Page 316 - James Caan - The Real Deal

The Real Deal

often take the extra million I’m going to pay each of them out of
my share of the profits. So, although Hamilton Bradshaw has
taken a 60 per cent stake for an initial outlay of £3 million, we
sacrifice future income from profits to do this. The reason I like to
structure my deals this way is because it incentivises the founders
and managers, which in turn makes success far more likely. If the
team stand to earn phenomenal bonuses for delivering on agreed
targets, how often do you think they reach their targets? Pretty
much every time.
As a small company with no investors to please, Hamilton
Bradshaw can make decisions few other private equity firms can.
Not only can we be quick – we share an open-plan office and talk
constantly, so there’s no need to wait for board meetings – but we
have so much expertise that what we bring to a deal is worth so
much more than money. Whatever problems a company has –
sales, cash flow, legal structure, premises, anything – I have
someone on my team who can find a brilliant solution. In fact, the
most important thing I look for when I make an investment is our
ability to add value. I’m not interested in anything that doesn’t
give me a 100 per cent return on my investment within three years,
and finding a way that our skills can exploit the opportunity is the
best way of getting that return. Unsurprisingly, then, one of our
recent investments took me back into the world of recruitment.
Eden Brown is a high-street recruitment agency that had been
going for fifteen years when we started looking at it. Its founder
and chief executive is a guy called Ian Wolter, and, as is often the
case when an established company is still run by the founder, the
business had become a little complacent, and the board had lost
the focus that we as outsiders were able to give. The company
wasn’t being challenged on the shop floor or in the boardroom,
and I could see that it was essentially a very good company that
just had a few structural problems. That made it a great
investment.

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