When London-based husband-and-wife duo Sameer Rizvi and Iryna Dubylovska quit their investment banking jobs in 2015 to start their own investment firm, they had little idea of the success it would become.
RDCP Group (www.rdcpgroup.com), initially known as RD Capital Partners, is a permanent-capital investment conglomerate that does not manage external investors’ money, but instead has grown organically through a series of intelligent investment decisions made by Sameer and Iryna over the past six years.
“We had to beg, borrow and steal to pull together our $3 million of initial capital back in 2015. Instead of giving an equity share for this capital, we offered a fixed double-digit rate of interest. This way, we were able to retain our 100% shareholding in the group and all of our future acquisitions. By the end of 2021, after 6 years of compounding and a total of 18 acquisitions of great British businesses, this initial $3 million will have become $400 million,” explains Sameer Rizvi, Founder & CEO of RDCP Group.
RDCP is currently working on completing three live acquisitions. Once completed, RDCP will have successfully made 18 investments that have been consolidated into 7 companies, employing more than 2,300 staff members in the UK.
RDCP Group is very openly modelling their investment business on Warren Buffett’s Berkshire Hathaway. “We gain inspiration from only a handful of investors and business leaders – Warren Buffett and Charlie Munger rank on the top of that list,” says Sameer.
Iryna Dubylovska, Founder & Chief Strategy Officer (CSO) of RDCP Group adds that “just like Warren Buffett, we are long-term investors. Our favourite holding period is forever. We have never sold any of our businesses because there is no point in interrupting a compounding machine.”
RDCP Group competes in the same arena as mid-market private equity firms, bidding for businesses that generate between $2 million to $20 million in annual EBITDA. “Entrepreneurs and business owners tend to choose us over private equity buyers for a number of reasons. We are investing our own balance sheet capital, whilst private equity investors are essentially middlemen, investing on behalf of others and just collecting a fee for doing so. Private equity buyers also tend to be focused on “exits” as they need to return their investors’ capital after three-to-five years, whilst we have the luxury of providing long-term permanent capital to our portfolio companies,” Sameer explains.
“Quite simply, we did not leave our cushy investment banking jobs to once again end up working in a toxic short-term focused fee-driven business such as private equity. Instead, we wanted the freedom to make investments for ourselves and build our very own Berkshire 2.0 here in the UK,” says Iryna.
RDCP Group is making a name for itself in the UK mid-market investment space at a time when there is pressure on private equity firms to reduce their unjustified fees and improve their mediocre returns. Many entrepreneurs and sellers are choosing to partner with RDCP as a trusted investor, one that provides a safe home for their businesses and their staff.
RDCP Group has ambitious plans to grow their assets under management (AUM) from $400 million to $1 billion before 2025. “We will continue to invest our growing balance sheet capital into promising British businesses that have a profitable trading history, determined management teams and a dominant position within their respective sectors,” adds co-founder Iryna.
Sameer says “ultimately, if we want to be taken seriously as an investment firm, in the UK or the US, we need to be controlling at least $1 billion in assets. We want a seat at the table and we will work hard to make sure we get there by 2025.”