Plural chair Tim Trotter talks to Rachel Bridge at Drax about age, press conferences and the powerful role that private equity plays
If you happen to have been a business journalist in London in the early 1990s then the name Ludgate Communications will be instantly familiar to you, conjuring up images of press conferences in the City’s grand livery halls and lunches with chief executives to discuss company results. Back then Ludgate Communications handled the financial public relations for many listed companies and the stiff card invitations that arrived by post in the newsroom were a familiar sight.
Ludgate Communications was founded by Tim Trotter, who has used the experience he gained there, and at the consultancy Hill Murray he co-owned, to forge a highly successful career as a private equity chair.
Indeed it was at Ludgate that Tim first became involved with private equity, when Cinven invested in the business.
He says: “It was a very enjoyable and successful relationship. In those days private equity groups were still finding their way in terms of how they worked with entrepreneurs and business leaders so there weren’t any defined Key Performance Indicators and things like that; instead both parties had to sit down and decide, ok, how should we work together? How many board meetings should there be?”
After five years Cinven successfully exited Ludgate and Tim brought in Granville, now Baird Capital Partners Europe, before Ludgate was acquired by Interpublic in 1997.
Tim stayed on for a year with Interpublic but at the age of just 38 he made the surprise move to become a non-executive chair and embark on a plural career.
He explains: “It was very unusual in those days for someone my age to go plural and it was a bit of a shock to other people, particularly those from the industrial sectors. They couldn’t understand how someone so young could decide to go plural and not focus on just one business at a time as a group CEO."
"But I had been very privileged to be involved with developing and building two very successful businesses, opening up operations all over the world, and because we provided consultancy services to other business leaders I had learnt a lot from them. So I decided that I would like to build other businesses, from a non-executive perspective with my own management teams, and also help other entrepreneurs to build their businesses, by investing in them and mentoring the leadership teams.”
His bold move has more than paid off. Over the past twenty years Tim has been involved with a raft of fascinating companies in both the private and public sectors. He was a founding shareholder of Citywire, the publisher, and public relations firm Luther Pendragon. Today Tim is Chair of Glenfern, the management consultancy, and non-executive Chair of Alpha, bfinance, Catalyst, PEI Media and The SR Group. He is also a non-executive Director at SimplyBiz and an Operating Partner at Baird Capital Partners Europe.
He certainly has no regrets about having taken this career path, saying: “It was the right thing to do. I have thoroughly enjoyed myself over the past twenty years, not only building other businesses of mine and colleagues but also helping others to build their businesses.”
Tim firmly believes that private equity has a powerful role to play in helping entrepreneurial businesses grow, saying: “The quality of work and support from PE firms now for companies is exceedingly impressive and it is only going to strengthen. It is a strong and productive partnership.”
He highlights Alpha, a management consultancy which was started by an entrepreneur, as a perfect example. Tim came on board as non-executive chair when Baird Capital invested in the business and oversaw Baird’s successful exit, followed by Dunedin’s successful investment and exit, and then finally the listing of the business on AIM in October 2017.
He says: “Alpha is a very good example of how private equity can really help an entrepreneur, business leader or new management team to develop a business. Within five years it went through two very successful private equity relationships where both organisations were tremendously supportive. It remains independent with a new set of shareholders on AIM and the management team are still able to determine their own destiny.”
Over the years Tim has chaired businesses in a wide range of sectors, sometimes deliberately so. He says: “An industrialist once told me that as I had been involved in the service industry in my career to date, then of course I wouldn’t be able to become involved with a manufacturing business. But business principles apply to most, if not all, sectors. You need to look at the strength of the management team, succession, quality of service or products, product development, distribution channels, marketing principles, sales practices and so on. So I ended up chairing a specialist manufacturing business.”
However he now focuses predominantly on business services firms such as management and recruitment consultancies as well as financial services and media companies. He says: “The majority of my business interests today are people businesses and there is a particular approach to managing and building these types of businesses.”
Tim says that a good chair should do four key things – provide support for the CEO and management team, advise and lead the board on the strategic direction of the company, ensure that there is strong governance and oversee a successful exit strategy.
He says: “A good chair should be there to support the management team - but is not there to run the company. A chair is a sounding board, a mentor, coach and should also oversee the strategic direction of the business. There are going to be moments when there are challenges and therefore as chair you have to ensure that the management team make the right decisions.”
When deciding whether or not to take a chair role, Tim says there is a key factor which will determine his decision.
He says: “I have got to like the CEO and get on well with the management team. The chemistry has got to be right. If it isn’t, then I wouldn’t take the role, even if the potential gains are exciting.”
Drax sector lead: Nick Harlock
Director, Chair Network
Tel: 0203 949 9559