Lincoln Jopp, partner at Disruptive Capital reveals his journey from commanding the 1st Battalion Scots Guard in Afghanistan to private equity partner, and the firm’s all-hands-on-deck investment approach.
The Drawdown (TDD): You haven’t had the typical career path into private equity; can you tell us about your former life?
Lincoln Jopp (LJ): Nothing about anyone at Disruptive is typical! I hope that’s one of our strengths. I joined the army as an outlet for leadership, rather than because I wanted to be a soldier per se. It was either that or politics. The next 24 years went in the blink of an eye and saw me spending time on demanding operations in Northern Ireland, Afghanistan, Iraq and Sierra Leone.
The worst of times was burying our men whom we lost in Afghanistan. I also got shot in Sierra Leone which wasn’t much fun. The highlight was, of course, the people one was lucky enough to serve alongside. These are some of the toughest, funniest and most ‘can do’ people in Britain.
(When TDD asks him about the award of the Military Cross for gallantry, he mumbles something about being in the wrong place at the wrong time.)
The army paid for me to study theology and philosophy at university, which I thought was very broad minded of them. The army later gave me the opportunity to study at the masters’ level and I have an MA in technology from Cranfield. As part of my transition out of the armed forces, I did a course on advanced management at Manchester Business School.
I have found that in later life all of that experience has brought about a sense of perspective, and means I’m fairly unflappable, which can be useful when working in private equity. One of the less obvious soft skills the army teaches you is empathy. If you’re not killing someone, you had better be working out what life looks like from their point of view. If you can’t empathise you can’t operate.
TDD: How did your role with Disruptive come about?
LJ: I’d been lucky enough to join the board of staffing company Impellam Group plc while I was still in the army. It was there I started learning the language of business. It was also my first exposure to the crucial role the boards play in the governance of enterprise.
At the same time, I did some work for the board of G4S as a consultant, while separately speaking with Edi Truell, the founding partner of Disruptive. Edi was keen to bring me in. At the time, they were just launching Tungsten plc, and listing it on the London Stock Exchange. Almost immediately on joining Disruptive, Edi and I injected ourselves into Tungsten.
It’s fair to say our time at Tungsten was instructive; it was something of a baptism of fire. In a relatively short space of time we did a number of the major muscle movements of corporate life: an acquisition and integration, a placing, successfully achieving control of a bank from the PRA, we were subject to a sustained short attack, creating and launching an employee share ownership scheme, board room ructions – we had them all. Happily, Tungsten is now on an even keel.
I came out of Tungsten two and a half years ago and back to Disruptive full-time.
TDD: What are your main areas of focus and responsibility at Disruptive?
LJ: I’ve always been a partner at Disruptive and I’ve always been keen to play full role; to be involved across the piece. The Disruptive strategy is to buy, build, transform, drive to a position of market leadership and then exit. This approach has generated a net IRR of 28% over 23 years.
As well as being involved in fundraising to exit and application of our strategy, my main work is tending to a number of portfolio companies as we bring about their transformation.
Our current portfolio includes a Brooklyn-based clinical-stage bioresearch company developing a new oncological immunotherapy; a regtech company REG UK Ltd; Tungsten, the Pension SuperFund, a health hotel in Switzerland and Atlantic SuperConnection, which is worth a Google if people are interested.
TDD: Compared with your peers, is it fair to say your role is much broader?
LJ: The partners at Disruptive are an eclectic group, which makes for lively investment committee meetings. There are no shrinking violets. But we are small enough to maintain a roll-up-your-sleeves, do what needs to be done approach from all the team.
I have a particular interest of two strands of work which crosscut the portfolio responsibilities. The first is the monetisation of data, from my experience building and selling a data product at Tungsten. The other is in the PR, marketing and thought leadership areas. We like to find regulatory tailwinds and go to where they are going to be blowing everyone in due course, but we get there first. I learned a lot from running military campaigns, which are often more about influence than killing people. Plus my Mum being a journalist, my wife in PR and my step-father a politician, it has grown me in that direction and I feel comfortable with marketing and development, so I apply a lot of thought to our businesses in those areas.
We brought in a team member to focus on some of the more nitty gritty compliance and operations aspects, but we’re a small and close team. There’s a strong sense of everyone getting involved each day.
I enjoy the variety of sectors we work across and finding the magic, whether that’s new management, ideas, or technology to inject into a hitherto slightly stuck sector or company. And then generating value.
TDD: What are your biggest challenges at the moment?
LJ: Two of our companies are reliant on an aspect of UK government input, in its wider sense, including from regulators. Getting answers from the UK government continues to be a challenge – that’s certainly one.
The opportunity for The Pension SuperFund is very exciting. It offers something different to the pension insurance regime. Under our model, schemes can benefit from improved covenant strength and the potential for improved benefits for the pensioners. It releases the ceding corporate to get on and be more productive while creating, we hope, a consolidated vehicle with the sort of firepower which can do real good in terms of the infrastructure investment, which the country is crying out for.
TDD: What are your key priorities in the future?
LJ: Getting the first Pension SuperFund deal through the regulator is what we all want to achieve. Particularly because the UK retail sector is in tough place, and a lot of these Defined Benefit deals are queuing up to be done, so firing the starting gun on that is a huge priority.
And then the transformation of REG to take a market lead and scale further.
TDD: How do you see your role at Disruptive evolving?
LJ: The extended reach of SMCR is, quite rightly, impacting all financial services businesses. It’s something we benefit from in terms of REG in fact. But internal to Disruptive, it means that like everyone, we’re having to run a ruler over all of our practices, and all aspects of compliance, to ensure we continue to deliver best practice. This is a focus for all of us.
But in due course, we want to see the Pension SuperFund fully realise its undoubted potential, and I’m excited to play a role in that.
TDD: What activities do you participate in outside of your corporate responsibilities that keep you balanced?
LJ: I still play football every week with my school friends. We’ve all moved into a wide array of professions, but the fact that we’re still together as a school gang is a source of great strength.
I am asked quite often to contribute to a number of BBC radio programmes which I enjoy. Most recently I did a review of George Clooney’s new version of Catch 22 with Anne McElvoy and the novelist Ben Markovits. Anne is scarily bright, so I was petrified – I think I’d rather have faced the Taliban again. But it’s great to be taken outside your comfort zone.
Two of my children work for startups; one works for a vegan frozen food company Allplants. And my daughter is relocating to San Francisco with her startup Zyper. I find every company endlessly fascinating and my children get bored of me asking about their business’s plans and financials.
TDD: What are you most optimistic or hopeful about?
LJ: Getting Brexit behind us. It’s not as an issue that effects our businesses, but any doubt or uncertainty is an anchor against moving forward as quickly as Disruptive would like. We place a premium on agility.
My children’s generation also fill me with hope. But they need engagement in a meaningful way. Margaret Thatcher rose to power because she gave people a real chance to own property. She also let them buy shares in privatised utilities. What I see with the younger generation is that they really want equity where they work or have worked. Equity could be the new council house. Making it viable and beneficial for all companies to increase employee ownership, that’s a huge opportunity. It aligns interests, meets aspirations and can be a boon to productivity.
Lastly, there is a seismic change coming in the way in which we pay for the internet. We have been paying for it with our privacy until now, whether consciously or unconsciously. Data centres contribute more to carbon emissions than the whole of the aviation industry put together and yet people can buy unlimited data storage for pennies and unknowingly using it to store videos of kittens in bow ties. There is a great deal of opportunity around all of that. Watch this space…