Gurinder joined BGF in June 2011 and is based in Birmingham. His main role is to identify and successfully execute investments. He has ongoing board responsibility for a number of those transactions. Gurinder also heads up the AIM initiative in the Midlands and has led the first two AIM investments that BGF has completed.
Prior to this Gurinder worked in the mid-market corporate finance team at BDO providing corporate finance and M&A advisory to clients across numerous sectors including manufacturing, support services, building products and TMT. Gurinder started his career at KPMG working in the financial services and transaction services practices.
Gurinder is a chartered accountant with the ICAEW and holds a BSc (Hons) in Money, Banking and Finance from the University of Birmingham.
“What excites me most about my role at BGF is the privilege of interacting with a wide variety of entrepreneurs across a diverse range of sectors and business models, and I try to bring the same passion they display and the knowledge I gain into my own efforts to complete investments and subsequently support a portfolio company’s growth.”
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Ian joined BGF in September 2011 and is based in Birmingham, with responsibility for sourcing, completing and managing investments across the Midlands.
Before BGF, Ian was the CFO of Quotient Clinical, a provider of specialised drug development services to the global pharmaceutical sector. He also spent 10 years at 3i, where he completed over 20 investments across a range of sectors and represented 3i on the board of over 30 companies, helping them to grow and ultimately to exit via trade sale, flotation and refinancing. He started his career as an electronic engineer at Jaguar Cars, where he developed technologies for autonomous vehicles.
Ian has a Physics Degree from Warwick University.
“I have enjoyed seeing many people create really successful and valuable companies through the application of entrepreneurial talent, relentless drive, and patient capital. Helping more companies to achieve that success is what gets me out of bed in the morning.”
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FUNDING A SITE ROLL-OUT
“Roll-out programmes often don’t work out as expected, so you need balance sheet security in order to get past any nasty surprises…equity puts a slug of long-term capital into the business so you can take your time preparing to make the leap and then really go for it.”
Four years ago, Richard O’Sullivan, the managing director of Boost Juice Bars, realised he had a problem. His ten-strong chain of juice and smoothie bars was trading strongly despite the recession, as it capitalised on booming consumer demand for healthier products. And having previously built up one retail business, Millie’s Cookies, to 100 stores before selling up for £24m, he recognised he had another potential smash hit. The question was how to fulfil that potential.
“We felt the opportunity was rising all the time but our ability to fund that was definitely challenging,” O’Sullivan explains. “With four years of trading behind us, we knew our original business plan was going to be delivered and we had the ambition to do much more – it just wasn’t going to be possible to realise it with our finances as they were.”
O’Sullivan considered the best way forward culminating in BGF investing £2.5m in the business in December 2012. The money has enabled O’Sullivan to begin turning ambition into reality.
“We’ve been able to turn on the hosepipe, not least because the money has given us real credibility when we talk to landlords about securing leases” he says.
Andy Gregory, a regional director of BGF, led the engagement with Boost and has taken a seat on the company’s board. The dilemma facing O’Sullivan is, he says, common amongst fast-growing retailers and leisure businesses, which often don’t generate sufficient cashflow to realise their potential. Bank debt may be a solution, where it is available, but, Gregory argues, it’s not well-suited to businesses looking to fund an aggressive roll-out of new sites.
“Equity is a better source of growth capital for businesses in this position because it provides a more stable platform,” he says. “Roll-out programmes often don’t work out as expected, so you need balance sheet security in order to get past any nasty surprises. Debt may require you to accept covenants that mean you could lose the business if the roll-out programme goes wrong, but equity puts a slug of long-term capital into the business so you can take your time preparing to make the leap and then really go for it.”
Oliver Peyton, the founder of Peyton and Byrne, recognises this analysis. With three strands to his company – a chain of restaurants, a business offering catering services to iconic venues and a growing string of bakery and café outlets – he too found himself struggling to capitalise on the potential for growth.
“We felt we were at a turning point where we had to decide whether to really go for it,” Peyton says. “When you reach a certain scale, your growth needs to become more exponential, and we felt the economic environment was going to throw up the opportunities to achieve that – it felt like our moment, but we knew what we wanted to do required much more capital than we had available.”
Peyton had several concerns in mind as he began looking for new sources of finance last year. He recognised the company would not be able to secure sufficient funding from the banks to realise his vision for it, but having founded Peyton and Byrne with his sister, he wanted to continue trading as a family business rather than giving up control. He was also aware the company would need more than just financial support as it scaled up.
“We had to consider whether we had the ambition and expertise to turn our family business into something that would be much bigger,” Peyton says. “Whilst we talked to a range of private equity firms – that didn’t work for us. We chose BGF because they were only interested in a minority stake and they really seemed to understand our growth plan.”
In December 2012, BGF invested £6.25m in Peyton and Byrne with the cash earmarked for an acceleration of the company’s plans to roll out more of its bakery stores and to launch new restaurants. Crucially, in addition to the cash, BGF introduced the company to Mike Johnson, a former chief executive of Whitbread’s restaurant division, who joined Peyton and Byrne as a non-executive chairman to help provide that new expertise.
This support, financial and non-financial, has given the company breathing space to focus on the next stage of its development.
“Instead of worrying about cashflow, we now worry about growth, which is a much happier problem to have,” Peyton says. “In the past we’ve definitely missed out on opportunities because we didn’t have the funding to cope with more than one project at a time.”
The story at Wear Inns, one of the first examples of a business where BGF investment has fuelled a site roll-out programme, is similar. Like Oliver Peyton, John Weir, the chief executive of Wear Inns, was confronted by more opportunities than his business, which buys up underperforming pubs with the aim of turning their fortunes around, could cope with.
Weir was also concerned the company would miss out if he didn’t find a way to move more quickly. “It would have been possible for us to grow organically, but we might never have achieved our full potential because there’s a real window of opportunity in our business just now,” he says. “We’ve been able to buy at a time when pub prices are low, but that will no longer be true in 15 months’ time.”
The £8m investment BGF made in Wear Inns in May 2012, alongside additional funds from existing investor NVM, immediately enabled the business to add 11 new pubs to its 15-strong portfolio. “We think we have opportunities to pick up another ten while still being very selective,” says Weir. “But BGF has given us more than just the cash – they’re a supportive minority investor keen to learn more about our business but without breathing down our necks.”
Andy Gregory says it is the long-term and flexible approach BGF is able to take that is proving so compelling. Too often institutional investors focus on their own exit plans, which may not sit comfortably with the site roll-out programmes envisaged by the business seeking funding.
“Equity should be long-term flexible capital that enables the business to take strategic decisions without having to “just think about short-term cashflow” Gregory argues. “It gives the business the confidence to go out and execute their growth plans aggressively; plus you get an investor whose interests are aligned with the company – in our case over ten years or more if needs be.”
To secure that commitment, however, businesses must prove their mettle. Above all, says Gregory, this is an investment in people.
“Quality of management is incredibly high on my list of priorities when I’m considering whether to invest in a company,” he says. “If we’re going to have a minority stake for that sort of period, it’s crucial we’re confident we can develop a partnership that really works.”
BGF backs Midlands based Shuropody to expand its national footprint
Midlands based Shuropody is the UK’s leading specialist footcare provider with local branches in Birmingham, Coventry, Leamington Spa and Stratford-Upon-Avon within its 63-strong national network.
In September 2012, BGF invested £3 million of growth capital in Shuropody to enable the company to expand upon its current garden centre based sites, as well as the introduction of new community service locations. It is expected this will generate another 200 jobs over the next three years.
This investment was led by BGF’s seven strong Birmingham team and is its third investment in Midlands based businesses to date.
BGF’s ability to structure investments flexibly to best meet a particular company’s financing needs enabled it to split the £3 million growth capital investment into £1.5 million of ordinary shares and £1.5 million of loan notes.
Shuropody delivered sales of £15.8 million in the year ending 31 December 2011 and is expecting sales to double over the next 3 years. Headquartered in Coventry and founded in 2007, Shuropody offers podiatry services and comfort-focused footwear products. Initially opening a handful of stores in 2007, the company grew rapidly following its purchase of 43 stores from Boots, in July 2008. The business now operates from 63 standalone stores and concessions across the UK and is the second largest provider of podiatry services behind the NHS, with 400 employees, of whom almost 150 are medically qualified podiatrists.
Shuropody was founded by Managing Director Frank Duffy who has been involved in the manufacture and retail of footwear and general clothing since 1978. He previously spent four years as Group CEO of R Griggs Group which famously produced Dr. Marten’s shoes. Gordon Horsfield acts as Non-Executive Chairman and was previously Chairman of Drax Group Plc where he led the restructuring programme before listing the business on the London Stock Exchange in 2005.