Justin Bateman discovered the private equity world before it was quite ready for him. It was the mid-'90s, when the lanky, 6-foot-3 economics student in Cambridge, England, became entranced with how companies financed themselves and how a private equity investor can "effectively play much more of a role in the industrial world" than a passive investor.
That observation left a mark on Bateman, eventually leading him to BC Partners Ltd., one of London's pre-eminent PE equity houses.
There he helped companies -- variously a casino operator, a boilermaker, a satellite conglomerate and an office-products supplier -- traverse complex transactions.
In the early days, however, enthusiasm didn't count for much at London's button-down establishments. "No one was hiring college graduates -- full stop," says the convivial, blue-eyed executive, whose father worked with Bank of England while his mother taught ballet. Bateman shifted to accounting as a stepping stone, as older family members counseled. PricewaterhouseCoopers LLP hired him to work in its transaction services group advising private equity firms. Bateman learned the ropes while training for his certification. As soon as he qualified, he says, "the world opened up."
Bateman first joined BC Partners in 2000, when he was 24, one of only two associates first hired by the firm. Founded in 1986 as Baring Capital Investors Ltd., the firm raised the first buyout fund in Europe -- and at one point its largest. BC happened to be looking for someone with more commercial experience than just auditing skills. Bateman fit the bill.
After cutting his teeth assisting senior guys, Bateman took a breather at France's Insead for a 10-month graduate business program. He rejoined BC Partners in 2003, still his "best choice" because of its supportive "collegiate" culture, he says. "We're very much team-focused" on the transactional side and through the firm's economics, even the youngest principals get "a bit of the carry" on all deals.
Fittingly, the convivial Bateman, who speaks at a fast, accented clip, gives full credit to the collective "we" when speaking of the firm's acquisition in 2008 of Intelsat Ltd., which at $16.5 billion was easily one of its biggest. BC, which controls 70% of voting rights, benefited from prior due diligence on the industry from an earlier deal it looked at -- Eutelsat SA -- but didn't get. Bateman delved into the intricacies of Eutelsat's capital structure, an invaluable experience that enabled him to quickly master the ins and outs of Intelsat's even more byzantine capital structure inherited from a previous buyout. Intelsat's two registered entities held at least 20 tranches of debt, each with different terms. "Bankers had great fun trying to work out what can be done with it," he recalls with a chuckle.
Bateman's oversight of the capital structure helped Intelsat find ways to delever and command better coupon rates in subsequent transactions at the height of the credit crunch.
But it's his collaborative style that wins him the most praise. "Justin was the go-to guy for financing, but his approach is always respectful and supportive," says Intelsat CEO David McGlade. "He's still young and has a great deal of know-how and intelligence. But to learn how to finesse things and collaborate is something that comes with age. Justin has picked it up very quickly."
Last year, Bateman and a colleague from Hamburg, Hans Haderer, decamped to New York to launch the firm's operations in the U.S. Given the firm's €10 billion ($16 billion) in managed assets and global scope, a U.S. presence was deemed a must. Not long after, BC co-chairman Raymond Svider came over, along with James Rubin, co-founder of One Equity Partners.
"It was challenging initially and very disconcerting," Bateman says of the tight financing markets. "But, in fact, in many ways, it was a fantastic time because when we came across, we knew that we would have to be creative. We were psyched up to do that. So the fact that leverage wasn't available didn't make a difference psychologically because we were ready to scrap for deals."
The New York team felt it had a "fresh eye" to glean opportunities. Bateman, Svider and Rubin looked for sectors severely affected by the recession, such as retail, and companies within the sector that remained relatively resilient.
They found office products retailer Office Depot Inc., whose operations were declining, says Bateman, but whose business is fundamentally sound. In June BC invested $350 million in the company to boost its liquidity and cash flow in the form of a private investment in a public entity. The equity was structured to give BC a convertible preferred position while participating in any upside.
Now 35, Bateman is married to a woman from California, and the couple have a 15-month-old son. He says he revels in New York's "vibrant" intensity.
In June he was promoted to partner, a long way from the days (not so very long ago) when he had trouble landing a job.