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We acquired the big boys, now it’s time for start-ups, says Proven

Published:Friday | February 12, 2016 | 12:00 AMSteven Jackson
Christopher Williams, CEO of Proven Management Limited.

The fast-growing financial outfit Proven Investments Limited (PIL) wants to invest in 100 start-up companies based in Jamaica and other countries in the English-speaking Caribbean.

It's the latest growth plan from Proven, led by Christopher Williams.

"The economic platform has probably never been this good in independent Jamaica," he said.

"We are saying now is the time to move. We are adjusting our private equity strategy to focus on small medium enterprises and start-ups. Our private equity deals previously have all been in established entities," he told the Financial Gleaner in an interview this week at his Lady Musgrave Road office.

PIL is a private equity management company whose investments include companies with assets well over $1 billion. These include Proven Wealth formerly Guardian Asset Management; PWL Transition Limited formerly First Global Financial Services; and Access Financial Services. So why would PIL want to invest in companies with much smaller asset bases or even start-ups?

"We have gone after the big boys, and we have done well," said Williams. "The (macroeconomic) platform and our expertise in the private equity arena have given us the courage to go after that space."

He explained that PIL wants to partner with companies with strong revenue growth, preferably earning hard currency, and a strong position in the market.

SMEs often face difficulty in securing financing from institutions. Even when successful the business loans are offered at higher levels than car and consumption loans which are now in single digit territory. Additionally micro loans can still hover near 50 per cent per annum, equivalent to credit card interest rates.

"So what we are saying to entrepreneurs is, 'now there are no excuses'. Come to us with your ideas whether for start-up or expansion," Williams said.

It's an emerging trend for companies on the scale of PIL to seek out start-ups in the island. In late 2013, Mayberry Investments a company which holds a stake in many listed companies started a campaign it dubbed, the $100 million club in which it invited companies with revenues in that region to seek financing or planning advice from Mayberry. It was aimed at companies too small to list on the stock market but in need of capital.

State and multilateral lenders are trying to develop a venture capital culture in the island by supporting angel network of investors in Kingston and Montego Bay.

"We want to back and invest in 100 companies," said Williams, adding that the company will not focus on technology start-ups necessarily, but rather on companies which make products.

PIL will expand its head office and hire up to two additional private equity analysts to support this drive.

In December 2014, Proven became the largest shareholder in microlender Access Financial through its $1.2 billion acquisition of 49 per cent of the company's shares that were offloaded chiefly by Mayberry Investments and other share-holders. In November 2014, Proven increased its share-holding to 20 per cent in Knutsford Express which operates a cross-country luxury bus service but recently sold its stake to NCB Capital Markets for a profit. In July of that same year, Proven acquired First Global Financial Services for roughly $3 billion. It also acquired AMCL, a microlending firm previously owned by Scotiabank, in January 2012, and before that, it bought Guardian Asset Management in 2010 and renamed it Proven Wealth Limited.