A Q&A with Caroline Green MBE, CEO at Pallet-Track

In the latest instalment of our Private Equity People series, we speak to Caroline Green MBE, CEO at Pallet-Track and former PE investor, to find out more about her career and learn what makes her tick.

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"When pitching for funding, it's important to show your passion, your knowledge, and your aims. Talk about the things that matter and that gets investors excited." Caroline Green MBE, CEO at Pallet-Track

There have been plenty of magic people moments in Caroline's career, from being awarded MBE for services to the economy and to charity, to overseeing growth and success in her role at Pallet-Track (backed by TPA Capital). After starting her career at Xerox, Caroline moved to 3i and later Catapult where she found joy in making investments in ambitious businesses and playing an advisory role in their growth.

What attracted you to private equity earlier in your career?

Caroline shares: "I was intrigued by private equity when the opportunity presented itself to me earlier in my career. I’d already worked within Xerox and the PE firm 3i was looking for people with commercial experience. Because I wasn’t an accountant or from a corporate finance background, I was an unusual recruit.

"I quickly fell in love with it – it gave me that learning curve and variety, particularly working in the SME market, as 3i was at that time.

"Eventually – after I'd moved to the Midlands and had a baby – I was ready to take on a new challenge. I found that I wanted to own the totality of deals more, as that's what turned me on in the whole process, so I switched to a smaller fund; Catapult. It gave me the ability to look at the whole of the deal rather than just an element to it.

"Being in the Midlands, a lot of the work was manufacturing, heavy engineering and so on as well as tech, so once again I was getting that variety. I feel I've had such a privileged life to go and look at these amazing businesses, be nosey and ask lots of questions and meet great entrepreneurs.

“That's what I loved about private equity: the constant variety and the privilege to be able to go and be part of people’s business success stories."

How did your career as a CFO and later CEO differ?

Caroline’s successful PE career eventually led her to take on CFO and, latterly CEO roles. She was CFO at Metalrax Group (now Arc Engineering). "One of the hardest lessons I learned was when I was CFO at Metalrax and the 2008 crash happened. We had no cash – it was terrifying. That's a big difference from private equity where you’re one step removed. Now I was lying in bed worrying about running payroll for 750 employees the next day. That's a very different perspective. And even then, I was an employee. It wasn't my personal business. So that's still one step removed from an entrepreneur who might have their house on the line. You can’t learn that without living through it and it was a huge difference from my PE career.

"On a more positive note, I’ve had far more exposure to helping people grow and fulfil their potential as a CEO and CFO. The proudest thing for me is when you watch somebody who hasn't really realised their true potential yet and you give them the direction, the tools and the autonomy that empowers them to do it. That's the best thing ever because you know that you have enabled that."

What role does PE and a supportive board play in encouraging growth?

"PE-backed businesses are huge contributors to the UK economy and it’s a privilege to be part of their growth story. Great people are the key to every business' success and it’s really important that leaders and investors are capable of recognising the talent they have access to – and that they put the structures in place for them to understand their role and remit so they can thrive.

"Investing in talent, structure and process is one of the key preparation tactics a business can do to keep it safe from external pressures like recession or the Covid-19 pandemic. Knee-jerk reactions often prove to be misinformed; taking a calmer and longer-term view is far more useful."

Any advice for businesses about to embark on a search for PE funding?

"Securing successful PE funding all comes down to honesty. It’s so important to be honest with both yourself and the funder. If the goal is to scale and exit in five years, then say so – that’s a very different growth journey than planning to stay for decades and build the business yourself. Both are fine, but being honest will help you find the right PE house for your needs.

"When pitching for funding, it’s important to show your passion, your knowledge, and your aims. Talk about the things that matter and that get investors excited. Show your passion and how much you care about what you do, because there's nothing more dull than sitting through a boring slide deck where someone could just as easily be telling you what they had for dinner the previous night!

"If you're in a business you're not excited about, they don't stay in it. Go and find something that really excites you and ignites that flame, because life is too short."

How has the PE sector changed from your time in house?

"When I first worked in private equity, it was emerging from the bad reputation that venture capital deals in the 80s had given it. It’s taken a long time to rebuild PE's reputation to what it is today: trusted partners helping promising businesses to take the next step with guidance, care and attention.

"There’s a lot more focus on diversity now. When I worked at 3i, of around 400 investors there were a tiny handful who were women. That figure, thankfully, has changed to become more equal, but there's still a way to go to achieve true diversity in PE. There are huge benefits to operating a diverse model that’s reflective of modern society – people from different backgrounds, with different life experiences, all bring new things to the table. That’s exceptionally valuable when you're buying ideas. Everyone's different. Perspective adds value to that.

"At Xerox, the definition of diversity was 'if two people in the room think the same, one of you is redundant'. I love that, it sums diversity up beautifully."

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