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Career paths - Lucy Merson

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Published: 26 May 2022

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Training as an ACA continues to help after the move from corporate finance to private equity, recounts Connection Capital investment manager Lucy Merson.
Lucy Merson

What got you into corporate finance?

I studied maths and Spanish at the University of Exeter. I wanted to keep learning, but also start earning money and accountancy seemed to tick all the boxes. I realised it would open doors to lots of different potential career paths.

I did an internship at BDO and was offered a graduate position in audit. After completing my ACA, I moved to BDO’s London corporate finance team in 2018. Corporate finance appealed because of the positive, energetic environment and the fact that work often centred on helping owner-managed businesses with their first M&A transaction – often one of the biggest moments of their lives. I primarily worked in growth advisory and, during the early days of the pandemic, in special situations M&A. When COVID-19 hit, the expectation was that there would be a lack of growth deals and the focus for accountancy firms would be business restructuring work. But as it turned out, both teams were incredibly busy and I ended up working on transactions with both teams at the same time.

Special situations M&A is intense, but I found it exciting. Often, any outcome is a good outcome, so it’s a surprisingly positive working environment. Both seats provided valuable insight for my subsequent move into private equity.

What were the challenges and benefits of the ACA?

The obvious challenge is working at the same time as studying – balancing the two. I had to learn when to say no, whether that was to work or social events. Also, I was working in audit, which by its nature means going into someone’s business and pointing out their mistakes. It can be quite confrontational if not managed well.

The ACA teaches you to communicate complex ideas to people while maintaining a good relationship with them, even if you’re challenging their perspectives. Not everyone in corporate finance has an ACA background and non-ACA colleagues have commented on the way it makes you think differently. They could see how it was incredibly helpful in the corporate finance world. I still find the need to refer to my technical background.

Why the switch to private equity?

As an adviser, you help a business to frame their growth plans for a private equity partner, but you never get to see them through. Now I’m getting a chance to see what happens next and make those plans actually happen.

I joined Connection Capital in October 2021 as investment manager in the direct investments team, focusing on private equity investments. My current role involves everything from sourcing deals, through diligence to completion, to working with portfolio businesses through to exit. I have three deals on the go, so there’s plenty to do. I also sit on one portfolio company board as a board observer. Connection Capital is a sector-agnostic investor and I enjoy that spread. The specialism is the size, focusing on businesses that have a proven model and are cash generative, making £1m earnings before interest, taxes, depreciation and amortisation, with the ambition to grow aggressively over the next five years.

Is there a deal that stands out for you?

At BDO, we worked with BridgeStreet, an international serviced accommodation provider, on the sale of the Europe, Middle East and Asia agency side of its business to National Corporate Housing. The UK part of the business was going into administration and we were tasked with selling part or all of it before or after that happened. It was interesting because it was owned by US PE house Versa Capital and the agency business was ultimately sold to a US buyer, so there were intricacies of UK insolvency law that we needed to make sure were managed properly, as part of a transaction between two US parties.

We went out to 100 buyers in two days and had two weeks to prepare the business for sale. Each buyer had a different perspective and comparing offers was interesting, to say the least. In a straight M&A deal, most of the time it comes down to value, but with a distressed transaction it’s a lot less clear cut as to what will be the best outcome.

What are your hopes for the future?

It’s early days. I’m really enjoying my work at the moment and could see myself staying in private equity and moving up the chain to investment director – hopefully within a few years – and maybe even to partner one day. I need to see a deal to completion first before I get too carried away!