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SLF Timeline


 SLF was started in 2019 by three partners: Steve, Mike and Will 

 

We’d already been guiding and advising 10s of business owners on how to grow their businesses and achieve their goals, with some amazing successes. Then we wondered what would happen if we owned the companies we were advising. Rather than taking a small consulting fee, we’d get all the upside of the business growth that our Point16 tools and advice created. 

 

 

We saw an opportunity to buy amazing kiwi businesses and run them well for long term returns. 

 

 

The businesses the fund looked for were: 

  • Profitable kiwi SMEs with a tangible product, happy customers, and a good team 

  • Being sold by an owner/operator who was looking to retire and leave their staff, their customers, and their legacy in good hands 

  • In a range of industries that weren’t vulnerable to digital disruption, cheaper imported options, or economic downturns (note – didn’t consider their resilience in a 1/100-year global pandemic) 

  • Showed strong cashflow to quickly pay down debt and deliver long term dividends to investors 

 

SLF was started to demonstrate: 

  • Business deals can be win/win – for the vendor, the investors, and the business 

  • A different style of Private Equity – that made long term sustainable decisions rather than prioritizing quick growth for a quick profit 

  • That patient capital, seeking long term returns, could provide a sustainable lifestyle for its investors by providing safe passive income for decades 

  • That Point16 brilliant business tools could deliver outstanding returns  

 

 

In early 2019 SLF: 

  • Raised its first fund from our own money, friends, family, and ‘the family office’ of some HNWI introduced through our bank partner 

  • Built the master-investment spreadsheet, which showed long term returns based on buying a company – taking into account purchase price, amount of debt, growth forecasts, and running costs 

  • This was the theoretical standard that we compared investment opportunities against as we deployed the fund for our investors 

 

The investment strategy was based on: 

  • Buying 100% of the company (so the owner could properly retire, and so we could deploy Point16 management tools quickly) 

  • Funding 1/3 of the purchase price with fund capital and 2/3 from bank debt 

  • The company having good enough cashflows to pay down the debt within 4-5 years of purchase. This goal dictated the EBIT multiple we could buy at. 

 

First purchase: Able Axcess, 2019 

  • One owner operator for 10+ years looking to retire for beach, bach, and helicopter 

  • Steady business making modular aluminium ramps to help kiwis get easier access to their homes when injured or sick 

  • Team of 15 manufacturers and installers 

  • Some clear growth opportunities, but no immediate fixes required 

 

Then there was a drought for about 9 months, with 75% of the fund still unused and earning no returns. In early 2020 we bought 3 companies all in 3 months: 

  • PEP in Feb, a productivity training company  

  • Loadrite in March, a dealership that installs and services industrial weighing equipment 

  • HK Kitchens in April, a kitchen business that designs, makes, and installs for NZ’s largest group home builders 

 

We’d done the work – due diligence, price negotiation, arranging bank debt, in late 2019. We were pleased with each purchase and with the portfolio overall. We’d also retained 10% of the fund for an transition wobbles or, potentially, a fifth small company. 

 

Then COVID hit and all of our plans changed. We spent the time from 2020 to 2023: 

  • Supporting the business leadership teams to operate in unprecedented times 

  • Navigating lockdowns, regional borders, health crises and supply chain crises 

  • Rebuilding leadership teams as we collectively learned what worked and who was up for it 

  • Leading remotely through a time of huge change for all our people; change at a personal, business, national, and global level 

  • Every single business went through it’s own rollercoaster, and we were strapped to all four of them, alongside our own personal journeys 

 

Things we learned: 

  • Nobody knows what the owner does. Even if everyone genuinely believes they’re mostly out of the office and playing golf already, the existing leadership team was formed around them. Without the owner/operator, the team leads a lot more hands-on leadership through the transition period than we planned for. 

  • Empowered teams working towards a shared plan is a good cultural goal but it won’t happen overnight, when the team is used to an owner who calls the shots. 

  • The transition from command-and-control to Goal Role Remind is tough but amazing as it clicks 

  • Not everyone is ready to step up and lead – treat all senior appointments as ‘acting’ in the first few months – especially GM roles. 

  • Every company has a wealth of opportunities to grow, or get more efficient, or improve customer service. Getting clear and aligned on purpose can act as a north star and avoid costly misfires. 

 

Today: 

  • We’ve doubled the value of the fund, while also paying dividends to investors 

  • All four investments remain solid profitable businesses, though each has had their rocky moment (or quarter) 

  • Great leaders in each business are executing P16 business brilliance tools in their own way, freeing us up as coaches, advisors, and strategic governance 

 

It’s a strong position to take stock and map out the next 5 years of the Sustainable Lifestyle Fund. 

 

Point16 services to SLF companies: 

  • GM coaching (and executive search / hire when needed) 

  • Leadership team accountability and monthly run KPIs 

  • Annual strategy and budget 

  • Quarterly board meeting per OpCo 

  • Strategic project support – process change, continuous improvement, business system upgrade, sales and marketing plan, new market entry, R&D program build, business case for major capex, etc 

 

Point16 services to SLF group: 

  • Quarterly board meetings and annual AGM 

  • Bank relationship and debt structure 

  • CFO / group finance function services  

  • Employment law advice, risk and compliance advice, insurance  

  • Due diligence / business case support for major investments 

  • Investor reporting 

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