Tom Rowley of NorthEdge is keen to invest in Yorkshire businesses that aim to leave their mark on the global stage. Deputy Business Editor Greg Wright reports on his plans to back ambitious management teams.
IN the face of Brexit uncertainty, business leaders are simply rolling up their sleeves and looking for the next challenge.
While the political chaos continues, Tom Rowley, the director of private equity house NorthEdge’s Yorkshire office, is calmly looking for new investments.
In particular, he is enthused by the prospects for the renewables sector. Firms involved in providing support services for the booming offshore wind industry, for example, might well come on to his radar.
The Leeds University graduate is proud that NorthEdge has boots on the ground in Yorkshire. There is no substitute for local knowledge, especially when you are forging long-term relationships.
NorthEdge manages more tha n £650m of private equity funds which are aimed at lower-mid market buyouts and development capital transactions. It is looking to invest between £2m to £45m in each business it backs, and the seven-strong team in NorthEdge’s Leeds office is constantly looking for new opportunities.
Last year, NorthEdge Capital supported the management buyout of engineering tooling supplier Cutwel Limited, which is based in Cleckheaton, West Yorkshire. Other Yorkshire firms that have flourished with NorthEdge’s help include the Keighley-based stairlift designer and manufacturer Platinum Stairlifts and the cloud services specialist iPortalis.
NorthEdge also played a major role in developing Sheffield-based Sumo Group, which has become one of the UK’s largest providers of creative and development services to the video games and entertainment industries
Mr Rowley said: “What I would like to see is that we continue to invest and back really strong management teams across the region. We would like to deliver two to three new investments this year and see those investments really succeed.
“We are trying to back local management teams who have national and international ambitions.
“We’re backing teams who will lead in the UK and also on a global basis. That’s really important for all of us at NorthEdge.”
He believes firms like Cutwel, which specialises in supplying precision cutting tools and machine accessories to the engineering industry, will help the region compete on a global stage.
He added: “The Cutwel team has really embraced private equity ownership and it’s been great to see them really developing the rest of the team.
“There is a strong senior management team in place but they have really developed a second tier of management there. There’s a real alignment across the business in what we are trying to do there.”
He added: “At Cutwel every member of staff is trained up to provide technical advice on the product that they sell.
“This is critical for their customers because they are mainly selling into the SME (small and medium-sized) engineering market. They really do need that technical advice alongside the product. They are also able to provide next day delivery for the majority of the orders they receive.
“That’s a reflection of the fact that we have invested a lot in the stockholdings of the business, since we invested back in May.”
From a handsome office in Park Square South in Leeds, Mr Rowley leads a team with its finger on the corporate pulse.
“The Leeds team all live in Yorkshire,’’ he added. “We’re very much focused on supporting the local region. The three investments we have made in 2018 were Yorkshire-based; Platinum Stairlifts, Cutwel and iPortalis
“We passionately believe that as local investors, we should be supporting the local economy. With the jobs that are created in the investments that we make, we feel there is significant value being generated.
“We’re very much a growth investor. We’re backing companies that have delivered a platform. We’re looking for opportunities to back management teams who have real growth ambitions going forward. What I am passionate about is seeing those businesses succeed.”
He is particularly proud of the AIM (Alternative Investment Market) listing of Ramsdens Financial, the diversified financial services provider, which NorthEdge originally backed in 2014.
He said: “We’ve seen it go on to greater things. We helped to float that business on the AIM stock market back in 2017 and the business has doubled in value since it’s been on the stock market.
“That’s great to see, because we are looking to create sustainable long-term businesses. We are not looking to asset strip. We are looking to build something that’s going to be here for the long term.
“That’s the same thing we are trying to build at NorthEdge. We’re looking to build NorthEdge into a long-term sustainable business.”
NorthEdge is actively seeking firms to support in a range of sectors.
He added: “We’ve recently been looking at a number of technology related businesses. That is a particular area we are keen on. We’ve had success in the past with the likes of Sumo Digital. That has given us real insight into the gaming industry, which is particularly hot at the moment. Through our experience at Platinum Stairlifts, we are also looking at healthcare as well. But we also have a real focus on manufacturing.”
But has the Brexit uncertainty affected sentiment?
“Undoubtedly, there is a bit of caution,’’ he said. “You’ve seen foreign investment perhaps reducing. At a local level, from our perspective, we do see there are opportunities with Brexit.
“We have taken the opportunity at Cutwel, for instance, to invest in our stockholdings with support from our suppliers.
“We feel that is giving us an advantage, over some of our competitors who may not have the resources to be able to make that investment.”
But he added: “At a macro level, it’s not helpful to have that level of uncertainty.
“However, when we are looking at the businesses that we are backing we’ve got management teams who are leaders in their particular sector.
“We’ve got great teams. We feel the teams we are backing should be able to outperform the market.”
Title: Director, head of Yorkshire and North East for NorthEdge, the
private equity house. He is responsible for leading a
team which has invested in a wide range of Yorkshire businesses.
Date of birth. September 24, 1977
Education: Leeds University
First job: I worked at Mueller – stacking yogurt pots
Last book read: The Tattooist of Auschwitz
Car driven: BMW
Favourite film: Point Break
Favourite song: Sweet Child of Mine by Guns N’ Roses
Favourite holiday destination: Cornwall
What is the thing you are most proud of? My family