Profile - Xavier Woodward

FEW budding accountants would have relished life in St Petersburg during the topsy-turvy days of the early 1990s.

At the time, Russia was no place for the faint-hearted, or those with a passion for order and neat balance sheets. The Berlin Wall had gone, but calm and economic growth were in short supply, to say the least.

Boris Yeltsin had been forced to hop on a tank to send hardline Communist plotters packing in the summer of 1991, and, when Xavier Woodward arrived the following year, it was hardly the calmest place on the planet.

But where there’s real estate, even in a country emerging from Communism, there’s brass.

Mr Woodward arrived as a student from, Merton College, Oxford, and fell in love with Russia. He liked it so much, he took the bold step of setting up a business there.

The lessons he learned in the chaotic post-Communist world are helping him to make investment decisions in his new role at Isis Equity Partners. These insights could bring jobs to Yorkshire.

He recalled: “I spent a year in Russia as part of my university course. Initially, I went to Moscow and attended the university there. Rather than go to France, which had been my original plan, for the second half of the year, I decided that I liked Moscow so much that I went back on spec.

“I managed to get myself a job setting up a real estate business in St Petersburg, which was fantastic. It was a lovely city and it was really exciting being in Russia when everything was changing.

“My parents would ring me up having seen Russia on the news and they would, by turns, be excited or worried about what was happening.”

St Petersburg’s fortunes had reflected the ebb and flow of world history. The former imperial capital of Russia had changed its name twice – to Petrograd and Leningrad – over the previous century. In 1992, the Russian economy was on its knees and food rationing had been re-introduced.

Mr Woodward recalled: “I learned a lot about how difficult it is to set up a business. It was interesting seeing a number of people struggle with new found freedoms. A lot of people relished having the ability to do pretty much what they wanted. Some people took that too far. It was a real awakening for lots of people.

“Partnership is a really strong word with Isis. You need to have some empathy with the management teams and how they might be looking at life, which might be different to you.

“That understanding has been helped by spending a year in a very different culture.”

Two decades after his Russian adventure, Mr Woodward is hoping to make significant investments in Yorkshire’s financial services and technology sectors on behalf of Isis Equity Partners.

Although he’s based in Isis’ Manchester office, he lives near Leeds and has deep-rooted ties with Yorkshire’s business community. After graduating from Oxford, Mr Woodward trained as an accountant and spent 13 years as a corporate finance adviser at Societe Generale and KPMG. Last year, he decided it was “time to stop advising and start doing”. The move to Isis seemed a natural one. Since 1995, Isis has invested in more then 100 unquoted UK businesses, and currently has £658m funds under management.

The Isis portfolio includes the wine importer Enotria, and the online retailer gettingpersonal.co.uk.

Mr Woodward helped to bring jobs and investment to Yorkshire last year, when Isis announced an investment worth £42m in technology provider the Onyx Group, in conjunction with the Onyx management team.

As well as funding the £27m purchase price, Isis committed a further £15m to fund strategic acquisitions.

Last year Onyx had three staff at its Sheffield site, but it is expected to expand.

“We are currently looking at helping the business with a substantial investment to expand that (Sheffield) data centre,’’ Mr Woodward said. “It’s poised to grow very strongly, because it’s in easy reach of the business centres of Sheffield and Leeds. We’ve got great hopes for how that will benefit the local economy. We feel the way to do good deals is to spend a lot of time developing relationships with management teams and businesses.

“Isis invests across a number of sectors. The key theme is that they are businesses that have the ability to scale up and protect their margins while they are doing so. That usually means they are doing something better or different from the competition.

“We don’t invest in a ‘me too’ business.”

The private equity market has been relatively quiet of late, and much of the focus has been on deals with eye-watering debts attached that were completed during the boom years.

Isis aims to calmly invest in good long term bets, according to Mr Woodward.

He said: “Some of the large buyouts have hit difficulties because of the levels of debt. We’ve always been pretty cautious when it comes to leverage.

“When you’re investing in a business that’s going to grow, it might have a greater working capital requirement. It might need to recruit new people and move to new premises.

“The last thing you want to do is constrain a business by putting an enormous weight of debt around its neck. We’ve had a pretty good experience within our portfolio, over the past few years, because of that cautious approach. That remains a key part of our deal structuring philosophy.”

So where are we likely to see deal activity this year? The financial services sector has taken a kicking, but, it seems, there are strong investment opportunities out there.

“Isis is not going to invest in a bank, or an insurance company, but the banks and insurance companies and building societies in Yorkshire have spawned a whole range of businesses around them to help distribute products and services,” said Mr Woodward. “There are a lot of really great businesses and management teams in that financial support services arena. I’m really keen to put some of our clients’ money to work investing in those sorts of quality businesses.”

Apart from his stint in Russia, other aspects of Mr Woodward’s CV suggest he was hardly a dour student, with his nose in a ledger book.

He recalled: “I was the guitarist in a band called the Electric Penguins who made one or two appearances in Halifax in a pub called The Star which has recently been demolished. I don’t think there was any connection with the fact we played there!”

Before the year is out, Isis could announce Yorkshire investments that will bring hope to parts of the economy that have been reeling from the long-term effects of the credit crunch.

Xavier Woodward Factfile

Name: Xavier Woodward

Title: Investment Director, Isis Equity Partners

Date of birth: September 28 1972

First job: I worked as a real estate agent in St Petersburg

Education: Bradford Grammar School and Merton College, Oxford

Favourite song: The Boxer, by Simon & Garfunkel

Favourite holiday destination: Ireland or France

Favourite film: Jesus of Montreal

Last book read: Skippy Dies by Paul Murray

Car driven: VW Passat Estate

What is the thing you are most proud of? My family