Private Equity FAQs
Your Questions.
Answered
Every private equity deal is different – so you’re bound to have some questions. Get to know private equity firm LDC better here too. Take a look at our most frequently asked questions below.
What is The LDC Top 50 Most Ambitious Business Leaders programme?
The LDC Top 50 Most Ambitious Business Leaders is an SME business leaders awards programme. It’s run by LDC, in partnership with The Times. The programme aims to uncover and celebrate the UK’s most ambitious entrepreneurs. It champions tales of ambition, inclusion, sustainable impact and international growth. Those profiled are the driving force behind growing businesses from every sector and region of the UK economy.
What is the difference between The Top 50 and LDC’s portfolio companies?
Our portfolio are companies that we have invested in to support their growth plans. The Top 50 is a way to celebrate ambitious business leaders outside of the existing LDC portfolio. Those who are committed to making a bigger impact in everything that they do.
What is the time commitment for entering?
As part of the selection process, shortlisted candidates will be invited to attend a 45-minute meeting (which can take place via video call or in person) with The Top 50 research team.
Successful candidates will then be invited for a 45-minute interview with one of The Top 50 editors, ahead of their profile being published in The Times in October. There will also be celebratory in-person events taking place.
Meet The LDC Top 50 Most Ambitious Business leaders 2023 here.
What are the individual awards categories?
There are a range of individual awards categories, these include:
- The Most Ambitious Business Leader will recognise the leader who best defines the ambition and leadership qualities needed to succeed in business today.
- The ESG Award will recognise the leader who has created a business that is driven to contribute towards a more sustainable future.
- The People First Award will recognise a leader with a clear mission to support people and to create a more equitable and inclusive society.
- The International Ambition Award will recognise a leader’s ambition and success in expanding operations or sales overseas.
- The Trailblazer Award recognises the business leader who is disrupting their market and shaking things up.
- The Rising Star Award will recognise a leader making great strides in international growth, sustainability, and people – yet they still have so much potential for further development.
- Highly Commended: One to Watch will recognise the leader who is the driving force behind a business destined for great things in the future.
- The Alumni Award will recognise a previous Top 50 leader who has gone on to achieve great things.
What are the criteria for being included in The Top 50?
To qualify, nominated candidates must:
- Be the founder, managing director or CEO of a UK-headquartered, privately-owned business.
- Demonstrate a clear vision for their business and a deliverable plan for achieving their goals.
- Evidence a strong track record through year-on-year revenue growth (no financial data would be published without the business’ consent).
- Be leading a profitable business, with an annual turnover of up to £50m.
Can I be nominated in The LDC Top 50 if I have been included before?
If you have been included as one of The LDC Top 50 Most Ambitious Leaders previously, then you are not able to appear again, you will be considered each year for our ‘Alumni’ award.
However, if you have been previously named as a One to Watch, then you are able to nominate yourself again.
What is the investment criteria for LDC?
We’re always looking for ambitious business leaders to partner with. Based on our investment criteria, we tend to make an initial investment of between £10m and £50m in each of the companies we partner with. And we have up to £100m available for every partnership – so we’re able to support your growth strategy with follow-on funding in the long term.
Our investment criteria:
* An exceptional and committed management team
* A UK-headquartered business in any sector
* A clear and ambitious growth strategy
* A track record of year-on-year growth
*Actual or forecast profits of at least £1m per year
Please do get in touch and talk to us about how we could work with you.
My business didn’t grow in its last full financial year, but is growing in the current financial year – can I still enter the LDC Top 50?
Yes. The requirement is that the business is experiencing year on year growth at the time of entering.
My business isn’t UK based – can still enter?
Businesses are required to be UK-based in order to be eligible for these business leader awards.
My business is a UK based subsidiary of an overseas parent company – can I still enter?
Yes, as long as the subsidiary business is registered in the UK and files accounts here.
My business is a listed company – can I still enter?
We’re looking for business leaders running privately-owned companies.
I’m in the leadership team but not the CEO or MD – can I still enter?
We’re looking for nominations from the person ultimately leading the organisation.
I’m in a joint-leadership role – can we both enter?
Yes, we will consider Top 50 entries from candidates in joint leadership roles, either individually or jointly.
I’m nominating someone else for the Top 50 business awards – when do they find out that they’ve been nominated?
Candidates nominated by a third party will be contacted by our team after a nomination is made to ensure they’re happy to participate.
I don’t want the business leader I’m nominating to know their nomination is from me – is this possible?
No. I’m afraid due to data regulations we need to be able to confirm who has submitted the nomination.
I’m nominating someone else but can’t provide some of the information – is that ok?
We only request basic financial information on the company the leader runs so hopefully this won’t be an issue. Like many corporate awards, the figures will be treated confidentially and confirmed by the business leader, so please just provide an estimate.
What are the awards judges looking for?
Judges will be looking for individuals with a clear vision for their business, a deliverable plan for achieving their goals and evidence of a successful track record to date.
For guidance, your nomination may want to include detail on the vision, evidence of plans to support it and information on the leader’s successes to date.
Can I include supporting materials?
We’ve deliberately kept the nomination process simple. If you are shortlisted, you can provide additional supporting materials to help with the profile that will be created.
Do you need photography?
We will contact you requesting photography if you’re shortlisted.
Do you need a copy of our accounts?
We request basic financial information on your company as part of the nomination process, but this will not be published without your permission. This can be provided in writing or by submitting the relevant figures within your nomination. You can of course provide proforma trading figures to evidence growth.
What is the LDC Top 50 shortlisting process?
As part of the selection process, shortlisted candidates will be invited to attend a 45-minute meeting (which can take place via video call or in person) with The Top 50 research team. This is to discuss details of their nomination for the leader awards and their ambition in more depth.
Successful candidates will then be invited for a 45-minute interview with one of The Top 50 editors, ahead of their profile being published in The Times in October. At this point, successful candidates will also be asked to supply high-res photography and a company logo, and once drafted, all candidates will be sent their profile for a fact check prior to publication.
Are people ranked?
No, this is a chance to celebrate ambition – it is not a ranking.
Do I get the chance to approve my profile article?
The article will be based on information you have provided about you and your business, will be positive in nature and will be prepared by an experienced and well-respected journalist.
After the interview, we will provide copy for fact checking only. With 50 articles to produce we don’t have sufficient time to make stylistic amends, but all candidates will be given 24 hours to advise on any factual inaccuracies.
How are the winners chosen?
Our judging panel will review the shortlisted candidates to decide the individual awards for business leaders.
These will be announced at our celebratory events and reported in The Times.
There are a range of individual awards, including the coveted ‘Most Ambitious’ along with an ‘ESG Award’, ‘People First Award’ and ‘International Ambition Award’.
Why do you want to meet me during the nomination process and what do I need to prepare?
Shortlisted candidates may be contacted to ask if they’d be happy for us to meet them during the nomination process. This will help our team build up an accurate picture of the candidate and explore their role, success and business. It’s a short, informal meeting and no preparation is required.
What if my question isn’t answered here?
Please contact the team at Top50@ldc.co.uk and we’ll get back to you as soon as we can.
How much does LDC invest in a business?
LDC usually invests between £10m and £50m in each transaction but we are flexible – with up to £100m available for each company. This means we can continue to support businesses with follow on funding throughout the life of the partnership.
Find out more about how LDC can support your business growth ambitions with capital and expertise.
What types of private equity deals does LDC do?
Every private equity deal is different – the type of deal that is right for you depends on your business’s strategy and objectives. LDC can work with you to structure a private equity investment that suits you – whether as a minority or majority investor in a management buyout, secondary buyout, development capital or carve out.
Find out more about the different types of private equity deals.
Which sectors does LDC invest in?
We have partnered with over 650 management teams across all sectors of the UK economy – including healthcare, retail & consumer, technology. media & telecoms (TMT), industrials, financial services, support services, travel & leisure and construction & property.
Find out how we have helped businesses in your sector grow.
How does LDC add value as a private equity partner?
Working with private equity firms helps to bring additional value, for example non-executive directors joining the board of a business. At LDC, we also provide access to our Value Creation Partners (VCP), who can help you identify pressure points and growth opportunities across your business – in areas from sales and marketing to procurement and working capital.
Discover more about how LDC can add real value to the businesses we back and meet our Value Creation Partners.
What is it like working with LDC?
You will be in good company. Over 650 management teams across the UK have chosen LDC’s flexible approach to private equity over the past 40 years. Every one of those growth journeys is different but they all have two things in common: ambition and partnership. We will get to know you and your business, backing you to achieve your business ambitions.
Find out more about working with LDC.
How long will LDC be invested for?
As part of Lloyds Banking Group, we are not like other mid-market private equity firms. We don’t have to focus on fundraising. Nor do we have a set fund cycle. So we can be more flexible, supporting you through ups and downs.
Some of our tenures have been less than a year and some have been for more than ten years – whatever happens, we will support until it’s right for everyone involved to proceed with an exit strategy. And we often stay invested after that.
Find out more about LDC here.
What is a private equity investment and how does it work?
Private equity funding is the injection of capital into a business in return for a minority or majority stake in the business. This capital – plus the private equity company’s operational expertise – enables the portfolio company to increase in value, deploying a variety of growth strategies.
Find out more about private equity. Or discover why LDC is very different to other private equity houses.
Why choose private equity investment?
Private equity can enable a change to the ownership structure of a business. For example, if the business owner has reached a stage in their career where they are looking to take a step back, de-risk and realise some of the value they have created.
Most importantly, businesses backed by private equity can grow faster than companies that access capital by other means – thanks to the combination of funding and strategic input from experienced partners.
To find out how private equity has helped businesses in your sector, read our case studies.
What do private equity firms look for in an investment?
Every private equity company will have its own investment strategy. A traditional approach requires the business looking for investment to have a steady and reliable cash flow, strong track record and a clear future growth path. LDC takes a management-focused approach, supporting those leading an organisation – and backing their knowledge, expertise and ambitions.
You can find out more about LDC’s investment criteria here.
How do private equity firms add value?
The role of private equity is to work in partnership with business leaders to build scale and value. Together, they can supercharge the growth of a business, through making business improvements, organic growth, acquisitions or international expansion.
Working with private equity firms can also bring additional value, like access to experienced business advisors or non-executive directors joining the board.
Discover more about how LDC can add real value to the businesses we back and meet our Value Creation Partners.
How can private equity fund new business growth?
Private equity investors help management teams map out and execute growth strategies. Each company’s opportunities are different and investors shape their approach accordingly. It could be making acquisitions, launching new products, building new manufacturing facilities, breaking into new sectors or expanding overseas.
Due to LDC’s unique funding structure, we have up to £100 million to invest in each of our portfolio companies. We are able to provide follow-on funding to back further expansion – whether that’s capital to finance a bolt-on acquisition or the development of a new facility.
Find out how a private equity investment can support a variety of growth strategies or read LDC’s Head of New Business John Garner’s article ‘How private equity can help you to grow your business’.
How can I buy a competitor or acquire another business?
Private equity can help support a buy and build strategy to help businesses expand, diversify or consolidate market leadership. This extends beyond the capital to purchase a business and includes significant mergers & acquisition (M&A) expertise to help integrate the acquired business.
LDC can help identify, acquire and integrate suitable businesses. We supported 35 acquisitions across our portfolio in 2020, plus two thirds are on a buy & build growth journey.
Read our buy and build case studies to see examples.
How does the private equity investment process work?
Every private equity deal is different – but there are a number of common stages of the deal process. The right private equity partner will work with you to make sure the process works for you.
You can find out more about LDC’s private equity investment process here.
Is it better to get corporate loans than private equity?
A loan through a bank or corporate lender can provide you with capital to grow your company. A private equity partner can also provide you with advice, insight and experience alongside the money you need to see your visions become reality.
Find out more about the benefits of working with a private equity company in our guide to private equity.
What is the difference between private equity and venture capital?
The distinctions between private equity and venture capital funding are often misunderstood. While both options offer cash and expertise to drive growth, the scale of investment and methods of working have a clear difference.
Private equity firms tend to back established companies with a strong track record – demonstrating consistent growth and profitability, with a proven management team at the helm.
Venture capital funding specialises in start-up and early stage businesses, often operating in high-growth sectors such as technology and fintech.
Find out more about how private equity can support you and your business.
What are the main private equity exit strategies?
There are three typical exit routes for a private equity company:
• IPO or flotation – where the company offers its shares for sale on a public stock market, often with the private equity partner continuing to hold shares
• Trade sale – sale of the company’s shares to another company, likely to be a larger corporate in a similar industry
• Secondary buyout – the sale of the company’s shares to another private equity firm
Read more about how LDC can help you prepare for an IPO.
What are the advantages of private equity investment for your company?
Private equity helps you open up growth opportunities without losing control of your business. For example, a management team might want to raise funds to allow the existing owner to take a step back, or to expand or diversify the business.
With private equity, as well as getting the capital that you need, you’ll also be backed by experienced business partners.
Hear from LDC-backed CEOs on how the private equity experience has helped them achieve their ambitions.
Is private equity worth it and right for me?
Private equity is a big step for any company and business leader. But it can be a catalyst to help you transform and grow your business – with financial benefits for all shareholders.
Read some private equity success stories here.
How is a private equity transaction structured?
A private equity investment is typically a medium to long-term investment in your company. Giving you a capital injection by acquiring ordinary shares and/or making loans to the company.
There are various ways in which a deal or transaction will be structured. Each company’s needs and ambitions are unique, so the deal needs to be tailored accordingly.
Speak to an expert to find out what your private equity journey could look like.
How do private equity companies finance their buyouts?
Many private equity firms generate capital through funds and large institutional investors – including pension funds, insurance firms and banks.
LDC has a unique funding structure. As part of Lloyds Banking Group, LDC does not need to fundraise due to ongoing funding from the bank. This allows us to deploy patient capital, working to the timetable of our portfolio businesses.
Find out more about the benefits of LDC’s unique funding structure.
What legal agreements and documents are needed in a private equity deal?
The main transaction documents needed for a private equity deal are usually:
- Share Purchase Agreement – governs the acquisition of the company’s shares and the consideration paid
- Shareholders’ Agreement – governs the relationship between the shareholders
- Debt documents – facility agreement, security documents and any inter-creditor agreements
- Plus a range of ancillary documentation
Read more about the elements of a private equity deal in our jargon buster.
How do you choose a private equity firm?
The right private equity partner can enable business owners to supercharge the growth of their company – while they continue to run it and realise some of the value they have already created.
There are many different types of private equity house with different investment strategies and styles, including how actively involved they are in the management of the business. It’s important to explore the options to help you decide on the right kind of private equity partner for you and your business.
Find out more about what makes LDC different to other institutional investors.