A Greater Divide To Strengthen The Investment

Late last month, Unity Group’s maiden public-listed investment The Marketing Group or TMG (founded by Unity under the Agglomeration? model), released its first set of full year results. As we worked up to the date of the announcement, we received the exciting news that renowned industry veteran, Mr Don Elgie, who was already well-versed in the demands of public company leadership and highly experienced in executing on a highly-acquisitive business model, was on the cusp of accepting a position to helm the Group’s board of directors as non-executive chairman.

At the time, I occupied the executive chairman role on the Group’s board of directors and four other Unity Group partners and executives also sat on the board as directors. We had firm confidence in the operations and founders of individual subsidiaries and how synergies within the network compounded what each brought to the table, but when we received news of Don’s impending appointment, the talent that TMG was able to attract led us to appreciate that the Group’s development had reached a level that confounded even our own expectations.

As investors, Unity’s executive involvement was always meant to be transitory and while we were kicking the race off, we were also on the constant lookout for strong, suitable leaders for the Group. Our search for fitting successors concluded much more quickly than any of the partners had anticipated. Challenging as it was, we stayed focused on what was best for our first public-listed portfolio company and decided that it was time for the Group to run its next mile under the watch of industry veterans.

At listing, I was placed in the curious, unique and privileged position of having simultaneously worn the hats of founding member, executive chairman, substantial shareholder, continued investor, public spokesperson and public persona of the Group. This unintended blurring of lines made it difficult for TMG shareholders to see that as investors, Unity’s interests were in line with other stock owners. We believe that by taking this step to draw a clearer distinction between Unity and TMG, our alignment with TMG shareholders will be strengthened further.

Unity Group, through its subsidiaries and equity partners, remains one of the largest shareholders in TMG and although we have relinquished representation on the Board at this time, it is our intention to remain active as investors. We have stayed in close, frequent communication with the leadership team to date and plan to keep this dialogue active, providing a channel for us to give feedback on strategic direction. By combining the TMG team’s industry experience with the Unity team’s investment experience, it is our firm belief that all shareholders stand to benefit.

Public lessons for the private investor

As exhilarating and all-consuming the past months have been, our (very public) baptism of fire resulted in a few key learnings for us at Unity, the most important of which is that lessons on public equity capital are taught by the market and conducted in full view of the public, whether they are market participants or apathetic onlookers. While we didn’t expect the course to be plain sailing, we believe we have come away much better-informed on the divergence between stakeholder management for public and private equity investments. It is important that we fully take on board these lessons that came as a result of the speed and velocity at which circumstances were evolving.

Moving forward, as Unity strides ahead on new investments and value creation in 2017, we will apply the lessons learnt on communication with public equity markets.