On 31st April VocSoc welcomed Jeremy Richardson to talk about private equity careers. Mr Richardson has a wealth of experience in the sector as both an investor and then as investee. From the early 2000s he was set up and built a multi brand hotel chain, Kew Green Hotels, which with the backing of private equity investment grew to become the largest franchised hotel company in the UK and subsequently even in the EU. In 2015 the business was sold for over £400m.
Mr Richardson is currently CEO of Brighterkind, a private equity backed care home business. He started by giving an overview of how private equity works, what the economics of ownership look like (very attractive if you get them right), but he also pointed out that pitfalls and risks involved. As the market has matured, Mr Richardson made the point that it was getting harder for firms to generate the sorts of returns that the industry is famous for.
He then explained the differences between public and private ownership of businesses and the benefits that private equity firms can bring to companies that they buy, principally by enabling them to invest and grow outside of the public arena – he highlighted the benefits of less bureaucracy and more focus on the things that really create value.
It is no surprise that competition in the market has increased with many more firms choosing to enter and capitalise on the huge investment opportunities and historically very attractive financial returns available. Not surprisingly, the financial rewards have meant that competition between prospective applicants vying to get a career in this sector is extremely fierce. (Terra Firma for a start offered just 4 places on their graduate training scheme to over 1000 applicants). Mr Richardson informed us that it is very rare to get picked up straight out of university into private equity; instead, the traditional approach is to obtain experience in a commercial/ analytical position and only after that does one stand a chance of getting noticed. He encouraged us to think about post-university qualifications such as accountancy, law or an MBA, all of which provide routes into private equity. As with any career an element of luck is required to succeed, but as Mr Richardson suggested, it is up to you to make your own luck through networking, asking questions, and being passionate about what really interests you. His cited example of a friend who received 53 rejection letters before finally getting accepted into private equity is a testament to the rewards of tenacity and patience in whatever path you choose to pursue.