Investment Strategy

Typically, we invest in businesses where a milestone has been reached or the shareholders wish to make a decision about the future for themselves or their company. We often work with:

• Founders looking to de-risk by releasing equity and remaining with the company to accelerate growth with support from an experienced investor, or retiring
• Family-owned businesses that are planning for or managing succession
• Management teams that run their businesses day-to-day and would like to become shareholders
• Situations where shareholders might have different timescales, ambitions, needs, and ultimately want different outcomes
• Corporates or charities that are looking to sell a business unit that is non-core to their strategy

• Businesses generating £1m - £10m EBITDA (or £0.5m+ for bolt-on acquisitions)
• Headquartered in the UK
• Sector agnostic
• Flexibility on holding majority or minority equity stakes
• Ability to complete buyout transactions and / or to invest growth capital
• Flexibility to support MBIs

• The majority of our Directors have founded and/or scaled large businesses, giving us better insight and experience to help our portfolio companies grow substantially
• Literacy Capital plc is structured as a permanent capital vehicle. This gives us the ability to be more patient and ambitious, and give our businesses time to invest and grow, rather than sell for a quick profit
• The majority of Literacy Capital plc is owned by its Directors, team and their family members. We are investing our own money and incentivised to grow the value of our portfolio companies, rather than raising more capital or charging management fees
• We use leverage cautiously. We do not want to unduly risk our investment or the future of our businesses. This also means our companies are able to invest profits into growth, rather than be restricted by debt. We focus on developing our businesses over the long term, instead of financial engineering or a quick sale

• We maintain a live bench of candidates to strengthen management teams and boards to improve the companies we invest in. We are aware that teams of smaller businesses are often incomplete and may require investment. Many of these individuals are well-known to us and we spend a lot of time ensuring a close fit and strong chemistry between the team members
• We help our portfolio companies acquire other businesses and complete M&A. We have helped the majority of our portfolio companies complete acquisitions, something none of them had done prior to our investment. Our Directors have collectively completed more than 250 acquisitions
• We recognise that running a business can be challenging and lonely. We empathise with this, as we have shared many of the same experiences and emotions. We can help ease this by providing advice and confidence. As founders de-risk and benefit from outside support, we find this often releases fresh growth opportunities

Our style is to be straightforward, constructive and ambitious

We enjoy close relationships with our management teams and are happy to be as helpful as we can be. We do not interfere in day-to-day running of the businesses and leave the management teams to take care of this. We tend mostly to support the companies in areas where our experience is strong and which would ordinarily be outside of their business as usual, such as acquisitions, re-financings and recruiting at a senior level

We created Literacy Capital plc with a unique charitable objective. From the outset, we committed to giving away 0.9% of net asset value every year to literacy and education charities. Therefore, the more successful our companies are, the greater the size of our annual donations. This arrangement provides a consistent and growing income stream as the fund grows in size. More than £7.1 million has been donated or pledged so far. One charity that has benefitted and is actively supported by Literacy is Bookmark Reading Charity