Bridgepoint | The Point | December 2019 | Issue 36
The interview
Alternative thinking
Tim McLoughlin joined PEI Media in October 2008, as the world was plunging into financial crisis. He knew nothing about financial markets, yet the alternative assets information business has grown exponentially under his stewardship.
There is a temptation among the managers of financial media businesses to think of themselves as being part of the markets they serve, general or limited partners in all but name. Tim McLoughlin has never succumbed to that temptation.
An applied chemist by training, he spent his early career at publishing and events group EMAP Media (now Ascential). There, he focused on business to business markets, covering brands such as Broadcast magazine, black-and-white photography specialist Shots and marketing outlet IMM.
“I was very experienced in the world of business publishing, but I had zero experience of financial markets. And I think PEI’s founders found that intriguing. They knew the types of people who worked in financial information publishing and they wanted someone different,” says McLoughlin.
That was 11 years ago, and McLoughlin joined as group managing director, later becoming CEO.
Even then, PEI Media was an established name in the private investment sphere. The website Private Equity Online and magazine Private Equity International were up and running, PERE had been launched as a publication for private real estate investment and work was under way on a digital product for the infrastructure sector.
Building on fundamentals
With around 60 employees and a burgeoning international presence, the London-based founders wanted to professionalise and expand the business.
“They wanted to build a business with good fabric and structure, so they wanted someone who understood goals, roles and responsibilities, as well as budget objectives, forward planning and such like. But they also wanted someone who wouldn’t wreck the business and its culture and who gelled with them – ideally someone they could go for a beer with and who could get stuff done,” says McLoughlin.
Born and bred in Lancashire, he was just the man for the job.
“I was fascinated by how things worked: not so much bubbling test tubes, flashes and flames, more the idea that you can take distinct things and bring them together to cause something new. Applied chemistry is all about taking deeply understood fundamentals and using them as a basis for improving process outcomes, scaling procedures and optimising reaction yields.
At PEI, we’re always looking to improve the formulation, the conditions and substance of what we do and attenuate the reaction conditions to produce superior outcomes. It’s a bit like a chemistry set
Close relationships
There’s a lot in business that I think about in the same way. At PEI, for example, we’re always looking to improve the formulation, the conditions and substance of what we do and attenuate the reaction conditions to produce superior outcomes. It’s a bit like a chemistry set and when you get it right, good things happen,” he says.
Over the past 11 years, many good things have happened, at least in part reflecting the solid foundations built in the firm’s early days. Many media companies have their roots in print and have struggled to adapt to the digital world. PEI was digital from the start. Initially, the team conducted video interviews with institutional investors and fund managers, and released them on disk for clients. This gave rise to Private Equity Online, while Private Equity International was launched some time later.
“We haven’t had the challenge of transitioning from print to digital. In fact, we’re platform-agnostic. We’re active in books, magazines, digital publishing, databases and conferences because they all work and they all have a use. That’s been part of our DNA from the beginning,” says McLoughlin.
PEI also benefited from being one of the first media companies to specialise in the buyout market, developing close relationships with general and limited partners in the private equity industry and gaining an in-depth understanding of the topics that interest them. Over the past decade, those topics have both broadened and deepened as the amount of capital invested in private markets has soared and the range of opportunities has grown. PEI Media has fostered and reflected these developments.
“When business to business publishing is done well, it can define markets and give people the flags to gather under. That’s what PEI has been able to do,” says McLoughlin.
A glance at the markets that the company serves highlights this evolution. From private equity and real estate in 2008, the group today also covers private debt, venture capital, compliance, secondaries investment and agriculture investment.
Everyone here can talk about the asset classes we cover, with the benefit of real knowledge. And that’s important. The people in our industries are smart, skilled and busy. They don’t want to read vapid, high-level stuff or enter into conversations at an amateur level. They want meaningful information
Subscriptions rocket
“As institutional appetite for private alternative assets has increased, the range and complexity of assets have also grown, and we have structured the business around that advancing appetite. We now address every form of alternative asset of any significance apart from hedge fund investment, covering the equivalent of 71c in every dollar of assets under management targeted towards alternatives,” says McLoughlin.
Around half of the company’s revenues come from digital and print-based publishing; the rest come from conferences and events. Both divisions are growing fast.
The subscription information brands have around 12,000 active subscribers, comprising institutional investors, fund managers and professional services providers. Subscriptions are growing at about 25 per cent a year and renewal rates are above 95 per cent. The events business delivers more than 50 conferences annually and has grown almost 30 per cent this year.
The pace of growth partly reflects the health of the markets that PEI serves, but it also underlines the quality of products and services that the company offers, as McLoughlin explains.
“Our products are on point and provide real value to users. That’s because we’ve taken time to understand the markets they operate in and the information they need. And we’re relentless in pushing every day – and with every iterative event – to make the things that we do more valuable to customers,” he says.
Meaningful information
“We also focus on details. Everyone here – whether they’re in editorial, advertising and sales or marketing – can talk about the asset classes we cover, with the benefit of real knowledge. And that’s important. The people in our industries are smart, skilled and busy. They don’t want to read vapid, high-level stuff or enter into conversations at an amateur level. They want meaningful information about topics that are difficult and complicated. In the words of [Canadian author and public speaker] Malcolm Gladwell, you have to ‘descend into the particular’.”
McLoughlin suggests that there is a symbiosis between the publishing and events divisions.
“We write about different sectors all the time and that furthers our knowledge of them. We talk to people in the markets, we know their concerns, and that knowledge is synthesised into an understanding of what would make an attractive, value-laden conference. So when we market that conference, people can see that it will add value,” he explains.
The PEI brand lends a certain weight to conferences, too, especially as some have been running for years. The CFO and COO Forum in New York is in its 17th year, while the infrastructure Global Summit in Berlin has been going for more than a decade.
“Some of these events are like Glastonbury – attendees put them in their diary early because they know they will meet like-minded people and they know the speakers will have something useful to say,” says McLoughlin.
Over the past 11 years, PEI Media has not just moved into new sectors and markets, it has also expanded geographically. Today, there are offices in London, New York, San Francisco, Rockville (outside Washington DC) and Hong Kong, with further outposts in Tokyo, Sydney, Pennsylvania and Florida. Employee numbers have grown to 330, with the headcount rising by around 25 per cent annually in the past three years alone.
Name: Tim McLoughlin
Born: Preston, Lancashire
Education: Newcastle Polytechnic
Family: Married with two children, aged eight and 10
Pet: An Irish terrier puppy
Hobbies: Cooking, playing the drums, listening to music, spending time with my family
Holidays: Anywhere where it feels wintry and windy
Car: Silver Land Rover
First job: Running building sites for my dad’s construction business in the summer holidays
Driving US growth
Bridgepoint Development Capital invested in PEI Media in 2018, since when the group has completed a significant acquisition in the US, buying assets, including PE Hub and Buyouts Insider, from Pennsylvania-based private equity firm Argosy.
“Together, they’re the most significant and established brands in the US market, so the opportunity to acquire them was very exciting. And the transaction more broadly will drive our growth in the US over the coming years, with real cross-sell and upsell potential in terms of both subscription information and events,” says McLoughlin.
“Bridgepoint’s external, dispassionate, non-sentimental view and their wealth of experience when it comes to acquisitions are very useful, particularly at this stage in our development,” he adds.
Looking ahead, McLoughlin is optimistic on several levels.
“Alternative asset markets are in rude health and the velocity of capital into them is astonishing. More money moving into these markets needs more management and more transactions. So every segment of our client base is growing, and even if the pace of growth slowed or stopped completely, we still have huge potential to grow simply by increasing our market penetration,” he says.
“Growth can be thought about in an ‘upwards and outwards’ sense, meaning more new customers in more new organisations buying multiple products. But it can also be thought about in a ‘down and in’ sense, gaining a deeper understanding of the layers and segments within existing market sectors and all the customers that PEI can further define and identify within such spaces,” he adds.
Every segment of our client base is growing, and even if the pace of growth slowed or stopped completely, we still have huge potential to grow simply by increasing our market penetration
Focus on technology
A portfolio company operating partners conference in the US is a case in point. A new area for PEI, it is both a logical extension of the group’s existing range of business and a move into a different stage in the private equity value chain.
Even as the company increases its employees, subscribers and conference revenues, there is a huge focus on technical proficiency, ensuring that PEI is digitally enabled to support and enhance growth.
“We are really investing in the operating fabric of the business, getting the digital piece right so we can grow even faster in the future. That is a key factor in our success: being able to identify customers, market products to them and track their response – that is all really important for a business like ours. And we need to make sure our digital subscription platforms are contemporaneous and can be easily extended and improved over time. Around 20 per cent of our staff will probably be techies in five years’ time,” says McLoughlin.
He was attracted to PEI by the founders’ entrepreneurial mentality and the lively, creative spirit within the business. And he has lost none of his early enthusiasm.
“I love this business. It’s the best version of a business I’ve ever seen. It works. We get on. And it’s still really driven and dynamic,” he says n