Cordovan Capital Management: Bridging the gap between private equity and UK SMEs

Cordovan Capital Management’s mission is to bridge the supply-demand gap between UK small businesses and private equity capital. We see firsthand, and daily, the social and economic benefits this mission brings to bear: private equity investment that stimulates innovation, spurs growth, effects the orderly ownership transition of profitable enterprises, and promotes good governance. With cause and effect intertwined, the net result is typically the creation, expansion, and/or safeguarding of good profit and good jobs.

In our portfolio, we see the development of sub-sea pipe-cutting technology that is as pioneering as it is globally applicable (Decom Engineering). We also see the creation of advanced architectural surface coatings that have the potential to transform our notion of what we clad our large buildings with (Powdertech). We see small, growing businesses offering real solutions to real problems, from addressing the carbon emissions of commercial vehicle fleets via advanced telematics (Cubo), to persuading factories and warehouses across the country to upgrade their lighting systems to environmentally friendly, cost-effective LED-based systems (Cema Lighting).

But private equity investment and ownership does more. UK SMEs may be the foundation of the UK economy, but their value creative objectives are often deeply absorbed within their product/market visions, in a manner which can neglect social and environmental considerations, and wider issues of good corporate citizenry. The clarion-call ESG challenge put to small business management teams by private equity partners is, in our experience, resoundingly well-received and well-actioned.

As Northern Ireland’s first PE general partner, the journey to becoming this conduit has not been easy. Developing institutional processes, safeguards and systems, honing best practices, and of course persuading LPs to deploy money into our asset class has been a tough journey.

The BVCA has been a fantastic resource, sounding board and guide for us along that journey. The team has signposted us to everything from service provider counterparties with whom we now do business, to key industry developments of which we should be aware, to ideas on how to develop and challenge ourselves as a capital manager via publications, conferences, and training.

Ours is a broad and vibrant asset class with as many iterations and strategies as there are general partners. The BVCA is a broad and vibrant church that superbly represents and advocates for not just those managers and their investors, but also the huge number of wider stakeholders who participate in the good that this asset class can do. The team at Cordovan Capital Management are therefore delighted to celebrate the BVCA’s 40th birthday, alongside the wider private capital community.

Daniel Anderson
Chairman, Cordovan Capital Partners II

This article was originally published on 18 August 2023 on the BVCA website.