Jim Strang (HgCapital Trust) - Building an Experience Curve in Business Software
Description
In this episode we speak to Jim Strang, Chairman of HGCapital Trust. The Trust has an outstanding track record investing in business-to-business software companies. We discuss the evolution in private markets over Jim’s career, the benefits of specialisation and the reasons behind Hg Capital’s success.
Show notes:
[01:15 ] Jim discusses his early career
[02:12 ] HgCapital Trust’s history
[03:41 ] The benefits of specialisation
[05:56 ] The importance of controlling the capital structure
[08:02 ] Characteristics of typical Hg investments
[10:07 ] The growth model
[11:29 ] End market fragmentation
[13:29 ] Being highly selective
[16:25 ] Having the flexibility to own the best businesses over the long run
[18:07 ] Replicating Hg’s success in the US
[19:58 ] Why Hg is an attractive owner for entrepreneurs
[22:35 ] Sustaining Hg’s culture and using greater scale to drive operational improvement.
[25:25 ] Objectively assessing each company’s potential
[27:03 ] Low loss rates and a few major successes
[27:57 ] Why things typically go wrong
[30:22 ] Leverage and the capital structure
[33:33 ] Valuing private companies
[38:43 ] M&A in a higher interest rate environment
[40:54 ] Trust your gut
United States
