Luca Peyrano, London Stock Exchange Group
London Stock Exchange Group proposes a unique programme, ELITE, an integrated service designed to help SMEs prepare and structure for the next stage of growth through access to long term financing opportunities.It targets SMEs with a sound business model, clear growth strategy and a desire to obtain funding in the near future. It now accounts for more than 200 companies of different sizes and sectors, more than 150 partners and more than 70 long term. Enjoy the exclusive interview with Luca Peyrano, Head of Primary Markets Continental Europe, London Stock Exchange Group,
What is ELITE?
ELITE is a two year programme for high-growth, ambitious companies designed to provide their CEOs and senior management with access and support from blue chip advisors and investors, as well as a bespoke management course delivered by various business schools across Europe. We launched ELITE because we know that entrepreneurs often find that that their passion and ideas are enough to launch them a business, but accessing on-going growth finance from institutional investors, private equity funds or venture capital is much harder. ELITE facilitates company access to a full range of funding options, increases company profile and visibility, promotes relationships and opportunities with potential investors, and supports management best practice and entrepreneurship.
How many companies have joined the programme?
We have welcomed more than 400 companies to the ELITE programme as well as over 150 financial advisers and professional bodies. In addition, the programme now also boasts more than 100 institutional investors including private equity firms as we all as specialist debt investors.
The 400 companies come from 23 European countries, the programme having been rolled out across Europe in 2015. The companies have a combined revenue of more than EUR 33bn, come from 33 sectors and employ more than 140,000 employees. This is now a very serious and impressive pan-European programme.
Why did LSEG launch this programme across Europe?
High growth SMEs are the major source of new, high quality jobs. For the EU economy to grow we need to ensure these types of companies are nurtured and supported as fully as possible. We want to create a community for Europe’s most ambitious high growth businesses. We have brought together over advisors and investors, including leading accountancy and legal firms; business angels, VCs and private equity houses; institutional investors; PR firms; banks; brokers, as well as the major trade and investment bodies.
How do you select the participants? Do they have to pay to be part of ELITE?
We look for high quality, highly ambitious businesses. This can include an established successful family run business as well as a high growth, high tech next generation company. All applicants are selected following detailed discussions with the ELITE team. There is a financial commitment from the companies participating to cover the cost of running the programme – €10,000 per year.
How have companies performed since joining ELITE?
The results have been truly impressive:
- 45 Companies have completed a deal with a Private Equity firm
- 15 Companies publicly announced an intention to IPO
- 21 Companies have issued bonds, raising EUR 410m
- 120 M&A / JV deals completed by ELITE comapnies
Can ELITE also be a useful tool for investors and advisers?
Certainly, it allows the investor and adviser community the opportunity to engage with a pool of high quality, dynamic companies and entrepreneurs. Advisers can sponsor the admission of their best clients / contacts to ELITE, in order to accelerate their understanding of the capital markets. Investors can sponsor the admission of their portfolio companies to ELITE, raising their corporate profile within the local and international financial community, laying foundations for structuring, well in advance of an exit strategy.
As well as attracting new companies, how will you continue to develop the platform?
It’s a good question and one we take seriously. In July, we launched ELITE Club Deal (ECD) which is an online private placement platform designed to streamline the capital raising process for ELITE companies. ECD will offer over 400 ELITE companies the opportunity to actively seek and raise capital professional investors (institutional investors, VCs, private equity firms etc.) offering them a host of funding options (equity & debt) in an online integrated environment. We are in pilot phase testing with five European ELITE companies now, with a full go-live planned for late 2016.
How does it work?
A company seeking capital, supported by an ELITE Partner, opens an “Opportunity” on the Platform and creates initial deal Terms & Conditions (based on a standard format set by ECD). The company then agrees T&Cs with a Cornerstone Investor(s) – Cornerstone Investors must commit to minimum percentage of the deal.
Follow-on Investor(s) submit their orders on the same terms and conditions agreed by the Issuer and the Cornerstone Investor(s). All documentation is uploaded and stored in the ECD Data Room. The Platform manages the order collection and book building process.
Issuers will be charged a one-off fee, calculated as a percentage of the value of the deal brokered on the platform. ECD will redistribute the fee among the participants involved in the deal (e.g. Agents selling fee, ELITE Partner advisory fee & Settlement bank fee).
How can companies find out more?
The website, www.elite-growth.com/ is the best place to start. We have information there about the programme: what CEOs can expect once they join ELITE as well as information for partner institutions, outlining the types of companies they can get access to via ELITE.
WE have a great team who will always be happy to answer any questions, so do get in touch:firstname.lastname@example.org