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At Duke Street Private Equity, we have been investing in mature, mid-market Western European businesses for over twenty five years. Our investment strategy is concentrated on four sectors: Consumer, Healthcare, Industrials & Engineering and Services. Typically we invest in companies with an enterprise value of between €50m - €350m. 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.
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.
Our mission is to accelerate the growth of the companies that we buy. We help our companies grow both organically and through acquisition.
We have developed a robust approach to building relationships between ourselves, the CEOs of our portfolio businesses and our Operating Partners.
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.
"At Duke Street we have always adopted a flexible and innovative approach whether raising money or investing and then transforming our companies"
Paul AdamsWe 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.
"By funding each investment on a bespoke basis from our club of investors, it ensures the maximum alignment of all parties"
James AlmondSince 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 actively seek out businesses in need of operational change. We are passionate about improving the companies we invest in"
Stuart McMinniesWe 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.
"Our carefully targeted origination effort generally leads to transactions closed outside of competitive processes, allowing informed interaction with our companies to drive constructive change programmes"
Charlie TroupThe 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.
At Duke Street we consider environmental, social and governance (ESG) issues throughout the investment decision-making process and life-cycle. We believe that robust and well-implemented ESG policies and practices contribute directly to the long-term success and sustainability of our portfolio companies. Implemented effectively, they help us to protect and enhance reputation and financial performance whilst creating stronger, more valuable companies which can create benefits for all stakeholders: from employees to customers, suppliers to shareholders, and the wider community at large.
We review our approach to ESG regularly to ensure that it continues to reflect best practice.
As part of our commitment to actively address climate risks, Duke Street is a signatory to the Initiative Climate International (iCI), a global private equity initiative focused on cross-sector collaboration to develop pragmatic solutions to address climate change and, in particular, reduce carbon emissions of portfolio companies. iCI is endorsed by the UN-sponsored Principles for Responsible Investment (PRI).
As responsible investors we aim to minimise our environmental impact by ensuring efficient resource use in energy, water usage, recycling and reductions in greenhouse gas emissions.
We take our role as fiduciary guardian of our investors’ capital seriously and believe that strong corporate governance is essential to the financial integrity and success of our firm. Our investment committee oversees all investment decisions and we have put in place practices to ensure that we and our portfolio companies comply with all relevant corporate governance policies and procedures.
We aim to maintain a positive working environment both at Duke Street and portfolio company level by promoting diversity and inclusion and ensuring compliance with all employment legislation.
With careful consideration to all environmental, public health, safety and social issues we build better, more sustainable brands which benefit both Duke Street investors and the wider community in which our businesses operate.
Find out how Duke Street portfolio companies make responsible investing a reality.
Duke Street acquired Air Products’ Homecare operations in the UK and Ireland in November 2013. The Company, a non-core subsidiary of a large US corporate, operates in one of Duke Street’s specialist sectors, healthcare. Completion followed an extended nine month due diligence period, reflecting the complexity of the transaction that demanded an open-minded and innovative approach by Duke Street to ensure successful execution of the deal and allowing Duke Street to develop a strong relationship with the management team.
The business, renamed Baywater Healthcare, delivers oxygen-therapy, sleep apnoea therapy and non-invasive ventilation therapy services to patients in the home in the UK and Ireland.
Baywater was Duke Street’s second deal-by-deal financing.
In many ways Baywater is a classic Duke Street investment. The Company enjoys a strong market position being the no 2 player in the UK and no 1 in Ireland. It benefits from strong downside protection through heavy asset backing, strong market fundamentals, and highly visible cash flows. In addition, the company presented multiple routes to value creation through the delivery of a cash flow optimisation plan driven by better logistics, significant cost savings and building stronger in-house capabilities.
Baywater’s market is expected to enjoy steady underlying growth driven by an aging population and an increasing need from the NHS to manage cost by providing oxygen for patients in the home. The key disease area served by the company is Chronic Obstructive Pulmonary Disease, incidence of which grew at 3.8% CAGR in the UK between 2009 and 2012.
The Company will continue to be led by Adam Sullivan and the former Air Products Homecare Management team with the addition of Howard Jones as Finance Director. Douglas Quinn, the Former CEO of Paragon (now Voyage and a previous successful Duke Street investment) joins the business as Chairman.
The undisclosed consideration makes a total cash return of more than 5x cost for Duke Street and its co-investor, Souter Investments with the potential for further returns from an earnout based on future performance. The firm sold Baywater’s Irish operations to Air Liquide in August 2015.
The Duke Street investor base comprises traditional funds and pools of committed capital alongside co-investment mandates from high quality investors, which include Fund of Funds, Pension Funds, Insurance Companies and Family Offices amongst others. Our investors are long-term supporters of the private equity model and are located across the globe with substantial support from North America and Europe.
Duke Street has invested over €3bn in more than 50 companies over the last 25+ years and has achieved strong returns in excess of 25% IRR throughout the cycle. Duke Street is an independent sponsor and itself invests substantially in each deal, ensuring maximum alignment between Duke Street, its investors and management teams.
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