A leading private equity firm investing in Europe

Pan-Asian restaurant chain

A leading private equity firm investing in Europe

Manufactures and distributes medical devices

A leading private equity firm investing in Europe

Plant hire business

A leading private equity firm investing in Europe

Pioneering UK value retailer

A leading private equity firm investing in Europe

Specialist provider of healthcare services

We invest in Western European mid-market companies

Duke Street Private Equity has been investing in mature, mid-market West European businesses for over twenty years, concentrating our investment strategy on four sectors: Consumer, Healthcare, Industrials & Engineering and Services. Typically we invest in companies with an enterprise value of between £50m - £250m. Our strategy is based on our ability to identify unique opportunities and add value to each business we acquire. We aim to transform the prospects of the companies that we invest in.

Origination beyond the obvious

We focus our efforts on transactions developed on an exclusive basis. We actively seek complex deals which other investors may avoid if we think they have underlying growth potential.

Value creation

Our mission is to accelerate the growth of the companies that we buy. We help our companies grow both organically and through acquisition.

Supportive Structure

We have developed a robust approach to building relationships between ourselves, the CEOs of our portfolio businesses and our Operating Partners.

Sector focus

We believe sector knowledge is critical, which is why we have dedicated teams focusing on our four core sectors. This, alongside the deep industry experience of our Operating Partners, has allowed us to create a proven track record of successfully building companies.

We invest in companies with strong brands serving consumers across multiple channels

We have extensive experience in the consumer sector: in restaurants with wagamama, in the gaming sector through our investment in companies such as Gala Bingo, Sporting Index and Leisure Link. In leisure, we have invested successfully in both niche hotel operators and fitness and leisure businesses. Two of our investments in particular – SandpiperCI and The Original Factory Shop – display our willingness to back retail management teams with ambitious growth plans, even at a time when the sector as a whole was experiencing tough trading.

We also have a wealth of experience of working with management teams in consumer branded products. At Simple, we backed an ambitious growth plan for the business to become the UK’s leading skin care provider by volume, overtaking companies such as Nivea and L’Oreal in the process.

See our Portfolio for a more in-depth analysis of these and further Consumer investments.

Duke Street is a long-term investor in the healthcare space, making our first investment in 1997

Since then we have deployed c. €700m in the sector, backing great management teams to deliver transformational business plans.

We believe the sector to be structurally attractive: it is defensive and benefits from significant barriers to entry due to the complexity of the products and services involved.

We also believe that it lends itself well to our investment strategy. Europe is home to a large number of strong management teams, and high value-added businesses which deliver outstanding patient outcomes. Such businesses typically offer multiple routes to value creation. Even the most mature sub-sectors remain fragmented and so there is significant potential for buy and build.

Please see our Portfolio for a more in-depth analysis of our past and present Healthcare investments.

We cover a broad range of Industrials sub-sectors with a particular focus on aerospace & defence, engineering, manufacturing & security

We look to invest in companies with differentiated product or process IP, operating in attractive end-markets, with scope to affect operational transformation through inter alia, a build-up in specific niches, technological changes, or product / geographic diversification.

We back management teams with a clear strategic vision as well as a strong operational focus; and our in-depth understanding of the sector means we are well-placed to work in partnership with such teams.

Our investments in this sector include Deloro Stellite, the specialist engineering group, and filtration solutions provider Madison Filter. See our Portfolio for a more in-depth analysis of these and further investments.

We invest in services businesses with the potential for operational improvement and rapid growth

The services sector encompasses a wide range of sub-sectors, each subject to its own dynamics but often with outsourcing as a key driver. We identify macro trends that will drive above average market growth, and then back businesses providing value added skills and products to their customers in those markets. We are particularly attracted where there is the potential for operational improvement as well as organic growth. We partner with best-in-class management teams providing support, capital and expertise where this is required and materially adds value.

We have considerable experience in the sector, complemented by a large network of industry contacts. Investments we have made in this sector include Ardent Hire Solutions, a heavy equipment hire business, Payzone, a consumer payments business, and the specialist pensions group Xafinity. See our Portfolio for a more in-depth analysis of these and further Services investments.

Our Portfolio

Laurel Funerals

SECTOR: Consumer

www.lmfunerals.co.uk

First stand-alone Duke Street Deal

In April 2012 we formed and led a consortium to complete the acquisition of LM Funerals, one of the largest collections of funeral directors in the UK, from Sovereign Capital. This was the first deal that we had done outside of a classic long term fund structure, demonstrating the attractiveness and viability of a deal-by-deal model for us as a house and for our investors. An open minded and innovative approach to structuring meant that we were able to meet all stakeholder aspirations.

A dependable business

LM Funerals is the number three player in the UK market and has more than 60 branches concentrated in the Midlands and the South East. The company has grown by both acquisition and organic rollout since its inception. Typically each acquired business continues to trade under its original name post-acquisition and the original owners often also remain involved. This strategy ensures the preservation of trusted local reputations and relationships that have been built over a sustained period. With more than 60% of the £1.5 billion funeral services market run by 2500 independent operators, there is still significant room for further consolidation and LM Funerals is well placed to continue to be a credible and active acquirer.

Expert management

The management team, who will be significant shareholders in the business, is led by chief executive Deborah Kemp, who together with her team have extensive experience within retail/consumer and specifically the funeral services sector. Duke Street operating partner Johanna Waterous will join the LM Funerals board as non-executive chairman. Johanna spent more than 20 years at McKinsey & Company, where she co-led the firm’s European Retail and Global Consumer Marketing Practices. She is also a non-executive director of RSA Insurance plc and WM Morrisons plc. Bill Colvin, another Duke Street Operating Partner, chaired the business in the run-up to the exit.

An attractive business originated outside auction

This was a thesis led origination where we identified a number of potential targets in the sector. When LM Funerals first became available we declined to participate in the auction but once the auction failed we engaged with management and the vendor. We were attracted to the sector because of the low price sensitivity, high barriers to entry and opportunity for consolidation with more than 60% of the market in the hand of independent operators.

Exit

Having strengthened the management team, implemented significant operational change and accelerated the buy and build programme we needed to position the company carefully for exit to trade buyers. This was not straight forward as no one trade buyer could acquire the whole portfolio for competition reasons. However, by identifying the most advantageous buyers and encouraging them to form a consortium, we were able to negotiate an attractive exit price and run a private process to deliver it.

The business was sold to a consortium of Dignity and Funeral Services Partners in July 2015 for £75 million.

Our Team

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Investors

Duke Street has invested £2.4bn and realized £3.7bn since 1994, and currently manages over £500m AUM. Our model ensures maximum alignment between investors and management teams and provides flexibility as well as certainty of funding. Fundraising is aligned with our own internal investment committee process, ensuring timely execution.



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Contact

Duke Street

Nations House,
103 Wigmore Street,
London W1U 1QS

Tel: +44 (0)20 7663 8500
Fax: +44 (0)20 7663 8501

Email us

mail@dukestreet.com

You can use the email address above, or write to us for additional security. Enquiries will of course be treated in strictest confidence from time of receipt but we cannot guarantee the security of email (or other) communications with us.