE BEST,DARRYL EALES,CHIEF EXECUTIVE LDCMARK BEAUMONT Q&A – BUSINESSLESSONS FROM ATLANTIC ODYSSEYOn 2nd January 2011, LDCambassador and adventurer MarkBeaumont, alongside a crew of five,set off on an East to West Atlantic rowrecord attempt from Tarfaya, Morocco,to Barbados. The challenge; to row3,000 miles in less than thirty days,required the team to travel 100 nauticalmiles per day, via a strict regime of twohours on and two hours off the oars.The trip was a real test of mental andphysical toughness, but the recordproved elusive after the 11 metrevessel capsized 520 miles from StCharles in Barbados after 27 days atsea. All six members of the crew safelyexited the overturned boat and wererescued 14 hours later by aTaiwanese cargo vessel.Mark Beaumont takes some time outfrom his busy schedule to catch upwith Reflections on the AtlanticOdyssey expedition:Q: Firstly, I’m glad that you andthe crew are back safe andsound. It was an epic attemptthat ended just short of therecord, but how will youremember it?“By the end of the trip, surviving was theonly thing that I can really remember.For 28 days we were obsessed withbreaking the Mid-Atlantic rowingrecord, but that pales into insignificanceafter the 14-hour ordeal we wentthrough after our vessel, Sara G,capsized.Q: Has it changed your perspectiveon adventuring and future trips?“Yes. I have seen people perish in frontof my eyes on previous expeditions.22REFLECTIONS

LDC IN THE COMMUNITYthat you have a team withyou that you trust and has theexperience to handle even themost testing of situations.”Q: What was your bestmoment on the boat?“Whilst rowing the Atlanticwas 95 per cent brutal,there were some moments ofwonder on the trip that brokeup the monotony of endlesswaves, such as turtles anddolphins beside the boat, andthe incredible unspoilt andstar-studded sky at night.”Q: What was yourmotivation to takeon the Atlantic?“I wanted to learn whatit would take to cross theraise £5,990; £1 for everymetre climbed.The six-strong team comprisedthree injured servicemen,LDC investment executivePeter Latham, Matrix financialdirector Simon Oldfieldand was led by recordbreaking TV adventurer MarkBeaumont. The Trois Etapeschallenge encompassedthe three legendary alpinestages of the Tour de France,including the infamousAlpe d’Huez.The Walking with theWounded team completed thechallenge in five hours and 42minutes and managed to raiseover £48,000.You can still help the team inportfolio companies, to spenda full day working in thegrounds of Camp Mohawk.The team was involved incleaning, painting, diggingand building, as well asgeneral maintenance ofthe site.CHARITY QUIZDeloitte in the Midlands werecrowned 2012 championsof the seventh annual LDCNational Charity Quiz. Over135 teams took part in theNovember event, which washosted simultaneously atseven venues across Britain(Birmingham, Edinburgh,Leeds, London, Manchester,Nottingham and Reading).Birmingham trio Deloitte,NATIONAL QUIZ - BIRMINGHAMCAMP MOHAWKHowever, this was the first timeI thought “This is it, I’m goingto die”. I can’t find words todescribe the emotions that Iwent through at the time andafterwards, but it has had ahuge impact on me.“In the future, it will certainlymake me very careful aboutpicking teams. When thingsreally go wrong, some peoplekeep going, but others simplyshut down and freeze no matterhow physically fit they are.”Q: What lessons are therefor the business worldfrom your experience?“Like my expeditions, businesscan be enormously challengingand an adventure into theunknown. No matter what youare about to face, it is essentialOceans, having successfullycrossed most of the continentsby bicycle and climbing. As ateam, we were also motivatedto raise money for Childline.We were hugely grateful forthe staggering level of supportfrom the public, sponsorsand friends and family of thewhole crew, especially duringthe accident. And finally, amassive thanks to the crewof the Nord Taipei thatsaved us!”WALKING WITH THEWOUNDEDIn July 2012, LDC, A-Gas andMatrix supported another epicadventure in aid of Walkingwith the Wounded, which sawa team tackle the gruellingthree-stage, three-day cyclerace over 311km, in a bid toreaching its fundraising goalby donating £5 to Walkingwith the Wounded by texting“WWTW99” to 70070.CAMP MOHAWKLDC continued its supportfor Camp Mohawk, a multifunctionalday centre forchildren with a varietyof special needs in theWargrave countryside,near Reading. The charityprovides a range of activitiesand facilities to encouragevisiting children to play,socialise and learn in a secureand caring environment.Yann Soulliard, managingdirector, LDC South, led a50-strong team of LDC staffand volunteers from the localadvisory community andOrbis Partners and PwCprevailed to take the top threespots in the competition.To enter, each teamgenerously donated £400with proceeds from the eventgoing to a number of localand national charities. Eachquiz also hosted an auctionwith prizes including tickets toThe Ashes, dinner for four atThe Savoy and a singing JustinBieber Doll (which raised£210 on its own!). The eventraised over £70,000.WINTER 2012 23

LOCATIONSMIDLANDSINTERCHANGE PLACE, EDMUND STREET, BIRMINGHAM, B3 2TAPHONE: 0121 237 6500FAX: 0121 236 5269BUTT DYKE HOUSE, 33 PARK ROW, NOTTINGHAM, NG1 6EEPHONE: 0115 947 1280FAX: 0115 947 1290LDC (Managers) Ltd. Registered Office:One Vine Street London W1J 0AH.Registered in England and Wales no.2495714. Authorised and regulatedby the Financial Services Authority.More information can be foundat www.ldc.co.ukPrinted on stock manufactured from50% recycled waste and woodfrom well managed forests.LDC/RF1212SOUTHLONDON3 TEMPLE QUAY, BRISTOL, BS1 6DZPHONE: 0117 360 1970FAX: 0117 360 1971ONE FORBURY SQUARE, READING, RG1 3BBPHONE: 0118 958 0274FAX: 0118 956 8991ONE VINE STREET, LONDON W1J 0AHPHONE: 0207 758 3680FAX: 0207 758 3681NORTH WESTNO1 MARSDEN STREET, MANCHESTER, M2 1HWPHONE: 0161 831 1720FAX: 0161 831 1730YORKSHIRE1 CITY SQUARE, LEEDS, LS1 2ESPHONE: 0113 300 2013FAX: 0113 300 2601SCOTLANDQUAY 2, 139 FOUNTAINBRIDGE, EDINBURGH EH3 9QGPHONE: 0131 257 4500FAX: 0131 257 451033 QUEENS ROAD, ABERDEEN AB15 4ZNPHONE: 01224 261133FAX: 01224 326023ASIA26/F, 8 QUEEN’S ROAD, CENTRAL HONG KONGPHONE: +852 3416 4400FAX: +852 3416 4401WWW.LDC.CO.UK