Steve Boyd and David Moore: Called to account

Called to account

As UK plc steers an uncertain course through the recession, the boardroom body count continues to rise. While CEOs are fond of proclaiming ‘the buck stops here’, colleagues know only too well that the blame tends to end up somewhere different entirely.

The pressure on FDs is often intolerable. Long perceived as number crunchers safely removed from the commercial frontline, Finance Directors have increasingly moved centre stage. Traditionally, their responsibilities have barely extended beyond the production of data. Not only does the new breed of FD provide a link between disparate strands of the business but is often, to all intents and purposes, second in command of the good ship enterprise.

David Moore and Stephen Boyd have earned their place among the FD elite. David is genial, loquacious and friendly, a people person but with a tough, pragmatic side. He recently won the prestigious M&A Magazine Interim Manager of The Year award.

Presently commuting to Germany where he serves as interim CFO for international dental product distributor EDP Holdings GmbH, David has a demonstrable appetite for diversity. Past roles have included spells as Finance Director for the Industrial Minerals side of Anglo American plc, a member of the turnaround team for Morrison Supermarkets plc and international roles in a wide range of Private Equity backed businesses including manufacturing, property and financial services.

Stephen Boyd is a battle-hardened Springbok who made his name – and fortune – at Golden Wonder - Stephen is part of a management team that takes over the reins and transforms performance in PE backed business.

Specialising in food manufacture and dealing with major multiple retailers, Boyd’s approach is pragmatic, direct and unsentimental. Unabashed at the prospect of stripping out cost, consolidating sites or treading on toes, Boyd’s team has repeatedly delivered handsome returns for investors and shareholders.

The two men respond to different levels of tremor on the corporate Richter scale. David is summoned when concern and anxiety among PE houses sets the alarm bells ringing. Steve is more of an interim Red Adair – taking the call when confidence is low or the investment is imperilled or disagreements over strategy can no longer be mediated.

‘The CFO role nowadays is a very broad one’ David confirms ‘it’s one of the few functions that crosses the entire business. You’ve got to relate to the rest of the company, move away from your screen and get involved in commercial decisions’.

It’s important to demonstrate to the other parts of the business – to production, marketing, whatever – that finance has a key role, which goes beyond saying ‘your expenses are too high’. You’ve got to get in there and make Finance one of the key functions’.

‘I take a two stage approach’ Stephen interjects. ‘Firstly, I identify and start the debate. Secondly, I push issues up the agenda until they reach board level. People might not like the fact that a particular trend has been identified but boardroom attention means it will be addressed’.

The third point for me, which is very important, is providing support for people to make decisions so they end up looking good at board level. If you can bring all of those together – initiating debate, managing the agenda and decision support - you are delivering real value to the business’.

Leadership and discovery

David and Stephen tend to discover uniform issues in distressed businesses. Lack of leadership and outdated information create decision-making gridlock. Plunging morale, demotivated staff and dwindling cash reinforce the sense of despair.

Both men see their role as offering ‘grit in the oyster’, playing Devils Advocate to stimulate change. Their approaches may be different but David and Stephen concur in the need for management buy-in.

‘You have to become part of the management team’ David stresses ‘and get close to the people involved. The difference between an interim and a consultant is this: instead of advising management what to do, I actually do it. My approach is to treat people fairly, be honest and get the cash in’.

‘For me’ adds Steve ‘it’s about getting agreement about what the facts are. For example, on one recent project I was involved in, margins were slipping but no one knew why. Salesmen were blamed for giving the product away until my team demonstrated it was consumers trading down to less expensive items. That kind of information changes behaviour. Once you display the facts in black and white, you get management buy-in pretty rapidly’.

In the current environment, no one is indispensable. Corporate heads are rolling at an unprecedented rate and the CFO’s is often one of the first on a stake.

From the sidelines, the phenomenon seems puzzling. After all, one bean counter appears to be much the same as another. Stephen and David, however, beg to disagree.

‘If the Finance person makes a couple of mistakes’ David suggests ‘he may have lost credibility. Once people lose confidence in you, it’s hard to win it back. And sometimes the business has simply grown faster than the individuals in it. They are out of their depth and need to move on’.

‘Chartered Accountancy’ ponders Stephen ‘is a qualification that you can get if you study hard. However, having a finance person who has worked in a PE environment, knows what good management information is, has managed a business for cash and understands what it takes to drive value for shareholders – that requires a different breadth of knowledge.

‘In my area of consumer goods, that includes an understanding of the relationships with retailers, how they drive their suppliers, the need for promotional support and how brands are maintained. That depth of thought doesn’t come naturally to everyone’.

Stephen Boyd has no such fallibilities. Between 1996-2002, Steve served as FD with Golden Wonder Group Limited. Heading up a factory rationalisation programme, acquiring a stream of fresh businesses and developing strategic alliances, the management team led the sale of GW to Bridgepoint Capital Partners in 2000, delivering a five-fold increase in shareholder investment.

Convinced that additional value could yet be realised, Boyd and his colleagues rolled back over into the business. Breaking the group in two, Boyd facilitated a back-to-back sale to Pepsi Inc and Longulf Ltd, trebling returns for grateful shareholders yet again.

‘What I look for in a businesses opportunity’ he muses ‘is the quality of the product range, a supply chain that is not as efficient as it could be and a market sector which could do with consolidation.

Given the opportunity to consolidate going forward, there is always money to be made. I’m not shy about going into a business with a view to taking out significant cost or elements of the supply chain. What I would never go for is a business where the supply chain is efficient and growth is based on what we could sell to customer A, B and C if we had the opportunity; the business may not be able to deliver this’.

David Moore is a very different ‘gun for hire’. Admitting he only became an interim initially because he thought living in Switzerland for six months would be ‘a bit of fun’, David’s approach is fundamentally people-oriented.

‘It’s often a case of needing to work with existing management to implement change rather than using a ‘slash and burn’ approach. However, you have to either get management on your side or change it’ he says.

Phlegmatic he may be but David’s patience only stretches so far. If resistance to change proves intractable, David summons assistance.

‘On one of the jobs I was involved in’ he recalls ‘the Finance Director was in the next office and not communicating with the Finance Team. So I got a guy to come in over the weekend and smash a hole in the wall. It sounds a bit drastic but it worked’.

‘Some companies have incredibly complex management reporting systems where you can’t see the wood from the trees. At one client, I simply covered the office wall with all of the reports regularly produced then took them down one-by-one to produce a simplified process. I said to the team ‘that’s all you need, isn’t it?’ And it was’.

It’s a whole new world for PE backed businesses. Declining asset values and absence of credit have produced a dramatic fall in deal activity. In an environment when hockey stick growth can no longer be presumed, assets have to be sweated harder prior to exit.

Deal makers, movers and shakers

Dealmakers with time on their hands are discovering a new interest in portfolio management. To the dismay of those attempting to get on with running the business, banks and PE houses are operating at a much higher level of scrutiny.

‘Investors are much more hands-on and demanding better quality, more reliable, more timely information’ David observes. ‘There is also a need to look forward more accurately. Forecasts must be aligned to the actual performance of the business so the investors know what cash is coming in’.

‘Banks are also utilising their pool of knowledge – saying ‘we’ve witnessed this with Customer A, make sure you find out which other customers have that kind of exposure’. The kind of question we’re getting asked is ‘we’ve noticed this in x or y business, how is it affecting you?’

‘I have seen examples’ offers Stephen ‘where PE houses are getting in the way of the management at a time when it is the last thing they need. Of course, there are areas where a PE house can help – with access to better financing or opportunities to grow shareholder value – but when they become directly involved, it’s telling me that either they don’t have faith in the management or are trying to look busy’.

Once the economic tide finally turns, the lower and midmarket private equity space will have a crucial role to play in re-stimulating the economy.

Interim CFOs work on a shorter timescale. Charged with hitting the ground running, their task is to provide an instant injection of experience, energy and expertise for beleaguered management.

Across the PE landscape, external resource adds targeted value. On the acquisition front, interims offer management skills and control mechanisms to drive the business forward. On the exit side, retaining and maximising value demands blending traditional CFO duties with communication and softer skill competence.

‘Banks are sitting on a lot of problem children’ Stephen declares. ‘Part of the solution may be looking at the management team and thinking ‘if we can find the right people to put in there, individuals who are sympathetic to our needs and can turn it around, that might be the right option’.

‘Problems you could hide in the woodwork’ David interjects ‘and get away with when times were great now need addressing. A strong interim, a person who will stand up and get the issues aired is a valuable addition to the team’.

David Moore and Stephen Boyd offer two very different interim options. One is a multilingual ‘Mr Fixit’ renowned for steadying the corporate ship. The other is driven and challenging, a man with a proven track record for transforming under-performing businesses.

Both find themselves at a crossroads. Irked by the actions of A. Darling Esq., David maintains that recent hikes in UK tax rates provide serious motivation for calling it a day. Then admits that a low boredom threshold renders thoughts of retirement completely impractical.

Stephen is planning to spend the summer building a new house and getting his golf handicap down. In the event, however, that a business proposition proves too tempting, the plans will take a back seat and his clubs will remain in the bag.

‘When I started out’ David recalls ‘people would say to me ‘why move on, why not take the job permanently?’ Without being boastful, my answer was that you usually need to be over qualified for the job you’ve been brought in to do. Success is phasing myself out of the picture as quickly as possible and passing the baton to someone cheaper and more interested in the regular day job’.

‘There are plenty of underperforming businesses that have been acquired and require CFOs who can go in and make a difference. The danger is people with finance experience who have lost their jobs are coming onto the market and think they can do it but simply don’t have the skills’.

‘I’m happy to be out of the market for a couple of months’ Stephen concludes. ‘If you ask me where I would like to be, I want to get back into businesses where I can do what I’ve done in the past which is make a real impact’.

‘Wherever there is a business proposition that holds water, there will be PE deals. As the banks get comfortable with taking risks again and asset problems are assuaged, the situation will change. It may take a couple of years but there will always be opportunities to make money’.

Scott Lloyd: Anyone for tennis?

Lloyd banks on net profits

The least he could do is look worried. Or troubled or alarmed or confused. At the very least he could have developed the odd grey hair.

Scott Lloyd appears completely unperturbed. Managing one of the UK’s largest leisure organisations at the onset of recession is just another challenge for the 34 year-old entrepreneur. Doing so while bearing the burden of backbreaking debt and meeting the expectations of demanding investors makes no apparent dent in Scott’s disarming sang-froid.

Scott Lloyd, of course, is the son of tennis visionary David Lloyd. Having been dissuaded by his father from pursuing a career in the sport for fear of invidious comparison, the irony is that Scott has spent much of his business career in precisely the same position.

David Lloyd Leisure (DLL) began with a dream. Not to earn vast sums of money or even build a brand but to create a springboard for British tennis.

David Lloyd toured the world as a tennis professional during the Seventies and early-Eighties. One of the features of that bygone era was an extended offseason that Lloyd Sr usually spent in Canada running a chain of indoor clubs.

David Lloyd was renowned as a feisty competitor, a hustler, and a fighter on the court. He was also a man with a mission. In 1981, the only indoor tennis courts in the UK were at Queens Club in London. After yet another Canadian sojourn, David Lloyd returned home and founded DLL.

‘The reason my father started the business’ Scott recalls ‘was he wanted to develop and improve facilities for tennis players in Britain. As it happens, he saw a commercial angle as well but his main aim was to raise the standard of British tennis.

“I grew up watching my father, a sportsman, a determined one first and foremost, move into a business he was passionate about. He willed himself to success, living and breathing the business 24 hours per day”.

‘I am an accountant by qualification so my attitude is rather different. I tend to be much more reflective and deliberate, perhaps less instinctive or impulsive. Ideally, you would like a bit of both and I hope I am able to balance the two’.

The DLL concept met with an instant response from the UK public. Members not only joined to play tennis but also for the social networking opportunities provided by clubs offering a new lifestyle option. The business was floated at the height of the recession in 1992 before being sold to The Whitbread Group in 1995.

Lloyd senior found the corporate environment stultifying. His frustration magnified as warnings that Whitbread’s style of management would enable new entrants to encroach on DLL’s dominant position were repeatedly ignored.

Meanwhile, Lloyd Junior had left university. Taking up his father’s mantle, Scott decided that if anyone was going to compete with DLL, it might as well be him and set off around the UK looking for sites.

It’s all about service

Next Generation was founded in 1996.

The first slug of equity was raised in Jan ’98 and Next Generation’s inaugural club opened 12 months later. Over the next seven years, the company developed or acquired 14 sites before being snapped up by London & Regional for £198m in 2006.

Scott Lloyd didn’t spend long on the sidelines. Following a series of relatively minor acquisitions, backed by HBOS and L&R, Scott brought DLL back into the family fold for £925m.

‘Getting the most out of people is really what my role is about’ Scott contends. ‘Of course, you must take decisive steps when they are needed and hopefully have an instinct for business. Mostly, however it’s about having a bank of skills and managing people according to how they react and what suits them best.

‘I had a great team at Next Gen, and most of them are still with us, but we did not necessarily have the experience of running a big company. Among the DLL team, I tried to identify high calibre individuals who could homogenise with our people. There was no dominant philosophy. What I set out to do was take the best of both businesses and make them even better’.

Scott has heard it all before. The accusations of nepotism, whispers that his business career owes more to his surname than any genuine talent. Next Gen’s acquisition of DLL also gave rise to suggestions that Scott has a predilection for sentimentality.

Scott has heard it all before. The accusations of nepotism, whispers that his business career owes more to his surname than any genuine talent. Next Gen’s acquisition of DLL also gave rise to suggestions that Scott has a predilection for sentimentality.

it’s not just about finance. Not getting involved would have been a far easier option’.

Scott Lloyd runs a considerable business. The combined group currently operates 78 clubs across the UK and a further 10 in Europe, contending with rivals such as Fitness First, Virgin Active and LA Fitness. Over 470,000 members stump up annual subscriptions, contributing to turnover of £330m.

Integrating Next Gen and DLL was no easy task. Not least because the minnow had swallowed the whale. Setting about the task with characteristic energy, Scott Lloyd took the advice of a colleague.

‘The biggest challenge was one of separation rather than integration’ he points out. ‘Any business that has been part of a conglomerate like Whitbread is heavily reliant on centralised resource.

‘Bob Ivell, our Chairman has a wealth of experience of leisure businesses and his advice was to crack through it as quickly as possible. Yes, mistakes will be made but you can always come back and remedy those. If you let the process drag on for 12-18 months, the business never gets stabilised or starts moving forward again’.

Scott was quick to recognise that external resource would be imperative. Resisting pressure from HBOS to entrust the integration process to one of the big four accountancy firms, he decided to bring in an interim specialist.

Beyond the standard interim injection of expertise and experience, Scott was seeking something specific. Bridging the gap between the Next Gen and DLL management teams, creating a sense of merger rather than acquisition, required an independent perspective.

“I brought in an Interim Integration Director” Scott explains “to act as a facilitator for the different workstreams”

‘Her role was to manage the overall process, bringing together teams from both legacy businesses to work their way through a series of challenges’.

‘I am delighted we took that approach. It was an extremely tough assignment but she rose to the challenge. Had we gone with one of the Big Four, my feeling is that people within the business wouldn’t have had any sense of buy-in or felt they had achieved anything themselves. Working with an interim raised everyone’s game. I realised we had people with the stretch to become big players going forward’.

Scott Lloyd is a refreshingly straightforward, thoroughly modern MD. He is, fundamentally, a decent man, unfailingly polite and attentive. His urbane, composed, reflective character suggests someone who doesn’t scare easily. Given the size of the debt that Next Gen is servicing and current conditions in the marketplace, those traits may be sorely tested in the coming months.

‘The business is on track’ he declares. ‘Everything that we said we’d deliver, we’re delivering and we are doing it sooner than forecast.

‘The uncertain consumer environment means you may need to pull different levers to a different extent but the business is doing well. We took a prudent approach in our business case and got the financing done before things reached the stage that we see today. It obviously still affects us, especially in terms of the cost of borrowing, but the financial security for the business is there’.

The energy of success

Scott’s confidence is reinforced by two distinct factors. Commentators distracted by the scale of Next Gen’s debt often fail to appreciate that the group owns the freeholds on 80% of club sites.

Family priorities may also prove resistant to recession. While parents may be willing to sacrifice their own tennis or swimming lessons, the demands of their kids are often harder to resist.

‘The biggest challenge right now is uncertainty’ Scott declares. ‘Not knowing whether the trends in the business from one week to the next are going to last or get better or worse’.

‘You look at the information and think ‘are these numbers too good?’ or ‘has it finally hit us’? It’s difficult to trust or plan or invest. You have to be more flexible, more dynamic, more aware each day rather than assuming or expecting the numbers to come in. Where your range of performance may once have been narrow, you must expect to see a much wider variation’.

‘Keeping the nerve of everyone around you is essential. It’s all very well me painting a picture but you need everyone else to buy into it and cascade that same message. At times like these, when everyone is nervous, the slightest nuance in your tone or choice of words can be misinterpreted’.

Confusion is particularly rife in respect of Esporta. Acquired by a property tycoon in 2006, Esporta is back on the market after the company was placed in administration. Speculation over prospective buyers continues to feature David Lloyd Leisure.

Scott Lloyd has other concerns. Like finding time for an occasional game of tennis. Unable to recall the last time he picked up a racquet, Scott admits he is hardly a great advert for his own product.

David Lloyd’s vision has now come to pass. Where once there was only Queens Club, the UK has 800-1000 indoor courts. 72 years since Fred Perry became the last British winner at Wimbledon, UK tennis is finally out of excuses.

‘Going forward’ Scott concludes ‘we would like to reenergise business development in Europe which was put on hold under Whitbread. We’re open to all possibilities, whether that’s green field sites, single site acquisitions or franchise management. We’re only looking at 2-4 new clubs per annum split across UK and Europe so this is more about building a portfolio than spreading like wildfire’.

‘From a UK perspective, focus is on building the family offering, really emphasising our differentiator. Our clubs provide outlets at a time when playing in the street is becoming harder and harder and the stresses on the family unit are becoming greater and greater. Hopefully our clubs can provide some respite, acting as venues for the family to enjoy themselves together’.

“I feel proud that the availability of tennis to the nation has been materially enhanced by our hard work and more may be to come. If Andy Murray comes good next summer in SW19, tennis in Britain will simply explode”

‘Fundamentally, I want the DLL business to have, at its very core; the philosophies that I believe in and can only have learned or picked up from my father.

Alan Smith: A Chairman for All Seasons

Life and times

Not much sign of a recession here. The great and the good have gathered in the cavernous surrounds of The Wolseley tea room to network like fury, sup cappuccinos and spot the stars.

It’s a decent turnout for a Thursday afternoon. Sir David Attenborough is tucked away at the back, Tom Hollander is being all luvvie at the entrance and there are reported sightings of Alan Yentob. Mixed in with the celebs are captains of industry. You don’t need lip-reading skills to comprehend conversations far from earshot which are centred on turmoil in the marketplace. Outside, the weather is starting to turn chilly. Inside, loins are being girded with scones, jam and cream.

Alan Smith shouldn’t really be here at all. Leaving school in 1964, Alan set out with the intention of becoming a French teacher. Coming to his senses, Alan enrolled instead on a Business Studies’ course and even persuaded Huddersfield engineering firm, David Brown, to sponsor his student years. 18 months at Brown’s was more than enough. Alan moved on to Joshua Tetley, rising through the ranks at Allied Lyons to become Managing Director of Victoria Wine.

Retail was to prove Alan Smith’s forte. He spent six years at Kingfisher and three years with Boddingtons and Evans Halshaw, subsequently taking the reins at Somerfield and Robert Dyas.

Now in his early sixties, Alan is recognised as an eminence grise of the PE-backed environment and currently occupies four different roles; two VC backed Chairmanships (Empire World Trade and Fisher Outdoor Leisure) and two non-execs (Flybe and NAAFI).

“My style is to stay relatively close to the business”, he explains “it’s a typical retailer’s approach. The detail is important, the sales, the margin, the costs, the working capital. I want to know how the business did last week, what worked and what didn’t, what led to things working or not”.

“Then it’s a case of checking, of using that information to ask the right questions and making the right observations. It’s about making sure the possibly less experienced person who is running the company is prioritising the right things and asking the right questions”.

Alan has seen his fair share of boom and bust. For all his success, Alan bears the scars of 40 years in business and has witnessed more than one downturn. In anxious times, he believes, experience is paramount. “The present environment is pretty threatening” Alan concedes. “Customers are paying a bit slower, suppliers want you to pay faster, banks are more nervous about giving credit. What becomes key is cash and working capital not profit.

The Chairman’s role in a downturn is different. It’s about giving reassurance to the bank or the VC. I’ve got a pilot’s licence and it’s a decent analogy. The more landings you’ve done, the more you have encountered things like cross winds the better you can articulate that experience to those around you”.

Changing with the times

“In times like these, I’ll increase the frequency of contact."

"Sometimes managers might say something to me that they might not want to say to the Chief Exec. I wouldn’t use that information to beat up the CEO but I might suggest having a conversation with that person to draw it out of them."

‘What is absolutely fundamental is that the Chief Exec knows he is running the business, feels supported and encouraged by the Chairman rather than threatened. The Chief Exec’s role is tough enough, what you don’t want is a Chairman breathing down your neck”.

Having spent extended periods on both sides of the fence, Alan is ideally positioned to compare life at the helm of plcs and PE-backed entities. His verdict on the former is damning. In particular, Alan bristles with indignation at the sheer length of time that the CEO of a plc is expected to devote to analysts, institutions and stakeholders (‘you don’t get that crap in a private company’).

Tucking in to a chocolate éclair, Alan concedes that the heads of PE backed businesses are similarly bound to explain their actions to a VC but suggests the time involved is small by comparison. “I’m a great believer in keeping the VC informed”, stresses Alan. “If you try and hide something, it will come up. It doesn’t matter how shitty it is: tell them. That’s far better than them finding out another way. If they don’t like it, they don’t like it, but tell them what’s going on”.

“I’ve never felt there was any kind of balance to be struck between supporting the business and supporting the investors. You do whatever is right and appropriate at the time. If a Chief Executive says to me, ‘I need to discuss something but don’t want it getting back to a VC’, I’ll either agree or may say “it depends what it is because I might not have any choice”.

For Alan Smith, the role of Chairman in a PE backed business is principally four-fold. Responsibilities for governance and performance are taken as read. Strategic duties demand taking a detached, if panoramic view, while mentoring others appeals to Alan’s latent instincts for teaching. “A bigger grey area” he notes “is the distinction between Chairman and Non-Exec Director. As Chairman, you are leading, you take the board meetings, you help to set the corporate agenda”.

“The danger in a non-exec situation is that you end up being a clever bastard who asks difficult questions but doesn’t have any answers. I used to hate working with people like that. You’ve got to make sure the executive team want to hear from you otherwise you are not adding any value and you’re not really welcome”.

Smith is no-one’s shrinking violet. A man of strong convictions, he declares that distinctions between various species of private equity have been rendered largely irrelevant. Hedge Funds, Venture Capitalists, Private Equity organisations and angels are all “just organisations that invest relatively large sums of money rather than relatively small ones”.

In the post-Credit Crunch VC reality, Alan predicts that the ratio of debt to equity will change and a lower risk, lower return model will emerge. He is also adamant that VCs will increasingly supplement traditional methods of high interest funding with legitimate debt.

“The private equity landscape is in a very strange place” warns Alan. “You’ve got plenty of businesses that are doing well but how the hell do they exit? The idea of a quick cycle is fundamental to venture capitalists but who is going to be in a position to buy?” “And if you are on the new deal side of a private equity house, what do you do? There is no shortage of funds to invest but absolutely no possibility of getting bank debt. That situation can’t possibly continue.”

One of the most distressing tasks that can befall a Non-Executive Chairman is removing members of the management team. Alan suggests that wielding the axe is easier for a Chairman than a Chief Executive who tends to have forged close relationships with senior colleagues.

Where skill gaps appear, additional resource may be needed at short notice. Alan is a long-term advocate of interims and has used specialists to meet specific challenges in tough situations.

Investing in the future

“Interims don’t care about any political agenda” he proclaims. “They know they won’t be there in 3-6 months time so they just go straight in. An interim has probably seen your situation six or seven times before, so you get a very productive contribution at the flick of a switch”.

“In my experience, interims add the most value in Finance. You can survive without a sales director or marketing director or operations director for two or three months because you’ve probably got people who can keep the ship steady. But I can’t envisage running without an FD for longer than a fortnight and that’s too long”.

As the last cup of coffee is drained and the bill arrives, Alan returns his attention to Private Equity. Lamenting the reputation of venture capitalists as asset strippers, he recalls discussing the investment strategy for a pension scheme with trade union nominated fund trustees.

Conversation turned to whether the fund should invest in equities, property, Hedge Funds or private equity. One of the union reps (“really good, sensible people”) protested that the TUC was opposed to any investment in private equity companies on the grounds that members would be put out of work.

“This wasn’t founded on any evidence at all” Alan sighs “it was just an emotional response to the perception of PE backed companies. Anyhow, what’s so bad about Private Equity compared to what happened at Rover Cars? It’s a classic situation where the perception of private equity directly affects possible investment”.

Recent events in global markets have underlined how swiftly perception can impact reality. As companies across the UK batten down the hatches, no one’s perception is more important than the bank manager. “We haven’t experienced any situation where banks have become less supportive over the last 12 months”

Alan reflects “but they have become more questioning, more demanding of information. They are a bit closer to the business which is no bad thing. In all of my companies, the banks have behaved very properly. Whether their Lords and Masters will let them carry on doing so remains to be seen”.

It’s time to go. Dusk is descending across Piccadilly and Alan is rushing away to another appointment. Before he leaves, Alan looks to the future for UK plc. He forecasts a difficult winter for retailers, which is bound to feed back through the supply chain. Unemployment figures may continue to rise but Alan is confident that interest rates will come down, reviving the house market and ending the slow asphyxiation of industry.

On a personal note, Alan Smith still has much to achieve. Others might be content to depart stage left but Alan is hungry for more. “I think it would be quite fun to work in a bank” he intimates, only half-joking. “There is such huge inertia surrounding banks at the moment that it would be fascinating. It’s not going to happen, so it’s easy to say but I would love to contribute."

“I’ve had a number of people who have worked for me in plcs that have gone on to bigger and better things but I’ve not done that yet in Private Equity. I’d love to see somebody fly that I added a bit of value to. Last but not least, I’d also like to see Leicester City get back in the Premiership but perhaps that’s one ambition too far.’