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The spirit of Equistone

What does Equistone value? The firm recently completed an exercise to elucidate the answer. Ross Butler met Guillaume Jacqueau to find out more.

BENEATH THE NAME, the logo, the offices, the people, the production, even the reputation of a company lies a shared yet often unspoken perception of value. When people agree on what is valuable, their goals align and their culture binds. What does Equistone value?

I had the chance to ask its managing partner, Guillaume Jacqueau.

“We want to be transparent. To say what we do and do what we say. Trust. We want to trust people and we want people to trust us. We never do a deal without trust. It is also the basis of the relationship between our team members.”

To this, he adds “complementarity”, “respect” and “humility”.

For Guillaume, these five values contain the secret of Equistone’s success.

I have been engaging with the firm since 2002, first as a journalist, later as a supplier, and the question I really wanted him to answer was this: how come everyone is so nice? If this seems superficial, consider that while niceness is not rare exactly, it is hardly a prerequisite to success in private equity – and yet it is palpable and persistent through a firm spread across multiple geographies that operate largely autonomously. It can’t be by chance.

“Humility is important,” says Guillaume. “You have to be very vigilant when successful not to become arrogant. I hate arrogance. Whether you are successful or not, you have to remain humble in any case.”

This is a big part of the puzzle. I’m personally not sure that humility is even seen as a virtue in the business world anymore, having been superseded by more self-centred attributes like ‘passion’, ‘boldness’ and ‘determination’. Humility is even rarer in finance, I offer.

“We are not in finance,” says Guillaume. “We are in a people business, and what makes our organisation different is people. I want people to behave in a way that respects these values and protects our reputation. I tell the team and new joiners that I want people to be willing to work again with us. M&A advisers, managers, auditors. They should say Equistone are top people, they are fair people..”

Values tend to be elusive, deeply embedded if not fully articulated. How have they come about?


The firm gained its independence from Barclays Bank eight years ago, while its heritage stretches back some 40 years. When it spun-out, they lost the Barclays name and might have lost the impetus for staying together. On the contrary, says Guillaume, the spin-out “created the glue” between the teams.

“At the time, there were a lot of questions about the structure of the business, as well as challenging questions about the economy, macro questions about Europe. But we had a common track record together, and we had strong conviction that the team could do great things if we remained cohesive.”

At the point of spin-out, the firm made everyone in the deal team a partner, and the Equistone partnership remains large to this day.

“That’s quite rare in our market to have such a large partnership. For us, it was very natural. I don’t think there was any question that the group of people involved in this adventure, roughly 30 partners, should be part of this equity story, and this is now part of Equistone’s DNA. It makes the team very stable, and reinforces trust between us.”

But the firm’s culture wasn’t forged Day One of the spin-out. As Guillaume points out, “Barclays was also part of our history.” He says that the firm gained a sense of discipline, and perhaps conservatism, from being part of that global financial institution, albeit a discipline that required adaptation to the private equity context. The team spirit that became so evident at the point of independence had also been a long time in the making. “Graeme [White, Head of Barclays Private Equity from 1997 to 2005] introduced the common goal and the start of the European team spirit, that was his initiative.” Equistone is an unusual mix of a strong local identity with an overarching European culture, something Guillaume considers ‘the best of both worlds’.

“We are stronger together and we knew at the time [of the spin-out] this was a strong way to differentiate from most of our competitors – most of which are local funds. People who meet us like the idea of talking with a French, a German, a UK team, but with a European institution and fund behind it, and the capacity to grow their business internationally.”

We are stronger together and we knew at the time [of the spin-out] this was a strong way to differentiate from most of our competitors.

“Discipline and enthusiasm”

Talking about values can be abstract. How do they apply tangibly to the quotidian interactions and decisions of a private equity firm?

“Private equity is a mix of discipline and enthusiasm,” says Guillaume. “If you want to perform well in private equity, you must combine these.”

It follows, then, that successful values should support this balance between discipline and enthusiasm. Take trust. The risks of investing in a private business cannot be fully accounted for in advance, no matter how diligent you are. Given this, investors can either dress up their research and quantitative analysis as the last word in effective decision-making, or they can acknowledge the importance – even the indispensability – of subjective judgement.

“External trust relates to the quality of the relationship of the management we are working with,” says Guillaume. “I strongly believe if you don’t have mutual trust between the Equistone team and the management team, then you should not do the deal. This is subjective. It is not a perfect science. That’s what makes it so exciting. My personal view, after 30 years, is that the key decision is do I trust this guy? …and does he trust me? That is a function of intuition and experience.”

Trust is also essential within the firm. The decision to join forces as autonomous regional entities and yet share decision-making and economics, between many people, requires a huge degree of trust.

If trust and transparency can underpin confidence and enthusiasm in a deal, a value that encourages effective oversight or discipline, is respect. Particularly in a decentralised organisation, saying ‘no’ is difficult. For Guillaume, it’s how you say it that matters.

“You should not say no because of a lack of trust, but for objective reasons. Discipline is about retaining the ability to say no. Having respect for someone includes having the capacity to say no to them, and [to justify it].”

Achieving this level of discipline has also required structural adaptations. As Barclays Private Equity, between 2005-2010 the firm’s investment committee voting procedure was led by the three co-heads, each of whom had a veto. Guillaume describes this as a ‘nuclear button’, and as such, it was never used. On devising Equistone’s new IC constitution, the veto rights were removed in favour of majority decision. Guillaume believes this has created a more disciplined organisation. “It makes the decision better quality.”

New blood

Recruitment at Equistone is a local decision which is shared at the European level. “Local recruitment is logical and a good way to keep the culture. But I could not recruit 15 people in France. I would have to share it with my European partners. So there is a balance of European discipline and local initiative.”

The private equity decision process involves a huge number of criteria – different sectors, marketing, finance, legal, human relationships. It is so complex you need many profiles around the table.

The successful candidate will be cognisant of, and attracted to, the local-European structure, and be aware of the consensual nature of the firm, from sharing decisions to carried interest. They will also be aware of what Guillaume calls “complementarity.” In other words, the Equistone team see their role as supportive and catalytic, not as didactic executive-decision makers.

The firm hires broadly and puts its faith in ‘collective intelligence’. “You must bring together different profiles in order to make good decisions. The private equity decision process involves a huge number of criteria – different sectors, marketing, finance, legal, human relationships. It is so complex you need many profiles around the table.”

Additionally, Equistone has something of an advantage in keeping its culture alive. Guillaume doesn’t like the phrase ‘deal machine’, but that’s what they are, and every engagement in the market – buying, selling, adding-on – is an opportunity to reinforce the Equistone way of doing things. “Activity is the best way to keep people aware of the culture. Activity makes things concrete, whereas principles can seem abstract. Transparency, respect, and humility have to be applied in our interactions on a daily basis, so people understand how important they are.”

But there are occasions when every organisation has to do the hard thing. Not every recruitment decision works out and replacing management teams is a fact of life. What then?

“Sometimes you have to remove a CEO. We hate doing that. But it’s part of our job and responsibility. We are often challenged by our LPs who ask, what are you doing with regards to management team efficiency, are you willing to change the team? The answer is yes, we do it, but we do it with a high level of respect for the people involved.”

Equistone is also disciplined about its own business. When raising their latest fund, they were offered significantly more capital than they asked for. Instead, they chose discipline. “It would have been detrimental to the cohesion of our strategy.”

At the same time, the firm is open to new ideas and strategies, but the IR team and management board are very conscious that any new strategy “must respect the model.” If a compelling opportunity in Germany, say, doesn’t apply as well in the UK, then this upsets the firm’s balance. New strategies have to work for the whole partnership.

Two more values

There are two more values for the apprentice deal maker to consider. Which value informs Equistone’s strategy in the face of recession and socio-political upheaval? Answer: “Pragmatism”.

“Every situation is specific and you have to adapt to the reality of the market,” says Guillaume. “There are no golden rules, it’s all case-by-case. Whatever the macro context, with the right level of discipline and enthusiasm, we will always find opportunities.”

In this context, pragmatism appears to mean a willingness to look beyond conventional wisdom and to make judgements on specific circumstances. It is a value that feeds enthusiasm and allows Equistone to consider investments that others dismiss. Similarly, its multi-country fund could have avoided UK deals in the Brexit mayhem, or amid the political climate of France in 2012. Such pure ‘discipline’ would have been easy to justify. Indeed, in a lower trust environment it would have been impossible to avoid.

Companies don’t choose whether to have a culture, but they can choose what kind of culture they want. Those based on hierarchy, defensiveness and objective rationalisation appear unimpeachable, and for some companies this will work well. In more complex and uncertain domains, where data is limited and objectivity only gets you so far, there is a need for something different, and that appears to be values that are closer to moral virtues. Perhaps that’s because traditional values are better adapted to tackling an unpredictable world.

In the face of such unpredictability, Guillaume offers a seventh and final value. “For me, Continuity is very important.” We are speaking in Equistone’s 40th anniversary year and, in that time, its values and its equity story have evolved slowly. Its managing partner takes comfort in that. “As a Frenchman, I am wary of revolutions.” 

A full version of this article appeared in PLATFORM 03, Winter 2019/20