Alderway Partnership Capital is bridging the gap for backbone sectors

What are Backbone Sectors?

Businesses operating in Backbone Sectors underpin the stability of the economy. These include Healthcare Infrastructure, Automotive, Logistics and Supply Chain, Specialist Manufacturing, Engineering and Industrials, Construction, Engineering and Maintenance, Energy Transition & Sustainability, and Agriculture.

Despite the enormous scale of their addressable markets and economic significance, for entrepreneurs building businesses in these sectors, it’s not unusual for them to feel overlooked and undervalued. As a result, businesses operating in these areas are substantially underfunded as a proportion of the global investment total. The world’s total GDP is roughly $100 trillion and about $80 trillion of that consists of physical industries such as agriculture, manufacturing, supply chain, logistics, aerospace and defence. The level of investment in these industries however, is nowhere near proportionate.

They will often have a number of structural advantages in their favour:

• Wide moats are possible: Opportunities exist for companies to establish wide moats, creating substantial  barriers to entry for potential competitors.
• Winners have significant pricing power: Successful companies within these industries can wield significant  pricing power, enhancing their profitability.
• Demographic tailwinds in their favour: Positive demographic trends further support the growth potential of  companies operating in these sectors.
• Margin opportunities: There are opportunities for improved margins through strategic initiatives and  operational efficiency.
• Active M&A landscape: The sectors present an active mergers and acquisitions landscape, providing potential  exit opportunities and value realisation with both PE and Strategics.
• Political, macro forces in their favour: Favourable political and macroeconomic forces, such as onshoring trends,  contribute positively to the investment potential.
• Post product/market fit (PMF): Our emphasis is on businesses that have achieved Product/Market Fit and are  poised for strategic scaling rather than chasing early-stage growth targets.

Partnership Capital

Our investing approach centres around alignment of interests between us and the people we back. We not only provide financial investment, but offer focused support through our Value Creation Programme, a structured approach to assessing each area of the business and working with management to identify those areas requiring improvement. We only invest in businesses where we know our experience can help to accelerate growth. We will support through the experience embedded in our own team, as well as a drawing on sector experts for even deeper insights.

We assess the investment requirement and will look to fully fund the business on day one, investing enough to ensure that growth plans can be achieved. We can be flexible around the structure and can help entrepreneurs to de-risk by realising some early liquidity, whilst retaining a substantial stake for a future exit event where we will collectively share in future success.

Alignment is critical in unlocking and realising the true potential value and is central to our way of working.