In the
first instalment of this three-part series, we shared insights from the Australian Investment Council Champions of
Change leaders on the COVID-19 forced rapid adoption of remote working
practices within their firms. This second instalment provides insights on
how the Champions of Change have managed their portfolio companies and made
investments while working remotely and reinforces the message that flexible
working practices are here to stay. It also highlights how a diverse team
helps foster a culture of innovation and equips private capital firms in
managing challenges in creative ways.
Early in the pandemic, a
survey
of Australian Investment Council members cited the inability to travel
because of COVID-19 as the main hurdle for doing business and securing new
investments. However, views on travel restrictions have changed over the
past few months. Quadrant Growth Fund’s managing partner, Justin Ryan says
“At the start of this, people thought we wouldn’t be able to do
acquisitions, but that’s not true.”
This shift has come about from the realisation that face-to-face is no
longer critical. The Champions of Change have developed deeper
relationships with their portfolio companies during their response to the
crisis by finding new ways to work together remotely to develop new
strategies and strengthen their balance sheets. Adamantem Capital’s
managing director, Rob Koczkar says “We now have a richer, more connected
and focussed set of conversations, informed by real-time data.”
Whilst COVID has undoubtedly had a devastating effect on some businesses
and portfolio companies, it has delivered portfolio performance beyond
expectations for others. Allegro Funds’ founding partner Chester Moynihan
says “The portfolio performance is above where we thought it would be
pre-crisis.”
Mr Ryan says “COVID has seen a positive effect on our portfolio. We raised
capital in March, invested mostly in online businesses and most of them
have benefited.” Ryan cited the portfolio’s two latest additions, cloud
marketer Arq Group and smartphone mounting designer Quad Lock. And,
highlighted that the Quad Lock purchase was done with limited access to
management and without the ability to visit its plants in China.
The Champions of Change have had an innovative response to the pandemic
with their portfolio companies. OneVentures' co-founder and venture
partner, Anne-Marie Birkill said that “OneVentures' portfolio companies had
proven their ability to adapt and find creative ways to manage challenges”.
All the Champions of Change leaders strongly believe their foundations in
diversity are helping them weather the storm of the pandemic. As diversity
is a key driver of innovation, essential for growth. The diverse
perspectives of a team ensure innovative thinking and well-tested, robust
ideas. Ms Birkill says that “While companies in our portfolio prioritise
skills and experience in recruiting, they are cognisant that a workforce,
executive and board of directors with diverse views and experience will
help drive performance”.
More and more private capital firms are realising the benefits of diversity
to strengthen their teams and decision-making processes. Ms Birkill says
“I’m encouraged to see that emerging, and future leaders are seeking out
diversity. The practise of ‘recruiting in their own mould’ rightly belongs
to another era.”
To learn more about the Australian Investment Council’s diversity work
visit aic.co/diversity. And, stay
tuned for the final article in this three-part series on how the Champions
of Change have been raising capital and selling assets while working
remotely during the COVID-19 Pandemic.
You can read the third instalment of this three-part series here.