Much of TRICAPITAL’s work goes on behind the scenes, and members’ contributions, expertise, information and networks play a vital part. So, we thought it was time to get the inside scoop on the TRICAPITAL Monitoring Group, headed up by board member Ian Burton:
It’s a group of a dozen or so member experts who monitor portfolio companies, check board and company papers, and report back, highlighting any issues. The aim is to keep TRICAPITAL informed of companies’ progress, so that we can follow up on any concerns.
With companies where the TRICAPITAL investor agreement offers monitoring rights or where TRICAPITAL members have a large share of the investment, monitors monitor the performance of the company using company-supplied data. With companies with no monitoring rights, the group monitors using a variety of methods.
A TRICAPITAL monitor may have limited rights due to an often small stake in the business. However, where the stake is larger, the monitor takes on the role of a board observer, attending and engaging at board meetings.
In some cases, TRICAPITAL members may take on NXD roles. The NXD role is not a monitoring role – the monitoring role is given to an appointed TRICAPITAL member, to give the monitoring group an unbiased opinion on the business.
With others, the monitor monitors key financials and board papers, and reports back to the head of the Monitoring Group (currently Ian Burton). This feeds into a quarterly official ‘traffic light’ report to the TRICAPITAL board which flags up issues and progress. But if issues or questions crop up between those reports, we act right away. It’s vital to keep the flow of information going between TRICAPITAL and the portfolio companies.
It depends on the company and, to a degree, the level of TRICAPITAL investment. That aside, our expertise is valued by our portfolio companies at all investment levels, and we punch above our weight in terms of our contribution. Often, it’s just a case of clarifying points or making suggestions.
When a company is showing signs of failing and where TRICAPITAL members have a small stake in a business, we will challenge larger investors to hold the company to account.
If the TRICAPITAL members hold a significant stake, the head of the Monitoring Group will recommend a certain course of action and, with the approval of the TRICAPITAL board, Ian Burton will most likely engage more directly with the chairman and board of that business.
Members get a monthly report from TRICAPITAL Investment Manager Kathy Kinder, which gives a general overview of companies’ activity. This report is posted on ProSeeder, our online investment management software. The detailed traffic light reports on our 26 invested companies are reviewed by the board, and a particular traffic light report for any company can be accessed on request by members who have a current holding in that company.
Yes! Ian Burton is giving a presentation on the work of the Monitoring Group to the next TRICAPITAL members’ meeting on 5th June. Please come along – Ian will look forward to answering your questions.
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