We chat with ECI Partner, Lewis Bantin, about how the market and his role at ECI has changed since joining in 2008, what his process is for identifying growth opportunities, and the best bit of advice he’s ever been given.
Q: You’ve been at ECI for 15 years, what’s been your greatest moment or memory?
My greatest moment was investing in the team behind Wireless Logic, Oliver Tucker and Phil Cole, in 2011. We helped them buy the business back from Dragon’s Den star, Peter Jones, at a time when there was a lot of turmoil and risk in the market. Then we assisted in mapping out a plan for how the team could grow and dominate to become a European leader in machine-to-machine communications.
We sold the business to CVC in 2015 at 6.1x return and now Wireless Logic is a ‘unicorn’ $100m EBITDA business. It’s a great success story for ECI, Oliver, Phil, and the industry.
Q: Since 2008 how has the market / your role changed and how have you adapted?
I joined ECI in the middle of the Global Financial Crisis and while we got out of the fundraising blocks at the right time, the market was in shock, fewer deals were being done and competition was much less intense.
Fast forward to today and we have lots of American and European funds operating in the UK and the availability of capital to entrepreneurs is substantially higher. Addressing this is where my role has changed the most. I was the first person in the Commercial Team when I joined, but we innovated and have carved out a real point of differentiation, with ECI’s value add capabilities enhanced significantly. With the Commercial Team, Origination Team and Growth Specialists we are nearly a third of the resource at ECI, which demonstrates how critical value is now, compared to where it was in 2008. It’s become a much more important part of our investment process.
Q: When do you first start engaging with management teams?
The way we work with management teams is one of the key differences between our approach and other PE firms. The Commercial Team and Origination Team get involved very early in the deal process and plays a vital role in managing and getting the most out of our commercial, tech and operational due diligence. That can be six to nine months before we invest.
Most other funds get involved late in the process which means the management team haven’t met them, built a relationship with them and shared the battle scars. We think it’s critical to get early buy-in, share the vision from the start, and build the three or four-year plan together.
Q: What’s your process for identifying and driving growth opportunities?
It’s always about openness, discussion and mapping out the journey together.
There’s obviously a lot that comes out of the DD process. It’s a big investment for us, but it’s the best way to identify new plans for growth and areas to develop. Our whole process is very open and transparent so we can help maximise the opportunity.
After investment, we’ll do an off-site with the management team and are totally open book about what we saw, what we thought, and put it on the table. Then we listen. After that, we’ll co-create the plan of what we want to work on and deliver the initiatives that will have the biggest impact on value i.e. what are the two or three game-changing plays that are going to define this chapter of investment as rapidly as possible post deal!
Q: What advice would you give management teams in the current environment?
The first point is choosing the right investment partner. If you’ve got a great business, there’ll be loads of funds keen to invest. So make sure you get under the skin of their business and what they’re going to be like. Speak to people who’ve been backed by them, question them about when things go wrong – what do they do, how do they behave. Really probe them because that’s when you’ll see what people are really like!
You also want to understand how much resource you’ll get access to and think carefully about it. How does it work? Is this the team that’s going to be with me the whole way through? How easy is it to secure it? (And don’t necessarily be seduced by shiny American firms that promise the world. Do they all work to one fund objective?).
You’re going to be working with these people for the next three to five years, so you need to be 100% sure that you’re going to be really comfortable having them on board.
Quick Fire with Lewis:
Outside the office, what keeps you busy?
Three kids! I adore them, but at 15, 12 and 9 they occupy any spare time I have outside the office.
Rugby or football and why?
Definitely rugby. The reason is the different roles on the pitch. You need a great scrum half, somebody who can kick your goals, you need to have a hooker who can throw into the line out – it takes all shapes and sizes. A guy who’s 6’6″ and 20 stone is just as important as someone who’s 5’5″ and runs like greased lightning!
What’s your ideal holiday?
I think it has to be skiing as it’s a great combination of activities. There’s nothing like skiing down a mountain and carving your turns to make you forget about everything else. Then you can have sunshine, great food and a well earned beer in beautiful surroundings.
Who’s your ultimate dinner party guest??
Despite being a rugby fan, I’m also a Red, and I think what Jurgen Klopp has done with the team is amazing. The way he manages, motivates and leads people is fantastic and I’d love to hear what he has to say. I just wish he wasn’t leaving at the end of the season!
Best advice you’ve received?
There’s two bits really.
Before taking my role at ECI, I was speaking to a peer at a US firm, and their advice was to be careful around the partner operating role. You don’t want to be just working with the biggest companies or only with companies that are in trouble. At ECI we’ve been very careful to build an operating model that doesn’t do that. We work with every company, all from the start, whether that’s going to be a 6x return or a 3x return.
The second piece is probably more personal. In my final year at University, I was doing what I’d always done and revising the whole course, but my girlfriend (now my wife) told me I’d never be able to do it. Instead, I should pick four or five things I can focus on and learn and practice those. She was exactly right as I managed to upgrade to a first!
What’s your favourite quote and why?
I think it was Gary Player who said ‘The more I practice, the luckier I get.’
It just goes to show that no matter which way you look at it, anybody who’s been successful has worked really hard at it. While it might look like luck, it’s because they’ve seen every shot and they’ve tirelessly practiced every shot.