Profile: Bridges’ Maggie Loo
Sustainable and impact specialist Bridges Fund Management has flourished from a single fund to a fully-fledged multi-strategy since its founding 15 years ago. Having worked at the GP for 10 years, The Drawdown speaks to IR partner Maggie Loo to understand her role in the firm’s expansion.
Becoming a private equity IR professional was not Maggie Loo’s initial goal when she joined Bridges in 2007 but it is proving a thrilling ride so far, she says. “As an investment professional, you tend to take for granted that you have capital to deploy,” Loo tells The Drawdown at Bridges’ London offices. “For me, it was fascinating to get more of an insight as to how the firm worked as a whole.”
Her transition to the Bridges’ IR function in the early 2010s coincided with the fundraise for its third growth capital vehicle, which closed on £125m in 2013, under the GP’s previous name – Bridges Ventures. A Harvard-educated environmental scientist, Loo was originally an investment associate at Bridges and was asked to step in and help co-founder Michele Giddens with investor relations for that fundraise. The continued expansion of Bridges’ impact-driven strategies saw her remain in the function thereafter, culminating in her formal appointment as IR and business development partner in 2016.
As part of the investor relations team, Loo focuses on raising capital for the multi-strategy investor Bridges has become. The GP’s transformation began with a thematic shift: initially focused on the UK’s most deprived areas, Bridges decided in 2006 to also invest via three thematic lenses – health and wellbeing, education, sustainability – regardless of where companies were based within the country. In addition to its sector approach, Bridges started incorporating new strategies to its platform: its initial roster of growth funds was joined by separate sets of vehicles for social businesses and real estate in 2009 and a social impact bond fund in 2013.
The IR learning curve
Bridges’ multi-strategy offering means that since 2012, it has been raising at least one fund at any given time, Loo says. The Drawdown understands that a new vehicle is indeed currently on the road – Loo declined to comment on reports, however.
The pace of fundraising has taught her to juggle the different strategies. “My background is on the private equity side; that’s what I’m most comfortable with. Raising a couple of property funds has helped me up the learning curve, and I feel that what we do within one strategy is highly relevant to the other.” A background in investment has been an asset for her and co-founder Giddens as IR professionals, she says: “Having an insight into how a firm works on that front really does help with conversations with LPs; it brings our investment approach to life for them.”
According to Loo, the multi-strategy platform approach has proved essential for Bridges to fulfil the mission it was created with 15 years ago – to back businesses and assets that address social and environmental challenges: “Rather than shoehorning anything into a particular fund, we spot a challenge and can then choose the most appropriate capital to solve it.”
The strategic expansion has allowed the firm to grow without compromising its trademark lower midmarket focus, the IR partner says. “Just raising larger and larger funds could dilute the experience that we’ve built up. Our PE team is very keen to stay in that part of the market and we’re fully supportive of that.”
Whether funds become larger or not, the capital flows finding their way to Bridges are mounting in size and speed as LP appetite grows for its impact offering: Loo cites the firm’s fourth property fund, which took three months to secure £168m of its £220m target, with commitments raised in the lead-up to the UK’s referendum vote of June 2016. “As an IR person, my natural inclination is to try and raise more and more capital. Achieving that whilst staying true to Bridges’ strengths is my priority,” Loo says.
Impact crosses the pond
The second part of Loo’s job title provides an opportunity to strike such balance. As the business development partner, her goal is to sound out how LPs feel towards new strategies and whether Bridges is well-placed to deliver an investment product that caters to that. Adam Frost – a fellow partner in charge of the firm’s in-house advisory arm Impact+ and new strategy development – typically takes the initial lead and assesses new strategies that Bridges could be effective in. Together with Giddens, Loo tends to step in later, once a potential winner has been identified and a plan is required to put it in place.
Bridges’ recent expansion from its foundational UK base to the US illustrates how the process works in practice. The firm was driven to cross the pond by mounting demand for impact among US LPs and a belief that Bridges was well positioned to meet it, Loo says. “We saw similarities in the social and environmental macro challenges in either country. Our experiences here were translatable there to a great extent.” For instance, one of Bridges’ maiden investments in the US – Impact Fitness, a low-cost gym franchise – drew on the firm’s experience with The Gym Group in the UK.
Alongside co-founders Giddens and Philip Newborough, Loo was key in designing the blueprint behind Bridges’ US journey, with input on deciding the new team, the fundraising offer and legal structure. “Ultimately, we wanted a lot of control so we chose to set up a subsidiary fully owned by Bridges,” she says. With an office in New York and its own set of partners, Bridges US will aim to replicate the platform approach followed by Bridges’ initial UK operation, eventually complete with growth, property and social sector vehicles, the partner adds.
The operations intermediary
Bridges’ multi-strategy nature has also proved an interesting selling point for LPs, according to Loo: AGMs typically cover both private equity and real estate funds, creating an opportunity for knowledge-building for both the firm and the often-overlapping LP bases behind either platform. To help give investors a clear picture, the IR team, supported by associate Laura Noorani and assistant Lysette Stephens, has recently worked to harmonise how impact is reported across all funds. In addition, Bridges has rolled out a CRM system over the past 18 months to better track interactions with its increasingly sophisticated LP base.
As the IR partner, Loo routinely faces LP questions over how Bridges deals with operational challenges; the setup of dedicated due diligence streams by larger players such as funds-of-funds is becoming more commonplace, she says. Cyber security, data management, regulatory compliance and compensation schemes are all areas that typically come up in the process, according to her. The Drawdown has previously covered how IR teams at firms including EQT are taking on more operational responsibilities; Loo sees herself as the intermediary who brings forth the data and the professionals – CFO, IT teams, etc. – able to show LPs how Bridges’ platform goes about tackling operational risks.
The IR activist
Since her Harvard years, when she attended UN climate conferences as part of a Greenpeace delegation, the passion for environmental issues continues to run deep in Maggie Loo. Her “refreshing” initial contacts with the private sector convinced her it had an important role to play in addressing environmental challenges, the partner says. Investing, rather than the advisory approach she took in her earlier consultancy roles, enabled a more front-line position and greater ability to solve the issues, she adds.
Loo’s drive for impact investing was not only central to joining Bridges’ investment ranks at the time when the firm set up its sustainability theme; it also continues, according to her, to shape her current IR work: “This is something I feel very passionate about: being in a position to grow Bridges’ platform of strategies so that more capital is deployed in a way to maximise impact.” Asked whether she could fundraise for a manager without such a clear-cut impact mission, she hesitates: “Even if I could, I wouldn’t feel as passionate, as effective in what I do, if it wasn’t something I really believed in.”
Impact and ESG strategies are no longer the private equity niche they were 15 years ago, back when Bridges came into existence. Loo says the firm appreciates the competition – “we don’t want to be big players in a small niche market, we want that market to grow,” she says – but acknowledges the need to stay relevant. As its LP ranks become more ESG- and impact-driven, the firm is looking to showcase its strengths, which it claims come from its unequivocal commitment to impact – better deal origination, talent retention and commercial returns that go hand-in-hand with this investment style. “It’s all about figuring out what a great Bridges deal looks like and continuing to apply that – both within our existing platform and into new strategies.”