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

Xafinity

SECTOR: Services

www.xafinity.com

The UK’s top specialist pension services and employee benefits group

Xafinity was acquired for £115m in July 2005 and is a good example of Duke Street’s approach to post-investment transformation. The high number of medium-sized players in this sector made a Buy and Build strategy an attractive proposition. But a stable position in an attractive sector was not enough. Xafinity needed material change if it was to reach its full potential and attract a full price at exit.

Exciting opportunities in pensions and benefits market

We started looking at the pensions and benefits market in early 2004 and identified an increasing demand for high-quality specialist services. When Xafinity was initially put up for sale in late 2004, it went through a difficult auction process and failed to attract significant interest from strategic buyers. Our knowledge of the market meant we were in a prime position to acquire the company.

Xafinity, formerly Hogg Robinson’s Benefit and Consultancy Services division, is made up of three businesses: Xafinity Consulting is a pensions consultancy business; Xafinity Paymaster has a strong position in private and public sector outsourcing; and Xafinity Claybrook is the market-leading provider of pension administration software.

The businesses offered a sound base from which to capitalise on the opportunities offered by the pensions and benefits market. Ongoing pension deficits, the proposed National Pensions Savings Scheme and regulatory and legislative changes all pointed to strong growth potential in this sector.

Post-investment transformation

To steer the transformation, we appointed a new CEO, Tim Robinson, and Alasdair Marnoch as FD. Tim was formerly MD of the Security Division and a member of the Thales Group’s Executive Board. Alasdair was previously FD of Jarvis plc and Dunlop Slazenger Group. We appointed Richard Stephenson as Chairman, one of the DS Operating Partners. We also recruited Sir Nicholas Montagu, an industry expert as NXD. Sir Nicholas was the last Chairman of Inland Revenue and prior to that had held a number of other senior positions in the Civil Service under both Labour and Conservative Governments.

We worked closely with the senior team to strengthen management, develop and support an acquisition strategy and make the business more attractive to potential buyers.

Increasing capital investment

Having been run as three separate businesses in its former parent company, there were opportunities to make operational improvements at Xafinity. We also capitalised on other opportunities, including better cross-selling between the three businesses, a more aggressive approach to acquiring new customers, and service improvements.

To support our ambitious growth plans we increased the level of capital investment across the Group substantially. Efficient cash management, a property sale and lease back and the successful sale of the Remedi healthcare business in December 2006 led to an early repayment of bank debt and loan stock. By off-shoring selected processing operations we were also able to reduce the company’s cost base and enhance its competitive offering.

Buy and build strategy

In April 2008, we supported Xafinity’s acquisition of a key competitor, Hazell Carr. The acquisition provided Xafinity with a complementary set of business activities, combining areas of focus which integrated well into Xafinity and additional activities (such as complaints handling) which extended the Group’s service offering. The acquisition also established the company as a consolidator within its industry.

Exit

We sold Xafinity to Advent International in February 2010.

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.