Portfolio Chair Graham Elton talks to Rachel Bridge at Drax about plate-spinning, negotiating and youth theatre.
Graham Elton has a nice way of explaining the difference between the way the corporate business world works and the way the private equity industry works.
He says: “Being in the corporate world is a bit like plate spinning – you are spinning 100 plates and as long as you don’t break any of them you get to play again the next year. Whereas in private equity you say, well let’s put 80 or 90 of those plates down in the corner for now and let’s spin the other ten or twenty ten times faster.”
His own time in the corporate world prepared him well for his subsequent career in private equity. Graham was Strategy Director at Pearson and then CEO at United Business Media at a time when both businesses were doing a lot of restructuring, so he oversaw a large number of acquisitions, mergers and disposals. This meant that by the time he arrived in private equity he had already amassed a lot of useful skills and experience.
He says: “I knew my way round deals before I got to private equity. I was the person who made the decisions, did the negotiating and did the all-nighters with the lawyers, and having lived through that a number of times meant that none of it was a surprise.”
Graham’s first involvement with private equity came in 2000 when he became a partner in Evolution Global Partners, an investment business. The business was co-owned by Bain, the consulting firm, and it was not long before he joined them to lead work in media and private equity. He has been running their private equity business across Europe for 13 years now.
In 2013 Graham realised that he would love to use the experience he had gained to help small businesses, so he reduced his time at Bain and became Chair of LBR, a legal information business backed by Bowmark, and saw it through a successful exit in 2017.
He also became Chair of Pageant Media, a privately owned company which plans to one day sell to private equity. In addition last year Graham took on the Chair role at financial services firm LCP, which is backed by Inflexion.
He sees a key part of his Chair role as being to ensure that the management and the private equity house are facing the same direction in terms of value creation.
He says: “The ideal is that all three parties are moving together with a common agenda and common set of objectives. If you have got that in place, then everyone is going to be looking at the same things. We know what metrics are important, what milestones should have been reached, where we need to be adding to management talent and what investments need to be made.”
Graham says that it is vital to create a value creation plan that people actually use rather than it gathering dust on a shelf.
He says: “Value creation has become a bigger and bigger piece of the puzzle for private equity. Twenty years ago private equity just backed the chief executive but now it is more about making sure that they really do know what they are going to do with a business when they own it. That is a very good thing for the business because it brings investment and expertise that they wouldn’t otherwise have had, and it is good for the investors because it is going to enhance the returns.”
Graham is clearly passionate about the role of private equity and yet his career in business almost didn’t happen. He was very involved in acting and directing theatre at school and university and at one point it seemed as though that might be the direction he took.
He says: “I looked quite seriously at the regional theatre director trainee scheme when I left university. Who knows, I could still be doing repertory theatre in some cold northern town if I had gone that way.”
He would still love to get involved in a not-for-profit youth theatre venture one day, saying: “I think that youth theatre is a tremendous enabler for so many people and a great way to increase people’s confidence.”
In the meantime, though, private equity continues to provide plenty of interest. Graham says: “Private equity is exciting because you are on a mission to make things happen within a short period of time. It is not like working in a large corporation where the end of the road is somewhere over a distant hill and maybe never; in private equity you have got a goal and you gear everything you do around that. It really focuses the mind.”
Drax sector lead: Nick Harlock
Director, Chair Network
Tel: 0203 949 9559