‘Companies in Wales have a tendency to sell out more quickly’

Corporate finance expert Godfrey Ainsworth says too few are taking a risk, going out and forming companies

 

ONE of the leading figures on the corporate finance scene in Wales over the last two decades, Godfrey Ainsworth believes the economy is not hindered by any "entrepreneurial deficit".

 

However, Dr Ainsworth, who earlier this month stood down as managing partner of Cardiff based Gambit Corporate Finance, believes that there is a greater tendency in Wales for business owners to "sell out" rather than focusing on the next growth phase Dr Ainsworth, who established Gambit in 1992, said: "There are entrepreneurs here, particularly in the technology sector. We have some good technology and a strong research base in terms of our academic institutions.

 

"But I think what happens is that a higher proportion of those companies take longer to come to terms with what incoming investment could do for their businesses than maybe happens elsewhere. 

 

 "So you get into a situation where a high technology company might not grow as quickly simply because they are more cautious."

 

And he believes that entrepreneurs in Wales also have a tendency to sell out more quickly.

 

He said: "They get the business to a certain size and then take £10m-15m, put it into the bank and are happy. Very few companies go on like Admiral and IQE, which both could have sold out if they had wanted to."

 

On the Welsh economy he said it was still too dependent on the public sector He said: "Maybe there is a greater proportion of the Welsh population which is risk averse.

 

"You don't see enough companies being formed and enough people going out and taking a risk. It can become a cultural thing that your parents worked for the public sector so you do the same.

 

"However, we have got the infrastructure and the networks to support entrepreneurial activity, as well as Finance Wales and West-Bridge [venture capital firm] in Wales."

 

On Finance Wales' new £150m fund he said: "They have got the money, but my concern with Finance Wales would always be have they got the right investment team and the people with investment experience who can put together good deals? "I hope the fund will enable them to enhance their existing investment team with additional staffing with specific and practical private equity expertise to complement the existing skills set, which I think has an advisory and banking bias."

 

For Welsh firms looking for growth finance he said the days of seeking the easy route of knocking on the doors of a Finance Wales or a WestBridge are long gone.

 

"But it still provides a great stimulus to have outfits of that quality in place locally," he said. "It can help enormously in trying to find a cornerstone investor."

 

Dr Ainsworth said his intention was always to stand down from Gambit around his 55th birthday.

As for future he said: "There is a continuing involvement as chair of IQE. It is growing quickly at the moment and I want to make sure I give time and attention to help develop the business further.

 

"We have some interesting new markets like in solid state lighting and solar, and are very strong in wireless."

 

He is also chairman of airports group Omniport, in which Gambit has an equity stake. The company owns Norwich and Maastricht Aachen airports and is exploring acquisition opportunities in Africa.

Dr Ainsworth said: "I am giving myself some space to consider some of the opportunities put in front of me and not make the mistake of diving into something too quickly.

 

"However, putting a fund together is something that interests me and is something I have had a couple of approaches on."

 

On the shape of any fund he said: "I think it would be more likely to be one with a technical focus and, given my background, probably in technology.

 

"There is a lot of value in Aim listed companies which is not recognised, so it maybe a fund with a specific function of investing in them."

 

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