In 1998, after 17 highly successful but strenuous years in the City, most recently as global head of investment banking at Deutsche Morgan Grenfell, Maurice Thompson opted for a break. During his year off he went horse riding in Pakistan and skied the haute route from Chamonix to Zermatt. Now 41 and back at a desk as one of five founding partners of European Digital Partners (EDP), Thompson is doing what, professionally at least, he enjoys most. That is “working directly with companies and having some impact on them, doing deals with clients and helping them to build their organizations” – as opposed to “sitting in the middle of an 84,000-strong organization”.
Thompson had perceived that “beneath the radar screens of these big behemoths that I was all too familiar with, there was a very interesting emerging economy that was not properly serviced”. After helping his friend Andrew Wilkinson, one of the managers of the Rolling Stones and numerous other rock acts, set up a rock music portal – music3w, a virtual shopping mall for the official sites of the likes of Robbie Williams and Elton John – he decided that “finding gaps in the market and building businesses based around internet and internet enabling technologies” was what he would do for his living.
“I was falling back on my service background,” he says. “At the end of the day I am not a rock entrepreneur, but I do find it interesting to apply some of the financing skills I have learnt to other businesses.” In the middle of last year, he joined Arkwright, which had been set up by Erik Fällström, Hakan Gomér and Peter Bahrke in the 1980s as an entrepreneurial strategy consultancy and investor in internet opportunities in the Nordic region.
EDP was launched in March this year with $100 million of capital. It is designed to be a “top performing early-stage new economy investor” and has Five offices across Europe and a marked Scandinavian focus. As well as relstionships with early-stage companies, EDP boasts close ties with the likes of Nokia and Ericsson, and according to Thompson is “pretty good at navigating companies through pan-European roll-out”. The partners of EDP own 60%, another 30% is held by Kohlberg Kravis Roberts and 10% is owned by the internet consultancy Halogen. It is the first time KKR has backed an external management team in Europe, a reflection perhaps of the breadth of credentials of EDP’s Five managing partners.
Besides Thompson, they are Jonathan Asquith (former COO and board member of Deutsche Morgan Grenfell) and Arkwright’s founders Fällström, Gomér and Bahrke.
“It had become clear,” says Thompson, “that to invest in the new economy, we needed four skill sets, a strategy consulting capability, venture capital – advice without money is a pretty weak cocktail – financial advisory and financial engineering techniques, and a technology solutions capability, which Halogen provides.” The partners all wear suits. “The entrepreneurs like it because we are offering a professional service,” he says. EDP achieved its First successful exit in May, when QXL acquired Bidlet, a Scandinavian online auction service which Arkwright had invested in in August 1999 through a share swap valuing Bidlet at $550 million. For EDP itself, the intention is to float “at an appropriate time”.
This is not the First time Thompson has found himself working in uncharted territory. In the mid 1980s, as global head of equity capital markets at SG Warburg, he had experienced life at the leading edge of the emerging European equity markets. Thompson had joined Warburg in 1981, after studying history and languages at Oxford (including a two-year stint in Nuremberg researching the role of the Protestant church in the Third Reich).
“Warburg was the best university course in finance you could possibly get,” he remembers.
In 1983, the bank sent him to work at Rowak, which had been given permission to operate as a pilot integrated broker-dealer a year before Big Bang, but in non-UK securities. “By pure luck,” he recalls, “I stumbled into the very early stages of the emerging euro equity market, when companies looking to diversify their shareholder bases, investors looking to diversify their portfolios and information technology all came together. It was a very unstructured and interesting business, which I was lucky enough to be in on the ground floor of.” Warburg became the leading European firm in this business while Thompson was head of equity capital markets. “Rather like the new economy today, it was unstructured and the prize was very high. We all felt that we were pioneers in building something pretty valuable.”
At EDP, Thompson relishes the fact that so many of his client companies are “extremely young and moving extremely fast. Of course it’s for real, but it’s pioneering country, which is why it’s so much fun.”
