CVC’s Boughton on the value of venture philanthropy and the Impetus-PEF Triathlon

Date

June 21, 2015

“Behind the façade of financial services there are lots of people behind the scenes doing good things,” says CVC Capital Partners managing partner Marc Boughton. Indeed, the private equity industry is quietly using its expertise to support charities through venture philanthropy group Impetus-PEF.

CVC is heavily involved with Impetus-PEF, with Boughton sitting on the group’s board of trustees; GP commitments to CVC’s own foundation; hosting “Perfect Pitch” workshops to support entrepreneurs; supporting employee engagement – providing treasury, IT, interview techniques, strategy and accounting advice; and pro bono programmes with local schools to help young children. Boughton argues this engagement has come about as a result of CVC’s clear and targeted approach to corporate and social responsibility (CSR), and a genuine desire to utilise its network to do good.

Back in 2010, Boughton knew the GP and its employees were already doing a lot in regards to charitable giving but was aware the firm needed to establish a more systematic approach. The first job was to capture that data and formalise it: “The goal was to set up our own foundation,” he says. Having reviewed the GP’s activities and studied how other financial institutions were engaging with charities, CVC concluded its efforts needed to be global and relevant – to match its own network of offices, expertise and to encourage employee engagement to create a sustainable model – and its focus should be on young people, education and employment.

Boughton explains why venture philanthropy was the perfect fit for CVC’s corporate giving: “We decided to back Impetus and the Private Equity Foundation (PEF) because it uses the private equity model, so is a logical fit for us. Furthermore, when we first backed them, they already had an existing pool of portfolio charities so it made sense to work alongside an existing, successful model.”

For Boughton, it was vital to engage staff: “By having that existing pool of portfolio charities there was likely to be one that suited each employee, which allowed instant engagement.” It was equally important to engage CVC’s portfolio companies: “As responsible shareholders, we are striving for a world-class CSR programme and ensure our portfolio companies do too. We now have the structure in place to do this, combining best practice and creating a leverage effect,” he says.

The other attraction to Impetus and PEF was that both groups focus on CVC’s target domain of education and employability.

CVC now has three routes to charitable giving, explains Boughton. The first is corporate giving through venture philanthropy groups such as Impetus-PEF, Social Venture Hong Kong, Social Impact Partners and the Asian Venture Philanthropy Network. The second is for local offices to support local direct initiatives with funding and staff engagement. The third is an employee matching scheme, where money raised by individual staff members – by running a marathon, climbing a mountain or walking through the night, for example – is matched by the GP.

Post-merger
Impetus and PEF merged in 2013, which spurred trustees of both groups into action, thinking about fresh ways to boost engagement given the organisation’s new combined power. The board, chaired by head of KKR EMEA Johannes Huth, concluded it would be a good idea for each trustee to take on specific roles.

“The board wanted an industry-wide sporting event to supplement dinners and other fundraising events. We decided on a triathlon as a way to combine a fast growing sport (with the associated health benefits!), industry-wide networking, raising funds for a fabulous cause and some great competition. I was asked to look after the triathlon as, some years ago, I had completed triathlons and had experience at running mini rugby events,” says Boughton. “The BVCA and Human Race were keen support this, were ideal partners, and that was the genesis.”

Thankfully, then-BVCA chairman Tim Farazmand is passionate about venture philanthropy and social impact investing, so he was happy to oblige. “We valued his support in bringing together the entire BVCA community,” says Boughton.

Boughton and Impetus-PEF have an ambitious long term plan for the triathlon event. “We want families, investment and non-investment staff, existing and former portfolio companies and the private equity advisory community to come – we want it to be a ‘must-attend’ event,” he says.

It would seem this work is already paying off; last year the triathlon attracted 300 people and this year it aims for 500.

Boughton is concerned that people are put off by the triathlon because it is perceived as being an intense sporting event. “That is not the case,” he explains. “Most people think that it will be too hard, but it isn’t. Most people can swim for 20 minutes (any stroke), cycle for 45 minutes and/or run for 30 minutes and the relay is the most-attended event of the day. Training is fun and more varied for an event that takes between one and two hours rather than four to five hours for a marathon – and you don’t need a carbon bike, although many private equity triathlon veterans would disagree!”

Indeed, the relay sprint triathlon comprises a 750-metre swim, a 21.2-kilometre bike ride and a five-kilometre run, which – if split between three people – is no more than a normal training session.

“This event really brings everyone in the private equity industry together – the investment teams right though to back-office functions, and portfolio companies. We believe that more than half of last year’s participants were new to the sport and will be back this year,” Boughton says.

Portfolio dream
While Boughton is hugely enthusiastic about the work CVC is doing in terms of venture philanthropy, there is much more to do. He has a firm belief that the private equity industry can have a serious impact in this area, as owner of multiple businesses and, therefore, a mass employer. “The vision must be to encourage portfolio companies to create employee opportunities for the disadvantaged talent available because of their CSR policy – not because we’ve told them to do it,” he says.

CVC has already had success in this area, in particular, through its prior investment in Merlin Entertainment, which alongside CVC organises events for disadvantaged children at its amusement parks around the world and has provided employment opportunities. Similarly CVC has run ‘get into lifeguarding programmes’ with Virgin Active, whereby disadvantaged young people complete a two-week course and, to date, more than 80% of those who completed the course have found employment.

“Private equity is such a big employer in the UK, given that venture philanthropy uses the private equity model, it is obvious we should encourage portfolio companies to help tackle unemployment – even if that is just helping young people with work experience,” concludes Boughton.

To sign up for the Impetus-PEF triathlon, which is being held on Saturday 12 September at the Olympic rowing venue, visit the website here.

To find out more about venture philanthropy and the work of Impetus-PEF, read our latest coverage here.


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