Posted: Tuesday, 11 June 2024 @ 10:01
In 2014 Rivers collaborated with capital markets and investments firm, LGB & Co., in order to set up a medium-term note (MTN) loan programme. This enabled the company to raise funds flexibly, as and when required, as it has grown its business. Here, LGB’s Managing Director, Simone Westerhuis, reflects on a decade-long relationship and what makes Rivers a good partner.
A growing partnership
Together we took time to understand our respective businesses and the company’s needs and business model before establishing the programme and issuing a first note in January 2015. Since then, the relationship between our firms has gone from strength to strength, as we enjoy a like-minded approach that has resulted in many more investment rounds, happy (and repaid) investors, and (tellingly), reinvestment from many of those who have been involved.
The hallmarks of a good partner
We are selective about the clients that we work with and there are some key things we require in a business. We look for strong management teams with clear objectives. We look for companies with a robust business model, which can be articulated to our investor base, instilling confidence that the company can implement its business plans. Transparency, openness and engagement are high priorities.
We always hope that a client relationship will be long-term, and the one we have with Rivers very much sets the standard. With that in mind, our structure does not have a definitive time for maturity. The relationship can stay for as long as the business is functioning, and with each raise we are able to introduce new investors looking to establish laddered portfolios of fixed income with us. The amortising structure of the notes work extremely well within an investment portfolio as it provides a lot of liquidity over the life of the investment. Investors also enjoy the opportunity for re-investment as they get to know the company.
Strong management speaks for itself
One of the things we really value in Ratan and the team is their pragmatic approach to management. They like to keep things straightforward and are very good at explaining their business to investors. That is essential.
Notably, the way Rivers responded to Covid provided a lot of confidence during a turbulent time. The company was at the sharp end of the impacted industries and Ratan spoke to us straight away. He did not try to hide the difficulties the business was facing with its underlying customers, but laid out a plan directly to us and to our investors. Investors were happy to provide the company with flexibility on its repayment, as they were kept well informed and could trust that the management team was doing the right things, acting prudently and in the best interests of all stakeholders.
The result was that Rivers successfully navigated the period whilst supporting its SME customers. Investors were pleased with the actions of management and consequently many who had been involved chose to reinvest when the company started lending again.
One of the benefits of having worked with Rivers for so long is that our MTN business has grown at a similar pace. The partnership has been symbiotic. What is exceptional is that 64% of all those who have invested in Rivers have done so multiple times since the inception of the loan note programme. It shows that Ratan and the company have built significant trust, which is a credit to their outstanding track record as well as the excellent investor communications they have upheld.
Working with good people
Alongside the numbers, it is also important to note that it is an absolute joy working with the team at Rivers. They have a lot of nice people within their ranks, whose integrity, professionalism and diligence has allowed them to build a good reputation within their industry. That is the kind of people we like to work with and we look forward to continuing that relationship - who knows, maybe for another 10 years!
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