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Insight CEO Interview: Jeremy Coller

Q&A with Jeremy Coller, Chief Executive Officer, Coller Capital

Jeremy Coller founded Coller Capital in 1990 following an earlier career with Fidelity and ICI Investment Management. Whilst at ICI Jeremy pioneered the purchase of secondary interests from European investors - that is, the acquisition of original investors' stakes in venture capital and buyout funds, or portfolios of small tech companies from corporate investors.

Jeremy is widely respected as a world-leading pioneer and innovator in the development of private equity secondaries. The emergence of secondaries is credited with significantly enhancing the attractiveness of early stage technology investment by boosting liquidity and flexibility, thereby reducing investor risk.

In 2001 Coller Capital delivered a key milestone for technology investment when it acquired a majority interest in 27 technology companies from Lucent's Bell Labs. This feat was subsequently repeated through a joint venture with British Telecom's corporate incubator, Brightstar.

Jeremy attended Carmel College and holds an MA in Philosophy from Sussex University, a BSc (Honours) in Management Sciences from the School of Management UMIST and the Diplome Cours de Civilisation from Sorbonne University.

Jeremy, you have achieved a tremendous amount with Coller Capital since founding the business in 1990. Talk us through the story so far.

After I had cut my teeth on a few secondaries transactions at ICI, I decided to found my own business and develop a secondaries market for Europe. It was such a novel concept at the time that it took me four years to raise my first fund. It's amazing how different things are now. Our fourth fund, which closed in 2002, raised $2.6 billion - the largest sum ever raised by a secondaries fund - and it is now fully invested. Our fifth fund will be larger still.

How do you see private equity's impact on the global economy?

The private equity industry has changed the way institutions invest in unquoted companies - which in turn has transformed the scale on which they invest. What made this possible was the advent of the closed-end fund. The fact that private equity funds have a finite life, usually 10 years, means private equity managers need to determine their exit strategy before they invest in a company. The industry today consists of teams of highly skilled, highly motivated people who want to create, or buy into, private companies, enhance their operational and financial performance, and get out again.

Private equity is having two positive effects on the corporate environment: internally, it is increasing the flexibility of corporate structures, and externally, it is breaking down the rigid, unhealthy barrier between the quoted and unquoted equity markets. Writ large, these changes amount to a new paradigm of corporate ownership and development.

The industry has another, often overlooked, benefit. The fact that the biggest investors in private equity are pension funds means that for the first time in history the man-in-the-street has access to the wealth-creating potential of dynamic private businesses. Coller Capital's funds alone represent more than 10 million pensioners worldwide. I like to think of it as the democratisation of wealth.

Private equity has a fantastic track record in stimulating and regenerating economies, and in creating jobs and value, but we should remember that it's still a very young industry - not much older than the internet! I think we've only just started to experience the kind of impact it will have - we're still in the opening chapters of the private equity story.

And what about the secondaries market?

The secondaries market is a niche, but it's an important and rapidly evolving one. A robust secondaries market is of strategic importance to private equity because it boosts the efficiency and effectiveness of the primary market - allowing investors to exit poorly performing funds and re-allocate resources to the most skilled private equity managers. It also permits corporate investors to exit or refinance under-exploited companies.

Coller Capital invests in a variety of different sectors. Where does the technology market fit in?

We have lots of experience in the tech market - indeed our Lucent deal really kick-started the whole concept of buying portfolios of small technology companies. We seek out small businesses with the potential to grow significantly - ones with new or disruptive technologies - and then ensure they get the capital to fulfil their potential before the market opportunity closes.

And how do you work with corporates?

Interestingly, we've recently seen a change of culture in some large corporates. They have moved from being 'good at inventing, but not good at commercialising' to wanting to capture and exploit the value of all their IP. Those that have made this leap tend to be interested in the kinds of investment and partnership we can offer. I think our offer is good for R&D departments too - the fact that companies can now easily monetise even their non-core innovation should help to reverse the trend of lab closures.

It's true to say that without us, many potentially interesting businesses and technologies would never have seen the commercial light of day. Most recently, for example, we enabled AEA Technology to streamline its business and reduce its debt by buying a disparate collection of no-longer-core assets. The investment we are now making in the businesses we acquired might never have been made without our involvement.

How important is the management when you are appraising acquisitions?

The short answer is: absolutely critical. We look very closely at the skills and experience of senior management teams at the time of our original investment - however, after that, we are 'hands off'. The guys who manage our investee companies have significant discretion as to how capital is invested to fuel growth.

This emphasis on people applies internally at Coller Capital as well. Much of our success to date is based on our senior management team, which includes five former CEOs. They work in an environment I would describe as disciplined entrepreneurialism. My job is to ensure they have the freedom, the drive and the incentives to succeed.

What is the future for Coller Capital?

Our ambition is to be the pre-eminent firm in our area of private equity. To maintain and enhance our leadership position in such a fast-evolving industry will mean significant changes. By 2010, we expect our business to look quite unlike any firm operating in our market today.


Under Jeremy's active lead, Coller Capital is continuing to drive the evolution of a global secondaries market in venture capital/private equity. Coller Capital is widely acknowledged as an innovator, continuously pushing the boundaries of what is possible. See www.collercapital.co.uk for further information.