Tuesday 18 June 2019

Caan do: ex-Dragon on hunt in Ireland

Serial entrepreneur James Caan wants to take Irish recruitment to the next level, writes Business Editor Samantha McCaughren

James Caan says he will invest millions in the Irish economy. Photo: Daniel Lynch
James Caan says he will invest millions in the Irish economy. Photo: Daniel Lynch
Samantha McCaughren

Samantha McCaughren

James Caan, the Pakistani-British entrepreneur probably best known here for his stint on BBC's Dragons' Den, says he has a 'soft spot' for Ireland. It's a claim many people around the world make, but for Caan his appreciation comes from his first-hand experience of one of Ireland's more successful and wealthy female entrepreneurs Rosaleen Blair.

After setting up a nanny recruitment agency in Dublin, Blair moved to London and began working for Caan at his recruitment firm Alexander Mann. In 1996 she took over a division of his business, Alexander Mann Solutions, later acquiring it in a management buyout. In May that business changed hands for $1.1bn.

For his part, Caan sold out of Alexander Mann in 2002 but is naturally impressed with what the Irishwoman went on to achieve.

"Rosaleen was a phenomenal success globally. And therefore I have a clear soft spot for the Irish market because clearly Rosaleen has demonstrated that a successful female entrepreneur being head of an organisation can truly create wonders."

Caan has gone on to focus on private equity and his latest venture, Recruitment Entrepreneur, describes itself as "a global investor in early to mid-stage recruitment businesses".

He has recently turned his eye to Ireland, investing in specialised recruiter 360 Search, headed by Lynda Barnes.

While scepticism about the potential for jobs creation on the back of Brexit has seeped into discourse in Ireland, Caan firmly believes Ireland will be a beneficiary of Britain's exit from the EU.

"Strategically as a business we had identified Ireland in January and said if Brexit goes the way we think it is, growth opportunities are going to be quite attractive. I estimate the financial services alone will create between 10,000 to 20,000 jobs," he says.

"The only reason you haven't seen absolute numbers is because of the lack of clarity around an actual deal being struck. What we are doing is we're taking a decision that says we want to be ahead of the curve, we don't want to wait like a lot of people are, and say 'let's see what happens'," he says.

Caan says he knows there is appetite among many companies to locate operations in Ireland.

"I'm seeing a huge amount of interest in financial services that have identified Ireland as a very exciting market prospective. And what we need to do is have that infrastructure in place prior to that."

In addition to the 360 Search investment, Caan and his team have been scoping out other opportunities to invest in recruitment in the Irish market. He expects to get three more deals over the line in the next few months.

Caan's aim is to bring greater scale to the firms he backs, although says that it is the entrepreneurs themselves that he invests in more than the businesses.

Entrepreneurship is in his blood. Caan moved to London from Pakistan as a young child, and watched his father build up a business from nothing in a new country. Instead of joining the family business, Caan went out on his own, leaving school at 16.

"I think I always knew from the beginning that I wanted to be an entrepreneur, I wanted to run my own business. I love the excitement and the feeling of being independent and being in control of my own destiny which employment doesn't naturally give you," he says.

He stumbled across recruitment but quickly knew it was a match for his personality. At the age of 23, he founded Alexander Mann, which he describes as his "first baby".

No costly branding experts were brought on board when he was creating the business - the name was conceived of at his kitchen table.

"I just wrote down names that described the image of the company that I wanted to create - professional, global, with integrity, something that would be perceived as upmarket. And I wrote all those words down and said what name would I associate with all those characteristics and for some reason, [I picked] the name Alexander, maybe because of Alexander the Great or it just had a very upmarket feel about it and then came up with the name Alexander Mann."

He found an office in Pall Mall, believing the address would reflect that image he was trying to portray. With a budget of only £50 a week, all he could afford was a broom cupboard with no windows. That was no impediment and the company was sold in 2002 for a "substantial sum".At the age of 42, Caan went to Harvard Business School "to learn what could have happened if I'd had the education".

"As I came out of Harvard, the key buzzword in early 2000s was private equity, everybody was talking about private equity."

So in 2004 he established his own private equity firm called Hamilton Bradshaw. He later joined Dragons' Den which he said was "the most amazing experience for four years".

His current project is Recruitment Entrepreneur (RE), which he says "has done fantastically well in the UK".

"We're just not moving into Ireland. We launch Germany next year and next year we're going to do Germany, Singapore, Melbourne and Beijing.

"So I want to turn Recruitment Entrepreneur (RE) into a global brand. I see Recruitment Entrepreneur being over 1,000 people to becoming the same sort of scale and size as Alexander Mann," he says.

He believes that Brexit will bring huge opportunities for Ireland and RE will help scale the businesses he invests in.

"What is lacking in the Irish market that I've seen is that you've got a lot of small businesses that are what I call boutiques and there's a lot of big brands also," says Caan. "I think the bit in the middle is very slim, I think small is there, medium isn't.

"What I want to do is take the small and turn it into medium. So, I'm interested in that five- to 10-man operation that wants to become a 50-man operation."

While he expects substantial jobs growth here, there has been an increasing amount of noise about housing and how that might restrict jobs growth.

Caan isn't overly concerned. "I don't think it's going to stop people moving over. Because I've seen economies around the world where there's been a massive shortage but if you're a business and you need talent and you need it now, you'll find a way of housing that talent.

"But in terms of sustainability, if the government wants to boost the economy, if the government wants to ensure that they have businesses that choose Ireland as their destination, then they have to address the housing issue. Otherwise they'll miss out on those businesses that will find an alternative place to Ireland."

While Caan is investing in Ireland, he declines to reveal how much he is investing in 360 Search or the potential size of future investments here.

"It really depends on the scale, the size, the number of people," he says.

"It's fair to say that we will be investing several millions into the Irish economy in order to maximise the opportunity."

While Irish small companies - including those in recruitment - might benefit from Brexit, some observers feel British SMEs might not fare so well.

As former chairman of the British Government's Start Up Loans scheme, which provides funding and mentoring to budding entrepreneurs, Caan is close to the SME sector.

He thinks small business will find opportunities.

"In each situation, people will find an angle that will play into the whole Brexit arena and take advantage of that. So do I think it will have a detrimental effect? Absolutely not."

As a former Dragon on television, it hasn't escaped Caan's attention that reality TV entrepreneurs have developed a taste for public office.

His experience of working with government means he has reservations about mixing business and politics.

"You need somebody who is a visionary," he says of Ireland's presidential election, "which every entrepreneur by default needs to be, so I think that they absolutely have the right traits."

"But even Donald Trump, the biggest challenge he finds is he can't get his own way because he can't just unilaterally make a decision without the Senate or the House to back him. It's very much around making decisions through committee and for entrepreneurs that's incredibly frustrating because we're just not used to it.

"I don't think you should underestimate the qualities that career politicians have, because they actually have got the experience of knowing how to get things done, how to get decisions made because it's an environment they're used to and we're not."

 

CURRICULUM VITAE

Name: James Caan

Age: 57

Position: Entrepreneur

Lives: London and Thailand

Education: Left school at 16, later studied at Harvard Business School

Pastimes: Listening to music, favourite artist George Michael

Favourite place in world: Monaco

Favourite movie: The Godfather

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