Juan Leach: “We are raising our first Impact Fund to support purpose-driven high growth small caps.”

Juan Leach of Miura Partners discusses how private equity investment in Spain is transitioning towards a more sustainable model, the importance of diverse teams and a hands on approach.

Publicado lundi, octobre 17 2022
Juan Leach: “We are raising our first Impact Fund to support purpose-driven high growth small caps.”

Leaders League:  There tends to be a struggle to equate capitalism to sustainable solutions. How are you trying to change this stigma?

Juan Leach:  Capitalism is part of our modern history, it is how we have built progress and development and thus, is far beyond consolidated, studied, practiced, proved and profitable. Sustainability or sustainable development in comparison is quite recent in our contemporary timeline. But the truth is that we are transitioning towards a sustainable model, little by little, as we are already facing the Climate Change consequences and doing/being good to people and our planet is growing as a societal and collective consciousness. If we are able to efficiently deliver both impactful and financial returns while investing and transforming our companies we will reach a turning point, especially if this model is scalable.

All in all, we are in a good position now, as there is an increasing regulation to sustainable investments – at least in the EU; there is an exciting opportunity hauled by sustainable megatrends tailwinds; and there are more guides, tools and standards than ever to measure sustainability and impact. At Miura we have actively been performing a responsible investment model over a decade, in which the ESG is integrated in the business of our portfolio companies. Now we are raising our first Impact Fund to support purpose-driven high growth small caps. Hopefully we will contribute to change the stigma.

“ESG is integrated in the business of our portfolio companies.”

Leaders League:  Miura Partners aims to invest in attractive companies to foster their growth and innovation. What is the definition of an attractive company to you?

Juan Leach:  We have a consistent investment strategy committed to leading companies with solid business models to undertake growth, consolidations, and internationalization projects with a strong focus on innovation and sustainability. We traditionally back small and mid-size family owned & entrepreneurial businesses, mildly leveraged, and we seek to build partnerships with committed management teams who share our vision.

Leaders League:  How does your company differentiate itself from other private equity funds in the market?

Juan Leach:  At Miura we take utmost care and consistency during the whole investment process, from opportunities screening to exiting a company. We have a privileged sourcing and active origination, with a clear focus on Iberia and the Mediterranean arch, comprising the largest population of SMEs in Spain. When tackling a new investment, we have a selective criteria towards family owned industrial, business services, retail, education or healthcare companies with scalable and exportable business models, enabling creative deal structures fully aligned with the founders and management teams.

During the holding period we implement a real hands-on approach on key management positions reinforcement and non-organic growth initiatives. Our team is fully committed to help our portfolio companies strive leveraging on their own expertise and specialization and Miura’s ecosystem, formed by a large array of experts in specific industry segments and comprehensive knowledge – digital, transactional, operational, IT, and sustainability to name a few.

Leaders League:  What is your approach to talent acquisition?

Juan Leach:  Teams are definitely more comprehensive and horizontal now. We involve partners, Investment Directors and Associates alike throughout the investment cycle, from origination and sourcing, the holding period and the divestment. Though there are specific roles and specialization on thematic areas, as it is important to build coherent and diverse teams so we can all be aligned and share a common vision in each project. Such thematic areas include Sustainability (ESG), Innovation / Digitalization, Operations and Talent Management amongst others.

“It is important to build coherent and diverse teams.”

Our entrepreneurial background and values are embedded as well in our compensation policy. All the members of our investment team receive a portion of the carried interest and are offered to co-invest in every deal, so they can be part of it since day 0. In addition, wages are reviewed at least once a year. We try to be very sensitive and coherent around this topic, always paying attention to professional careers’ expectations and performance. But we need to go beyond a lucrative motivation. Fostering a positive atmosphere and firm culture to enhance teambuilding both indoors and outdoors and stablishing policies in favor of work-life balance, is equally important.    

As per gender diversity, it is indeed a challenge and sadly, a historical reality in our industry, very tied to how we grew as society in the last decades. We are currently focused on boosting the female talent inhouse and have a very clear gender approach when hiring new members, especially in C-level positions and the investment team. Also, we are forming partnerships with key organizations to further advance in that direction.

Leaders League:  What do you consider the current trends that will and will not last in today's market and why?

Juan Leach:  As the industry matures and private equity investors become more sophisticated, we investors are shifting our focus in new directions and types of specialization that may or may not be offered by a typical buyout fund.

The message in fund-raising patterns is unambiguous: Funds that have an angle, especially a tech-related angle, are the ones raising money the fastest. Technology now accounts for 31% of the buyout market and has become the industry’s dominant area of focus.

In terms of strategy and management, the most effective general partners add significant value by helping management teams build new capabilities, processes, and operating models, while providing access to networks of specialized expertise. This pool of knowledge enhances every stage of the value-creation cycle: finding the most promising targets, underwriting value in ways most appropriate to a given subsector, and providing portfolio companies a rich well of talent post-acquisition to help navigate across an ever-changing industry landscape.