November 4, 2021 – Strategic investor LCap Group has acquired a stake in U.K.-based Rowan Executive Search. “Rowan is a strong brand and a superb business which speaks to a clear segment of the marketplace,” said Graham Roadnight, CEO of LCap. “It has great synergies with the other companies in the LCap Group, and significantly broadens our scale in the private capital and private equity markets.” Rowan will continue to be independently led, and the northwest U.K. will remain the heart of the search firm’s business. “Our strategic investment will support Rowan in developing its already strong position in the northwest, while also enabling it to expand into other areas of the U.K.,” said Mr. Roadnight.
“We are thrilled to complete this transaction and we continue to discerningly seek further investments which are aligned to the vision and values of the LCap Group,” said Rowan co-founder and managing director Paul Waite. “This investment is a testament to the Rowan team and our track record of successfully supporting SMEs on their own growth journeys.”
A Strong Strategic Platform
“We are excited by the positive impact that the additional capability of being part of LCap Group’s house of brands will enable us to have with our clients,” said Mr. Waite. “The transaction signals a really exciting time for the next stage of growth for Rowan, focusing on our expertise as the bridge between private capital and growth capital with a partner that complements our expertise in the SME arena. It provides a strong strategic platform from which to expand and to support ambitious businesses across the north and beyond.”
“We are looking forward to building on the momentum we have gained during our first decade in business, and continuing to be instrumental in the exit stories of owners crystallizing their positions through private equity investment, stock market flotation or trade sale,” he added.
Rowan, which is based in Manchester and Lancashire, works with business owners across the region to secure top talent. The company, which was founded in 2011 and employs 30 staff, specializes in strengthening the boards and leadership teams of privately and family-owned SMEs as well as those backed by private equity.
Rowan helps clients to shape their goals and board structures and to then secure the right talent to accelerate their transformation and growth, and ultimately to crystallize their position.
Shift in Thinking
LCap supports businesses by enabling their leaders and investors to create value through leadership talent, insight, and deal origination. The firm has previously acquired search firm Drax Executive, which is a private equity leadership specialist, and the technology consulting business Aavistus. It has also developed a digital platform which supports clients by providing smart insights into the capability of the leadership teams in their investee businesses.
“Private equity firms outside of the United States are taking note of the expansive runway ahead for executive search businesses that offer a real, values-driven alternative to the SHREK firms,” said Scott A. Scanlon, CEO of Hunt Scanlon Ventures, based in Greenwich, Conn. “The momentum is shifting in favor of the boutiques, and smart investors see that,” he said.
“LCap Group is one of a growing cadre of foreign soil PE investors buying into the sector’s growth story just as their American counterparts have been doing for the last three to five years,” said Mr. Scanlon. “The prevalence of M&A activity and investments in recruiting businesses will lead to a ramped-up period of heavy consolidation within the next 24 to 36 months – and it is a trend we now see going global,” he noted.
“Private equity firms themselves have been shifting from a heavy focus on financial diagnostics to human diagnostics – where people and talent are the primary value, growth and performance levers. We see this with our own private equity clients,” said Mr. Scanlon. “With that has come a heavier reliance on executive recruiters who play a significant and expanding role in top-grading C-suites and building out middle management rank and file roles. So, PE gets this, and boutique search firms are the primary beneficiaries of this shift in thinking.”
LLR Partners Makes Equity Investment in True
Private equity firms continue to pair up with executive recruiters at a blistering pace. High growth rates, new layers of incremental revenue streams, and AI-powered talent intelligence tools aimed at revolutionizing the sector are creating a perfect storm for PE investors who now view search firms as an investment of choice. Hunt Scanlon Ventures talked to True about their deal with LLR Partners.
Following the Rowan deal, LCap’s investee companies now employ 100 people across offices in London, Frankfurt and the northwest.
Rowan appoints board-level and senior executives for high-growth SMEs. Recent success stories include assignments for Clubhouse Golf, SpaMedica, Eque2, Utiligroup, Lakelovers, MPM Products and Made Tech, which floated on the stock market last month.
During 2020, Rowan clients were involved in exit deals with a total value of $1.35 billion. Rowan’s revenues are on track to grow by 40 per cent this year to a record $4.3 million, according to data from Hunt Scanlon Ventures.
Mr. Waite’s early career was spent in the technology and defense sector multi-national, before moving into recruitment and becoming a director at the RK Group. As managing director, he led nine offices across the U.K.. In 2011, he combined expertise and networks with David Anwyl to form Rowan. Mr. Waite specializes in CFO and board-level appointments into growth orientated, ambitious businesses.
Mr. Anwyl, associate director (CEO), spent the first half of his career in industry commerce for companies such as Diageo and American Greetings. He began his executive search career at Robinson Keane before founding the Rowan Group in 2011. He has experience of leading over 300 executive assignments, including CEOs across a range of sectors, including manufacturing, technology and business services.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media