News and Insights

Neal Griffith, ECI's CFO, discusses his unconventional route into private equity - from law degree to interning at a bank at the start of the global financial crisis -  and how he’s learnt to not catastrophise.

Q: You studied law, worked at a bank and then moved into private equity. What has driven your career decisions?

Over the years I have been asked a lot why I read law to then not pursue it as a career. The answer is that I didn’t have a concrete plan at 18 years old to be a lawyer, but rather considered that the degree sounded like a good one that would provide career optionality. I hoped it would teach me valuable skills around how to think critically, write succinctly and articulate thoughts clearly. I’m certainly not perfect at all of these things but I do think the degree helped! I frequently use those skills now in many aspects of my role.

Having graduated from a good university I had to think about what was next. I had done the usual law vacation scheme placements during my time at university but wasn’t sold on it nor had I received any lucrative training contract offers! Added to this was the fact that it was 2007 and the murmurings of a growing and global financial crisis were getting louder. After a bit of soul-searching I decided to take up the offer of a 12-month graduate internship in New York with the private banking arm of Citigroup. I suppose it was during this period that I realised the financial world did really suit me. The end of my year coincided with the demise of Lehman Brothers in September 2008, though, and it was then clear that we really were in the midst of a proper crisis.

Given I had all but settled on staying within the financial sector in some guise I set about trying to get a job within banking back in the UK. I dare not admit the number of times I was met with the phrase ‘we’re firing, not hiring’. A bit of sage advice from family members about the sense in getting a professional qualification eventually landed and I started my chartered accountancy qualification with Grant Thornton in Belfast in 2009.

So, a slightly more circuitous route than some of my peers but one that I now look back on with a great deal of fondness and appreciation for the lessons learned during one of the more volatile periods in recent history.

Q: And how did you end up in private equity specifically?

Complete luck, really. A colleague in Belfast who was training alongside me at Grant Thornton passed on a message from a recruiter about an entry-level finance role at a private equity house called Vision Capital in London. He wasn't interested but knew I had been talking about moving to London so shared my details. I got the job!

At that point I knew very little about private equity, I was just looking for the next step after audit and wanted to move to London. It ticked all the boxes and everything developed from there.

Q: What made you want to join ECI, and has it been as you expected?

A few things stood out. The culture felt distinctive, the track record and the long-established nature mattered. There is a lot of embedded experience here, and the functions and processes are well-established and tested. I also knew I’d have a proper handover with Philip, my predecessor, which I felt was a significant, and rare, benefit.

I realise it may sound a bit trite, but what I was sold during the interview process has materialised. I suppose one piece that we perhaps had not fully anticipated is the extent to which I would be wearing an AI hat within the firm. Well, two hats – the hat of someone who wants ECI to innovate and grow, and a compliance hat that is responsible for governance and data security. It’s a genuine stretch, but a really enjoyable one, the kind of stretch that ends up being one of the more interesting parts of the job.

Q: What do you think are the key attributes for someone looking to be a CFO in this sort of industry?

Comfort with complexity is essential. There are a lot of grey zones and you need to be at ease with that. Resilience matters too – things don’t go to plan more often than most CFOs would care to admit. And more than anything else, a good team. You can't do this job alone. We have strong internal teams, good advisors and good administrators, all of whom are essential.

I don’t think there’s a particular route in to the role and I view my own as having certain benefits. It forced me not to give up, but it also meant I built a broader set of skills than I might have done through a different path.

Finally, be prepared for the downs as well as the ups – this is a long-term industry and the best people within it tend to have that long-term perspective.

Quick Fire with Neal: 

What was your first ever job

Caddying at Royal Portrush Golf Club. It was a great job for learning to talk to people from all walks of life. I was 17, and I kept doing it through my university holidays. In hindsight it was excellent training for a career that turned out to be quite relationship-driven. It’s for others to judge whether I was actually any good at the caddying part!

Beach holiday or city break?

City break is my default, but these days, with children, beach holiday wins.

What's your best and worst use of AI so far?

The best is probably when we used it to dig quite deeply into a pretty specific legal point, which surfaced some nuanced alternative thinking that allowed us to discuss with the lawyers and ultimately achieve a better outcome. The worst was when we were repeatedly trying to get Copilot to scrape a file and it kept returning the wrong one. There’s something uniquely frustrating about it saying, ‘You’re right, my mistake, here is the correct file’ and returning, yet again, the wrong one.

What's the best piece of advice you've received?

It came from my dad, after I got some exam results that weren't what I had hoped for. He said: “It's not what you wanted, but just remember you're the same person today that you were yesterday and will be tomorrow. You'll get past it”. I'd always been fairly good at things up to that point, so it was the first time something had gone off-plan. I was catastrophising well beyond what was warranted. That advice – or really, that perspective – has stuck with me. Things still go off plan, and I'm still not perfect at dealing with that, but I'm better than I was.

What would your colleagues be surprised to learn about you?

That I do actually have a sense of fun! I think when you join a well-established organisation in a role like mine you probably lean with your more serious side. I hope that they have seen I do have a more fun side as well!

When we last wrote about the importance of DPI in 2022, we stated that this was becoming the most important metric for LPs assessing Fund performance. That importance has accelerated, with McKinsey's 2025 Global Private Markets Report finding that 2.5x as many investors ranked DPI as their "most critical" performance metric compared to just three years prior. Jeremy Lytle breaks down why it’s so important in the current market: 

The widening gap between TVPI and DPI

Distribution to Paid-In Capital (DPI) is one of the clearest measures of a private equity fund's actual performance. It is the ratio of capital a fund has returned to its investors against the total capital called i.e. once DPI passes 1.0x, every pound put in has been paid back. It is often discussed alongside Total Value to Paid-In Capital (TVPI), which takes into account the value of unrealised holdings. The distinction is important as TVPI reflects what a manager believes their portfolio is worth; DPI reflects what they have actually delivered. The wider the gap between those two figures, the greater the problem for LPs who have value on paper but none of the certainty of it being delivered.

The latest UK Private Capital Performance Measurement Survey shows the gap between TVPI and DPI is accelerating. This means LPs are holding more risk in undelivered valuations.

The cause for that gap is broadly Covid vintage funds. Significant capital was deployed at peak valuations, and many of those assets are now marked at book values that the exit market is unlikely to validate. GPs who deployed aggressively in that period are, in effect, stuck, as they are unwilling to crystallise losses by selling, but unable to demonstrate realised returns by holding. This is a significant issue in the market, albeit ECI’s focus on vintage diversification and deploying funds over a 4 year period means only 6% of the unrealised portfolio is from that peak 2021 period (one investment, Avantia, which is delivering 22% revenue growth and 42% EBITDA growth).  

The exit market has not yet rejuvenated

Despite expectations that 2026 would see an uptick in exit activity, it looks set to be another year of many investors pushing out realisations. For many exits, that is due to valuations still not being strong enough, as referenced above. For IPOs, geopolitical instability and the more cautious mood music on software valuations mean that planned listings are being deferred, creating a dampening effect on the large-cap market. For larger-cap Funds, or those holding a few outperforming larger assets, it is this lack of exit routes that is having such a knock-on effect on DPI.

That doesn’t mean there aren’t deals to do. Processes that would once have been competitive auctions are increasingly pivoting towards more discrete bilateral conversations, as selling funds are wary of tarnishing assets through failed sales processes in this unpredictable environment. Five of ECI’s ten investments in ECI 12 have been off-market, creating opportunities to spend more time with Founders and management ahead of an investment and ensure deep alignment.

Synthetic DPI is not the answer

Faced with this pressure, some GPs have turned to fund-level NAV facilities - borrowing against the fund to distribute cash to LPs without selling assets. This solves a short-term problem, but LPs don’t always view this favourably, as it comes with a cost and doesn’t actually deliver on the realisation of an asset. Distributions funded by leverage rather than actual realisations can be viewed as kicking the can down the road.

Continuation vehicles sit in a more nuanced place. Where CVs are used highly selectively, for premium assets and where management and investors are aligned, LPs generally are on board. But the credibility of that can be diluted if it happens too often. It gets harder to state that this asset is a ‘once in a decade’ opportunity if you said the same thing about a different business only the year before.

What is the impact on the market?  

The hunt for DPI is reshaping the industry in three ways. The first is fundraising. Firms unable to sell assets except at a discount are caught in a bind: hold, and their DPI stays too low to raise a new fund; sell, and their realised performance might be too weak. Many funds are pausing their plans, and the effect compounds, as slower DPI makes LPs more capital-constrained. 

The second impact of the hunt for DPI is on potential value creation. Because Funds can’t exit, their teams are stretched more thinly across multiple assets. At ECI, we’ve always believed that a focused single strategy, a disciplined deployment pace and a structured portfolio monitoring process are the foundations of a consistent DPI. 

ECI has a relatively small portfolio of 15 unrealised companies, compared to a team of 52 people, which means we can be more focused on managing risk and value creation opportunities. Our recent funds reflect that approach. Our 2015 vintage stands at 2.5x DPI, and our 2018 vintage has already passed 1.1x, materially ahead of relevant market benchmarks.   

A third impact is that there has been more of an interest from investors in the mid-market, because of the range of multiple exit routes, including larger financial sponsors, strategic trade exits and less commonly CVs or IPO exit routes.    

For the private equity industry to continue to thrive, exit activity and the recycling of capital is of paramount importance. Current market dynamics suggest the gap is likely to continue to widen this calendar year before we see a return to strong DPI performance across the market.  

If you'd like to discuss DPI or any of the themes raised here, please get in touch.

ECI are delighted to see Croud's appointment of Valerie Davis as US CEO. A transformational leader with a proven track record of scaling agencies and driving growth, Valerie joins at a pivotal moment, as Croud doubles down on its US growth ambitions off the back of a strong start to the year.

Valerie brings exceptional experience to the role. Most recently serving as CEO, North America at Assembly Global, she tripled the agency's US revenue in just five years, overseeing a 650-person organisation and presiding over landmark account wins. Her ability to drive cultural cohesion alongside commercial growth earned her one of the industry's most coveted honours: Adweek's Media Executive of the Year for 2024.

At Croud, Valerie will accelerate strong growth, elevating the brand, sharpening the go-to-market proposition, and deepening its client offering across media, data and creative.

Global CEO and Founder, Luke Smith commented: “Valerie brings the leadership we need to build on our strong growth and market position in the US. She combines deep experience scaling agencies with a genuine people-first mindset. We ran a thorough process to find the right leader to take Croudʼs US business to the next level. Valerie stood out due to her wealth of experience across client, holdco and independent agencies, giving her a strong edge on what clients need from modern agency partners. We always look for leaders with the right cultural fit for our business, and she absolutely ticks that box. Iʼm excited to work together.”

With senior leadership experience spanning Assembly, IPG Mediabrands and Bloomingdale's, where she led the launch of its eCommerce platform, she brings rare breadth across both agency and client environments.

Valerie Davis, US CEO, added, “When Luke walked me through Croudʼs journey, I saw a business at a clear inflection point, exactly where I thrive. The culture is strong, the thinking is sharp, and the commitment to clients is real. My focus is to build on that momentum and sharpen what makes Croud distinctive, both culturally and in the results we deliver for clients.”

Rory Nath, Partner at ECI, shared: "It's fantastic to welcome Valerie to the leadership team at Croud. Bringing in someone of her calibre and experience reflects Croud's strength and appetite in the US market, and I'm looking forward to working together as the team continues to deliver key US client wins." 

Valerieʼs appointment follows a string of US wins, including ChapStick, Ooni and Nikon, reflecting the strength of its integrated media, data and creative offering.

At ECI we’ve considered AI and machine learning in our investment theses and value creation plans for years. In the wake of GenAI, they’ve moved to the top of the agenda.

Investors need a deep understanding of the company’s AI defensibility to navigate the risk of AI disruption. Just as importantly, they need the ability to identify the value creation opportunities AI represents.

How do we assess that balance of defensibility and opportunity? For management teams preparing for investment, these are the questions investors like us are asking:

1. Subsector and business model first

The starting point is always the subsector and business model – and how AI is reshaping both. This is where an investor’s subsector knowledge and experience play in; the implications of AI for a travel business are fundamentally different to those for an insurance platform.  

Investors want to see management teams with a sophisticated and forward-looking view on the impacts of AI on their market and business. This may mean considerations around product diversification or monetisation, how their operating model and talent strategy need to change, or potential regulatory constraints.  

Moneypenny, the provider of outsourced communications solutions, has leaned into AI as a product accelerator, providing its clients with an AI Receptionist and Voice Agent that blends automation with human expertise. Critically, Moneypenny has built and filed patent-pending guardrails into its AI communication tools, ensuring responses remain accurate, on-brand and compliant, while seamlessly escalating complex conversations to its human team. 

2. How does AI play into due diligence

Whereas Tech DD is typically a distinct diligence topic, AI sits across every part of the investment conversation, including Commercial DD, Tech DD and Operational DD.  

As such, the first questions usually aim to understand the leadership team’s approach to AI in the round. Does the Founder and management team have an AI-forward mindset, high awareness of the threats and opportunities AI poses, good judgment and the ability to prioritise the most impactful AI initiatives, and the excitement to experiment?  

Often, the biggest risk is not that a company hasn’t yet made all of the AI progress it could have – it’s that the management team are resistant to change. Having the right business model characteristics won’t matter if leadership isn’t excited about AI and how it can improve their products, services and operations, and have taken steps to execute on that opportunity.

After that initial question to leadership, investors will typically look at the business model and its resilience to AI disruption. A term that is constantly used is ‘depth of moat’. At ECI, alongside our diligence providers, we often work with our Data & AI Growth Specialist, Orlando Machado, to help us test the barriers to disruption in the businesses we’re evaluating. That includes how easily customers could take a DIY approach, the traction of any AI-native competitors, and how adjacent players could interlope i.e. enter other parts of the value chain using AI.  

The flipside of this due diligence of threats is, of course, looking at opportunities – how AI can create value. We have seen material positive impacts of new AI-based products at the likes of Paragin Group, which has built AI into its suite of exams and assessments solutions, and on internal operations and workflows at Croud, with the launch of Agentic Croudies, among many others.

Management teams that can help private equity understand how they are best positioned to capture future growth will stand out – it’s what we look for throughout the diligence process and helps us build the conviction we need to go all-in and win deals.

3. Customer relationships and value-add matter more than ever 

We’ve always been focussed on the fundamentals of a high-quality business’s relationships with its clients. The levels of value-add, of advocacy, and embeddedness within its clients’ workflows – evidenced by high retention, inelastic demand, strong NPS, strong upsell and cross-sell...   

AI has raised the bar on why those characteristics matter.   

Investors like ECI are increasingly focussed on businesses with products or services that are deeply embedded in customer workflows, providing high-stakes or mission-critical functionality, and delivering something proprietary backed by trust, brand and reputation. Businesses with these characteristics can expect stronger valuations, not only as they’re harder to disrupt by competitors or DIY approaches, but also as they have the opportunity to leverage AI to further benefit their clients. 

We’ve always viewed technical complexity as a weak moat in isolation, as inevitably technology will catch up with any product, but this is especially true in the wake of AI. Ultimately, whether or not your competitors could build your tool or offer your service for less isn’t the most relevant question. The most relevant piece of the conversation is about customer impact and the trust they have in your product.  

4. Pricing in value

Some of the biggest questions for existing businesses around AI relate to pricing. If a service becomes substantially automated and more efficient to deliver, or it still delivers the same client outcome, but the client has fewer “seats”, can or should it still command the same price?

This question is particularly acute where AI has the potential to replace rather than augment human effort. Investors want to understand whether pricing maps clearly to value and how that relationship will be maintained, should there be changes to service delivery or consumption. The best-positioned companies are those that can deliver more value through their products or services thanks to AI – not just deliver the same offering for less. Where that is the case, pricing is less sensitive.

Avantia, the digital home insurance platform, provides a compelling example: its AI tool, “Holmes”, improved fraud detection accuracy 3.4x and completed payment calculations with 98% accuracy. Holmes also proved to have a much broader impact, making recommendations on claim coverage, payment amounts and next steps on complex cases, with agents noting that it provided a perspective they wouldn’t have seen without it on 84% of claims. The result is a materially better product for customers, partners and Avantia’s agents, with significant operational and financial benefits for the business.

More broadly, we are seeing pricing models flex to ensure they remain aligned with value creation, be it outcome or hybrid-based approaches or models (like Moneypenny’s voice agent), or aligning seat costs with “super users” that are protected in potential future seat compression scenarios.

What does this mean for your business?

AI is a huge opportunity for those companies able to harness its potential. We work closely with management teams across our portfolio to help them manage and prioritise the questions it raises to ensure they’re positioned to outperform in their markets. We have deep resources available to support management teams in benchmarking where they’re at on their AI journey (the ECI Data & AI Maturity Model), helping them identify where they would like to go, and supporting them in taking their first steps and beyond (the ECI Data & AI Toolkit, our dedicated Commercial Team, and our Data & AI Growth Specialist).

If you would like to speak with a member of the ECI team on how we’re thinking about AI and the impacts we see in your subsector, we would be delighted to hear from you.