Peter Flaherty, previously CEO of MSB International when it was capitalised at around 210 million and Bryan Lloyd, a former MD of Manpower and Spring, have formed a new company to invest in recruitment businesses.
Initially they will have access to funds of over 20 million but the new venture will also offer management and back office services as well as finance.
A third director is Graham Cole, who as corporate finance director for City investment bank Beeson Gregory, was involved in over 60 stock market flotations of mid-cap companies, including several in the recruitment sector.
The new company, Recruitment Investment Group, will invest at the start-up or development stage.
In all cases this will include it taking an agreed equity stake. We know that the recruitment industry is full of talented, ambitious people who are bristling with ideas. We want to hear from them because we have the knowledge, experience, finance and contacts to help turn those ideas into profitable reality, says Bryan Lloyd.
There are also lots of established recruitment companies which could achieve faster growth and a higher exit value with the kind of support we can offer, he said. We want to invest in those companies, so long as they have the same goals as us and will value our contribution.
Initially RIG will focus on higher unit value recruitment markets. The first deal is expected to involve a specialist recruitment company at the professional end of the public sector.
RIG also has a New Markets Company which will identify growing recruitment markets that are poorly serviced, and then invest in individuals to create start-ups that exploit those opportunities.
For existing companies it may also consolidate individual companies under a common brand through a franchising service.
We can centralise their back offices to deliver lower costs and higher quality services to their customers, leaving the management free to make sales and placements, says Lloyd In every case the management has the choice to stay with the business. We will also want them to retain a substantial equity stake, because this is by far the best motivator.
The longer term aim will always be to realise value through a trade sale or market listing. We believe that with our help, recruitment companies can ultimately achieve far greater value than they could have achieved for themselves.
Already RIG is considering a number of opportunities which have come through existing contacts, but is keen to hear both from individuals who want to start up their own businesses and companies which are keen to accelerate their growth and profitability.
We enjoy being part of the recruitment industry and we''re genuinely excited by the opportunities that are constantly presented, says Lloyd. We passionately believe that by working with talented individuals and teams we can continue to create wealth for them, their employees, our partners and ourselves.
Launch of recruitment investment group
Access to funds of over 20 million for start-ups and established companies