We focus on small to mid-cap industrial companies headquartered in the UK, a segment where we see the greatest opportunity to create value. Even as we grow and raise new finance, we will continue to target this part of the market.
We look for four key qualities in the companies we back.
First and foremost we are looking for good management teams we can work closely with to strategically develop and grow the business they run.
Secondly, we seek opportunities to use our own proven operational skills and extensive network of contacts to boost the organic growth of the business. Organic growth, accounts for the vast proportion of the value we create and typically we would be aiming to double top-line revenues within a 3 to 5 year period.
Thirdly, and crucially, we are looking for businesses that have a point of clear differentiation, whether that is a market leading position or a unique product or service that offers them a real competitive edge.
Finally, for companies working in highly fragmented markets we will look actively to make carefully chosen bolt-on acquisitions to strengthen the company’s position in the market or enhance its product offering.
In the early days of the Elaghmore Partnership we relied exclusively on our own personal capital to fund our investments, reinvesting the proceeds we generated into other companies in the portfolio.
The closing of the Elaghmore 1 fund in 2016 at £60 million – which includes investment from major institutions in the US and Europe and from the four Elaghmore Partners – means we now have more opportunity for future investment.
Since the launch of the fund, we have made four investments. SB Components a successful business in the manufacture of custom built parts for commercial vehicles. Priden Engineering, who deliver bespoke engineering solutions to leading companies in a host of sectors including pneumatic vehicles, commercial bodies, truck and bus, as well as food industrial engineering. McPhee Mixers, well-established as one of the leading UK suppliers of mixers to the construction and quarrying industry. Together these businesses form our Total Vehicle Solutions Group. Finally, we have acquired Kesslers International Limited, who provide world-class merchandising solutions for their clients from conception to delivery.
We continue to explore other investment opportunities, with the aim of delivering above average benchmark returns to our investors over the lifetime of the fund.