An experienced private equity manager with a track record delivered through a differentiated investment strategy.
The Private Equity business within BMO Global Asset Management, was established in June 2005 when the business was acquired from Martin Currie Investment Management. With over £1bn assets under management, the Private Equity business is a highly experienced specialist private equity manager with a proven ability to identify and access strong performing mid-market and prime managers. Our team manages a number of products at different stages of maturity and with different mandates but with certain common themes, such as a mid-market focus, primarily in buyout funds with the ability to pursue selective co-investments and secondary investments.
Our investors benefit from our track record, specialist industry knowledge, market research, fund access, disciplined investment approach and focus on long-term positive investor relations.
In addition, we aim to reduce our fund investors’ risks through the fund structures that we manage for them. Furthermore, our investors are relieved of the costly and time consuming exercise of directly monitoring investments and fulfilling reporting requirements which we perform on a transparent basis on their behalf. We cater to a variety of investor types from a number of different countries with specific investment needs, including government pension funds, institutional pension funds, insurance companies, endowments, private banks, family offices and individuals.
As well as managing our investment funds we offer bespoke services related to private equity portfolios. This may take the form of the assessment, restructuring or management of existing private equity portfolios or the implementation of customised private equity investment programmes based on specific client requirements, leveraging the experience and operations of our Private Equity team (‘the Team’).
Past performance should not be seen as an indication of future performance. Capital is at risk and investors may not get back the original amount invested.
BMO Global Asset Management is part of the BMO Financial Group, which has tens of thousands of employees. Our dedicated BMO Global Asset Management Private Equity team (‘the Team’) totals 10 team members and is shown below. Hamish Mair, Managing Director and Head of Private Equity, leads the Team, which has more than 160 years aggregate relevant experience.
Other colleagues within BMO Global Asset Management perform administrative accounting, legal, compliance, marketing and sales functions on behalf of the Private Equity business. This allocation of responsibilities permits the core Team to focus all its attention on proactive fund investment and management as well as investor relations, in an effort to continue to deliver returns and a high quality service for investors. The core Team’s skill sets encompass private equity investing, accountancy, corporate finance and the management of quoted portfolios. Our private equity activities date back to the early 1980s.
, BSc, MBA, ASIP
Hamish has 33 years of investment experience, over a quarter of a century of which is in private equity. He has been Head of the BMO Private Equity team since inception, when it was part of Martin Currie Investment Management, and throughout its ownership by F&C and now BMO. Hamish oversees all the fund vehicles that BMO Private Equity manages and, specifically, is lead manager of the London Stock Exchange listed BMO Private Equity Trust PLC. Hamish was a Director of Martin Currie Investment Management between 1996 and 2005, where his responsibilities included small companies and Far Eastern equities. Hamish is a graduate of Aberdeen University and Edinburgh University.
, BCom, ACIBS
Stuart has 25 years investment / lending experience, including 14 years in private equity. He joined the team in 2011 and is responsible for business development and investor relations. From 1995 to 2011 he performed relationship manager roles with Lloyds Banking Group, ING and RBS, based out of New York, Edinburgh and London. Stuart is a Director on the Board of LPeC. He has specific knowledge of the private equity fund, loan fund and project finance financial sector niches as well as the power sector. Stuart is a graduate of Edinburgh University.
Iain has more than 20 years of experience delivering financial advice and solutions to Canadian and US middle-market private equity funds and companies as an investor, lender and investment banker. He joined the private equity team in 2018 to help facilitate its North America expansion. Iain’s prior roles included: providing junior capital to private equity sponsored transactions and growth oriented businesses as a member of Royal Bank of Canada’s Mezzanine Finance team; and, leading a Canadian and US based team that provided debt, equity co-investments and fund investments to private equity groups as Managing Director & Head of North American Private Equity Coverage for a wholly owned subsidiary of The Bank of Nova Scotia. Iain is a graduate of the University of Western Ontario and the University of Toronto.
, BSc, CA, CFA
Andrew has 13 years of investment experience in private equity. He is a former member of the private equity team (2008-2013) and re-joined the team in 2018. From 2013 to 2018 Andrew was a Principal at Scottish Equity Partners LLP, a UK based private equity firm, where his responsibilities included the co-management of an energy focussed secondary fund. He is a chartered accountant and CFA Charterholder. Andrew is a graduate of Edinburgh University.
, BSc, BA, MArch
Charlotte has three years of investment experience. She joined the private equity team in 2013, supporting the team in both investment and marketing processes, and was promoted to Associate level in 2019. From 2010 to 2013 Charlotte performed a support role with Xerox. Charlotte holds a Master’s in Architecture and as part of her degree, she spent a year working for Architectus, an architectural firm in Sydney, Australia. Charlotte is a graduate of Dundee University.
, BCom, CA
Richard has 20 years of investment company experience, including 15 years in private equity. He joined the private equity team in 2006. Richard was previously corporate finance manager at Intelli Corporate Finance between 2001 and 2006. He trained as a chartered accountant with PricewaterhouseCoopers. Richard is a graduate of Edinburgh University and spent a year at the Gothenburg Business School in Sweden.
Adam has six years of investment experience. He joined the private equity team in 2018. Adam started his career at 3i Group plc, the listed global mid-market private equity investor, working as an Associate in their UK PE team where he was involved in origination, deal execution and portfolio management of UK assets. In addition, he also had experience in 3i’s European infrastructure investment and debt investing teams. Adam is a graduate of St Andrews University.
Jonathan has five years of investment experience. He joined the private equity team in 2018. Jonathan started at BMO Global Asset Management on the Investment Graduate Programme. From 2016 to 2018 he worked in the Systematic Equity, Multi-Strategy, Global Rates and Liability Driven Investment teams. Jonathan holds the Investment Management Certificate and is studying for the CFA. Jonathan is a graduate of Birmingham University and spent a year studying at the University of Illinois at Urbana-Champaign in the USA.
Anne has over 40 years of office management experience. She joined the private equity team in 2004. Anne is responsible for day-to-day administrative matters as well as client events. She also supports the team in investment reporting and marketing processes. Anne previously performed similar roles and functions at a number of other financial institutions, including State Street Bank, Gartmore Investment Management, Grant Thornton and Guardian Royal Exchange, in both Edinburgh and London, between 1979 and 2004.
In a lower interest rate environment and with lower returns from listed assets, private equity investments have the potential to reward investors with higher returns. Private equity can, however, carry higher risk than listed investments. This can be due to individual characteristics of private companies as well as the absence of a liquid market for these companies.
Our investment approach helps mitigate these risks through diversification. We recognise that investors want to access higher returns offered by the asset class, without sacrificing a significant portion of their risk budget.
Our solution is to assemble a distinct portfolio of carefully selected private equity investments, accessible to investors through an appropriate vehicle. Such a portfolio can contain numerous funds and/or co-investments, with many private companies as part of its underlying investments, thereby delivering a suitable level of diversification in order to reduce risk.
Our selection process emphasises multi-layer diversification to various portfolio features such as geography, fund manager, vintage year, industry sector, company size and type of deal (buyouts, development capital or venture).
Our established operation provides investors with access to private equity funds, where the single investor’s commitment may be too small for a specific fund to consider, or where the fund is closed to new investors due to outstanding interest as a result of past success.
We are likely to already have contact with such funds which makes access possible. At times, while a new investor may not have knowledge of specialist funds in a target market, we do this through our pro-active market screening.
Our active and established presence in the primary market also permits us the opportunity to take advantage of, after careful consideration, co-investments and secondaries opportunities thereby allowing us to further enhance returns for our investors.
Our Private Equity team (‘the Team’) implements a structured investment process. As part of this we continuously monitor the breadth of the market and have in-depth knowledge of private equity managers through our long-term involvement.
Our structured investment process allows us to target private equity investments that are well equipped to potentially deliver strong performance. The principal means of risk control we employ is through careful and measured portfolio construction. Each portfolio is constructed to achieve appropriate diversification. The precise allocation to individual funds and/or co-investments reflects our view on relative attractions of key geographies, fund managers, vintage years, industry sectors, company sizes and types of deals. The key steps of our primary fund investment process are outlined below. (NB: the investment process for secondary fund investments and co-investments are similar but different).
We originate dealflow through an active presence in the private equity market where we have been making investments for over a quarter of a century. As a consequence, our Private Equity business is exposed to substantially all the relevant lead managers in its chosen area of focus. A considerable proportion of the dealflow comes to us directly from managers. We keep the introducers and other intermediaries informed of our investment preferences. We also conduct regular searches of the trade literature and websites to ensure that opportunities are not missed. We pro-actively introduce ourselves to new private equity groups and maintain regular contact with longstanding groups. We routinely visit private equity groups forging links, often long before they are in fundraising mode. Unlike many, we have a willingness to take an educated risk on experienced but new private equity groups, so called prime (aka emerging) managers. We have no blanket prohibition on first time funds. We continue to select these as we have done successfully in the past. The Team has a background in direct investment in both private and public companies. This allows us to understand in detail the investment case for the underlying investment and helps us establish strong relationships with lead managers.
- Preliminary assessment: The Team will determine whether an investment opportunity is sufficiently attractive to justify a first meeting. We focus on the remit of the fund, the track record and the provenance and experience of the management team. We also take into account issues such as the ownership of the management company. The majority of potential funds fall out at this stage. Our screening process incorporates a clear list of requisites for prospective funds and an equally precise list of the characteristics of the funds to avoid.
- First meetings: The first meetings are conducted either in our Edinburgh, London or Toronto offices or at the offices of the private equity manager. After the first meeting the Team will have identified the key issues that underpin or undermine the investment case for the fund. It is usual that these require considerable further examination. The detailed documentation supporting the investment case is considered and initial referencing is conducted.
- Second and further meetings: Subject to the fund passing scrutiny on the above basis, a second meeting will be arranged. This is usually held at the manager’s own office and will last for most of a day. The objective of these meetings is to gain a deeper understanding of all aspects of the investment proposition, and allow us to meet substantially all members of the team. In these meetings we will aim to understand where the manager adds value in sourcing and executing investments. It is usual for fund investments to require a third or fourth meeting. This will also include, where possible, a meeting or discussion with investee companies.
Once the due diligence meetings have been completed an investment proposal paper is prepared. This will contain all the key elements of the investment case. It also contains an analysis of the strengths and weaknesses of the proposition. The paper contains a balance between quantitative and qualitative material. The features of the investment proposal are not scored or rated numerically. This is principally because different issues or factors have different weights in the decision making process for different funds. The investment paper is then discussed at an investment committee meeting with the sponsoring executive leading the discussion. The decision to proceed, or not, is then taken.
Our differentiated investment strategy has helped us deliver a track record for the benefit of our investors.
Our Private Equity team (‘the Team’) currently manages a number of private equity products and programmes on behalf of a number of investors. The Team applies a differentiated investment strategy, incorporating the following key elements:
Although we do not manage sector specific funds, we do invest in specific investment themes where we believe growth is underpinned by sustained and significant factors. By way of example, one such theme is climate change. The corporate sector, which is already assessing the risks of climate change to its business models, is starting to rise to the challenge of finding solutions. As an investment theme climate change is universal in relevance, unprecedented in scale and sustained in longevity. The challenge of climate change is matched by an opportunity for the evolution of products, services and markets linked to mitigation and adaptation. Our focus is primarily on deals and funds that would meet our normal criteria with the additional overlay of the climate change theme. We are not departing from our primary expertise, which is in making private equity investments, rather we are combining this expertise with that of our in-house Responsible Investment team to harness their more than three decade expertise in climate change policy and regulation – this allows us to sensibly seek to capitalise on the present climate change themed investment opportunity for our investors.
The Team has been investing in the European and North American private equity markets since the 1980’s and has also built some exposure to Emerging Markets. The Team screens a global dealflow, seeking out investment opportunities where the deeper knowledge of local managers allows for potentially enhanced returns. In all the products that the Team manages, careful consideration is given to ensure the geographic remit matches the proposed underlying strategy.
The Team focuses on investing in private equity funds and selective co-investments in the mid-market. The core of this market is represented by companies with an enterprise value up to €500m. There are thousands of good quality private companies in this size bracket, which are increasingly receptive to private equity.
In this tier of the market, competition is less intensive and experienced private equity investors are able to invest at prices which are highly attractive by international standards and where the prospects for earnings growth are excellent.
The Team deliberately includes a significant component of prime managers within its portfolios. We define prime managers as experienced and motivated private equity investors raising either Fund I, II or III (irrespective on nomenclature). These private equity groups have considerable experience within their teams but are not yet brand names. Our Private Equity business has a track record of successfully identifying private equity fund management groups at a formative stage in their development. The strong alignment of interests between manager and investor has led to excellent returns. The Team has backed various prime managers over the years and as private equity markets continue to develop, new management groups appear. These management groups typically have the following characteristics:
- Experienced with track records: Prime management teams come together for a number of reasons – they may come together from other firms or are looking to raise their first external fund having previously been captive managers. We look for teams comprised of experienced individuals who have strong attributable track records from their previous private equity roles.
- Focused on the mid-market: These teams are often setting up for the first time under their own banner having established a strong network of contacts at a local level in the mid-market.
- Motivated to succeed and closely aligned with investors: We look for teams that are motivated to succeed both from a reputation and financial standpoint, with the reward spread fairly across the team. We believe it is important for managers to be incentivised to generate good absolute returns, thereby aligning the interests of the manager with the investor.
- Smaller, more cohesive teams: These teams usually possess complementary skill sets and work closely with each other. We believe that prime managers play a much larger part in the success of their own firms and are therefore typically more strongly motivated to work together as a team for the greater good of the whole.
- Appreciative of early backers: Prime managers are generally looking to expand their investor base and are grateful recipients of small and medium sized commitments, which, in our experience, provides a good source of attractive co-investment opportunities as well as continued access to later funds even if they are over-subscribed.