Letter One, an investment company who describe themselves as “a partnership of successful entrepreneurs and international businesspeople” has launched a new investment vehicle, L1 Retail, which consists of a $3 billion dollar fund to back “a small number of retailers that have the potential to become market leaders in their segments and markets”, across Europe.
L1 Retail has been launched alongside L1 Energy, L1 Technology and L1 Health to make strategic investments into emerging international retail businesses to “find and develop 21st Century retail stars, initially in Europe, including the UK, and in the emerging markets (with the exception of Russia).”
The founder of Letter One, Mikhail Fridman, says that “”Current trends in global consumer markets and on-going technological disruptions represent a unique opportunity to build hybrid platforms for growth and value creation in the retail space. As entrepreneurs, we have over 20 years built the largest food retailer in Russia. Our aim is to leverage our track record to invest in, and build, the next generation of retailers internationally”.
The investment team will be led by Managing Partner Stephan DuCharme, the former CEO and current non-executive Chairman of X5 Retail Group, Russia’s largest food retailer.
DuCharme has commented “We are looking forward to working together with experienced management teams to create new retail leaders. Our long-term investment time horizon coupled with disciplined execution of strategy, and our retail sector expertise, will open up interesting investment opportunities”.
In addition, L1 Retail has announced that John Walden, former CEO of Home Retail Group, whose previous roles also include Managing Director at Argos, where he helped transform the company into a modern digital player, before taking control of Home Retail group in March 2014, over-seeing Argos, Homebase and Habitat, and Clive Humby, co-founder of dunnhumby, which provided data analytics to supermarkets about their shoppers’ spending habits, have been appointed to the L1 Retail Advisory Board with immediate effect.
Says Walden: “I look forward to being part of something new and entrepreneurial – and to help build a new retail portfolio from the bottom up. The retail market is undergoing constant change. This is creating new opportunities for investors with real retail vision but also the ability to drive disciplined long-term execution of strategy”.
Clive Humby also commented: “”Understanding customer behaviour and adapting to new trends is the key to success. Data is the new oil. It’s immensely valuable, but if unrefined it cannot really be used. I look forward to working with L1 Retail to identify consumer emerging trends and themes as they invest in new platforms for growth”.
Given that the UK, and London in particular, is home to any number of emerging retail start-ups, often favouring techniques such as personalisation, machine learning, curation and AI to try to improve the customer experience, streamline services and collect data about their users, hopes must be high that some of the $3 billion will be spent on companies in the UK.
L1 Retail’s investment team will be based in London, with over 70 years’ of combined investment and retail sector expertise.
LetterOne manage investments across 32 different countries around the world into technology, health, energy and now retail, and is also a passive investor in private equity funds managed independently by Pamplona Capital Management, the specialist investment manager.
Interviewed on the company website, Chairman Fridman explains that LetterOne was founded by a “group of friends from University – we established our first business as entrepreneurs, employing other students from different universities in Moscow to wash windows”, and that “the way we work as partners has been fundamental to our success.”
He goes on to add “It is important for us to work with people we respect. We recruit sector specialists who have distinguished themselves in their fields. We want them to enjoy the intellectual challenge and opportunity to work with us as partners. We are, at the end of the day, a small company, made up of less than 100 people. By being open, we make sure we learn from our successes but also our mistakes.
LetterOne say they are actively looking for new investments – it seems certain that Stephan Ducharme’s diary will be filling up fast as we head into the New Year.