Working with portfolio companies

Ethos work closely with company management teams to formulate strategy and pursue growth opportunities to drive superior investment returns. Whilst Ethos generally will not participate in day-to-day portfolio company operations, the Firm provides Board of Director-level advice (through frequent informal communication and at formal forums) and corporate governance expertise to management teams. Ethos seeks maintain control of, or significant influence over, all major business decisions that may signifcantly impact a company’s value. 

Ethos’ efforts to assist management include, among other things, developing and refining strategic objectives, providing a third-party perspective on company performance, designing incentive structures, and ensuring required financial and other information is provided and analysed in a timely fashion. Furthermore, while it is Ethos’ preference to partner with strong management teams, the Firm is highly skilled at identifying management weaknesses early on and sourcing and recruiting new executives. In addition, the Firm has assisted in introducing new Chairpersons and Non-Executive Directors with the appropriate industry and leadership expertise in a majority of  Fund IV,  Fund V  and  Fund VI  investments. 

In many investments across the Firm’s history, Ethos has supplemented and, when necessary, replaced management at portfolio companies.  Ethos has made changes to the management teams of 73% of Fund VII investments.

Ethos structures management incentives in a bespoke manner for each deal, with the aim of ensuring the alignment and retention of key executives. These often include the use of subsidies, bonuses, and ratchets.

Ethos is proud of our ability to develop great business and people leaders. Ethos has attracted a dynamic mix of seasoned professionals, successful entrepreneurs and high impact non-executives to portfolio companies. Networking events are designed and hosted as a forum to bring leaders together to:

• Network, creating a community of peers 
• Share experiences of common business challenges and opportunities 
• Share experiences of working with private equity shareholders
• Provide formal training (e.g. lectures and course content from leading academics and industry professionals) 

Recent networking events have covered a range of business fundamentals that have been highly relevant to all portfolio companies at differing stages of business maturity. Recent themes have included: 

• Strategy in Action: a one-day, intensive lecture + case study session facilitated by Professor Nick Binedell and Grant Pattison, together with a lecture by McKinsey on “Beating the Odds” in strategic articulation and execution.
• Leadership: a series of shared experiences by portfolio company CEOs, executives and non-executives, involving presentations on culture by Mike Pfaff (former CEO of RMB) and talent ecosystems by Hannelie du Preez (a senior independent consultant).
• Driving a Sustainable Step Change in Business Performance: a one-day workshop, lectures and toolkit led by a selection of external C-suite executives and a presentation by Ian Russell (former executive at Telkom, SABMiller and Absa).

Apart from the networking events, Ethos actively promotes collaboration between portfolio company management teams to share best practice and learning, with the objective of accelerating business growth and addressing strategic agendas e.g. BEE and transformation, CSI, governance and talent development.