Leadership, Business and Innovation Podcast: Private Equity

And so what made you actually make the decision to, um, go for private equity funding or an external investor funding in the context of ophthalmology? And why did you think it was not, uh, possible to do it without them?

Yeah, that's a good question.

I think there are a variety of different reasons, um, and in no particular order.

Um, the first is the, the executive who essentially run the, the clinic, and, and, you know, Laurence can, you know, jump in here or, or say what he thinks, you know, when he, when he, when he comes on in a moment.

But m- many of the kind of exceptional people who are now running OCL Vision, like Nick Rudge, our CEO, Darren Millington, our CFO, um, you know, right through our, our head of operations, uh, head of marketing, you know, these are, like, highly driven, ambitious, highly capable people, and they are excited by private equity-backed organizations because- Their abi- the ability that they have to, um, create something of value, not just within the business, but for themselves as well, is much greater than it would be in an organization that isn't run in this way.

You know, the way that private equity structure deals, they create something called sweet equity, which is basically shares in the business for the people involved in driving growth in the business, and it's a way of in- them being incentivized that would be very difficult to do on your own because you could do it on your own, so you could promise, like, the founders, the partners, we could say to a potential CEO, "Look, guy, here you go.

You're gonna have this percent of the company, um, and this is what we're gonna be able to do." But when, when you look at the kind of growth stories that are really successful in healthcare, the, the ones that are really ...

m- the vast majority of the ones that really stand out have been backed by private equity because they not just incentivize quality leaders, but also there's the, the, um, amount of capital they, that they, that they give.

So what you could borrow from a bank is limited.

You know, a bank will give you a certain amount, and they have this kind of certain appetite for risk.

But private equity, you know, it's where most of the world's money is currently at the moment.

Um, so there's ... it's not limitless because they obviously are very, I would say, very, um, careful about where they invest and how they invest because one of the reasons that they grow and they make money for their investors and that they make a success of the businesses that they invest in is because they make good decisions about that.

So, um, that's not always the case obviously, but that's often the case.

You know, they all have a kind of average return that they're able to generate over five years.

So with money being available, it means that you can buy other businesses.

So you can grow yourself, which might take five, 10, 15, 20 years to get to a certain size, but if you ...

You know, Midland Eye is a good example.

You know, that was a, that was an acquisition prior to them being, I think, owned by, by pri- prior to being involved in private equity.

But if you can acquire another practice, then you can grow more quickly.

So we can grow by acquisition.

Um, and we also have capital available for buy and build, so we can approach other surgeons if they like the idea of having their own people, their own clinic, their own equipment and or- and actual operational autonomy, um, then we can offer all of that, and we're capitalized to do so.

So w- we, we just think that it gives us more power and ability to, to grow, to scale and to offer, you know, what is special about ACL Vision to more people than if we were doing it on our own.

If we did it on our own, maybe we could do it in 30 or 40 years.

But being backed by private equity, we feel we can do it in five to 10.

So it's just ...