A new name may be the most obvious of changes, but behind the doors of 10 Bedford Street it’s been an eventful year all round. Informer finds out more
The thing that regular visitors to the first floor of 10 Bedford Street in Covent Garden will notice
straight away is the firm’s new name, August Equity, in contemporary blue script. But this is only the most public aspect of a number of developments for the mid-market private equity firm. Having totally severed ties with its former parent, German bank Dresdner, the firm now has a new ownership structure and has attracted two of the leading investors in European private equity into its fund.
There has been uncertainty over the ownership since 2001, when Allianz took over Dresdner, the fund’s largest limited partner and a joint venture partner in the management company. Dresdner subsequently publicly stated its desire to move out of private equity and had to unravel its complex private equity holdings, which included a large fund-of-funds operation, teams managing direct investments and the Kleinwort Capital joint venture.
“We came to an agreement over the management company position very quickly under provisions that had been included in the original joint venture,” says Richard Green, joint managing director of August Equity. “There was a considerable amount of interest over the fund position, from many limited partners.” The fund has been performing well, with recent exits including health and wellness group Sona and Vivista, a provider of communications platforms to the emergency services.
“Dresdner agreed with us that the best thing would be to replace them with two or three high-quality investors who had both primary and secondary capability,” says Green.
With specialist boutique Newgate Partners, led by David Morton, assisting on the sale and managing the information flow, the firm was able to attract two of the most respected investors in private equity: Switzerland-headquartered Partners Group and global asset manager F&C.
The track record is, of course, a crucial component, but today’s sophisticated investors dig much deeper. “LPs are much more sophisticated nowadays. They take it very, very seriously and don’t just take what you say at face value. They do a lot of research, reference checking, talking to investee companies, to chairmen, to advisers, and they spend a huge amount of time with the team, meeting each member individually,” says Green. “They look very closely at processes, at deal origination, risk analysis, at how we manage our work in progress, how we conduct due diligence, what monitoring systems we have for portfolio companies.”
“The performance of the fund to date has been great, but that’s only part of the story,” adds joint managing director Andrew Hartley. “They are investing in the team and the future strategy.”
The squaring of these positions and Dresdner’s decision to hold on to the Kleinwort name led to the change of identity. “We’ve been through the process before, and with a number of portfolio companies, so we wanted to make sure we did the job properly,” says Green.
To manage the process, Green and Hartley brought in consultant
Suzy Wayne, an experienced private equity marketing director. “Branding for private equity companies is no longer about just putting a logo on the door,” says Wayne. “It’s about actively integrating the firm’s corporate communications. Properly executed, it can be a real investment in the business.”
For Green, it goes back to the origins of the business: “The philosophy we had when we started Kleinwort Capital was that we wanted to build a business, not just raise a fund and invest it. Brand and marketing are core parts of any business. We expect our portfolio companies to do it, so why should we expect anything less of ourselves?”
While there was a need for a new name, the team was keen that the investment in marketing and communications – and the differentiated position that had created – was not lost completely. “We wanted a fresh identity, but we did not want a complete rebranding,” says Hartley. “We wanted a bridge between our heritage and the new identity. We have not changed our strategy.”
More than you might expect. The choice of name is crucial for any company: it takes planning, time and a lot of thought. The new name – August Equity – has been a year in the making.
Last April, Richard Green and Andrew Hartley turned to ANDesign, whom they had worked with on the original Kleinwort Capital branding and design. “We had two half-day sessions, obtaining as much information as we could about what they wanted to achieve, gauging their mission and values,” explains David Norton, executive creative director at
AND. “We applied creative intelligence to produce a brand that can communicate across all items and media.”
There were a number of goals. The brand had to imply longevity, stability, trust and security.
Brainstorming produced a list of words that convey the DNA of the firm: success, growing, contemporary, progressive, positive, momentum, inclusive. On top of that, it had to be a real, English word. AND’s creative thinkers got to work, drawing up a list of 60 names and the rationale behind them. This was whittled down to 15, then seven, before a shortlist of three (with full registration searches already completed) was compiled. Mock designs and the different names were circulated around Bedford Street and, in the end, the decision was unanimous.
The word, according to AND, inspires awe, majesty, harvest, reward, sun and hope. All the planning had paid off: from the clean typography, to the natural colours and sun logo, to the name itself, August Equity makes a statement. “Brand is really important,” says Norton. “Brand is recognised as an essential part of any business toolkit. If you do not take it seriously, it says a lot about your business.”
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