There is capital out there looking to invest

‘The IPO market will recover when companies pivot and capitalise on the opportunities 2020 has generated’ says Richard Kennedy, Chief Executive at Devenish.

2nd November, 2020
There is capital out there looking to invest

What's your name and what position do you hold?

Richard Kennedy, Chief Executive at Devenish.

What are your day-to-day responsibilities?

I’m responsible for leading the Devenish group and ensuring the growth and profitability of the business.

I work closely with colleagues right across the business, including the executive board and leadership team, and this new virtual world has made joining team meetings across the business and indeed across the globe more accessible. I recognise that people look to me for leadership. Part of that leadership is to bring excellent people with me as I know that I can’t do all of it on my own. The success of our business stems from our commitment to teamwork, collaboration and trust – and I try to lead by example and instil these values in all of my colleagues.

At a strategic level, I spend considerable time engaging with our stakeholders, including customers, suppliers, research partners, investors and government.

What is your professional background?

I started commercial life growing up on my family’s livestock mart in Aclare, Sligo. I went on to secure a B.Agri.Sc from University College Dublin and specialised as a Pig Nutritionist. I’m a Chartered Director and hold a qualification from the Institute of Directors. For the past 20 years, I’ve held a variety of senior roles within Devenish and was appointed Chief Executive in 2015.

How do you see the current situation affecting capital fundraising for businesses?

The COVID pandemic has delivered a paradigm shift and now we need to take a much more long-term view. The pandemic has raised awareness of the importance of health and nutrition, including having a better understanding where our food comes from. At the same time, there is ever increasing demand for food that is produced with minimal environmental impact. Investors now have an absolute demand for companies to deliver on ESG initiatives. There are capital raising opportunities for companies like ourselves that are delivering sustainable food production and responding to the demand for authentic and transparent supply chains. Sustainability is in our DNA at Devenish – our solutions allow our customers, and ultimately the feed and food industry as a whole to become more sustainable.

What’s your view of the measures introduced in Budget ’21 to boost investment in innovative Irish companies?

There are a number of interesting measures in the budget. One that I would highlight is the ‘Shared Island Approach’ which has an allocation of €100 million a year for the next five years for all-island initiatives. The Taoiseach has emphasised the need to focus on innovation, proactive health, sustainability, and delivering environmentally positive solutions – this resonates with Devenish as an agri-technology business focused on developing sustainable food solutions.

When might the IPO market recover?

Companies focused on long-term initiatives that deliver on critical trends like sustainability, health, and safe, nutritious food will find opportunities in the current situation. There is capital out there looking to invest in those companies that are truly delivering ESG impacts and I believe that the IPO market will recover when companies pivot and capitalise on the opportunities 2020 has generated.

What are some of the new challenges growth-stage businesses encounter when they are on the lookout for new investors?

There are always opposing forces between an investor wanting to get a quick return and a company wanting to grow a substantive, long-term business. Today, with so much uncertainty, it is a challenge for investors to be able to assess the risk and align that with patient capital that can provide the support, rather than the pressure, on a growth-stage company.

What can the government do to attract private capital investment in firms and make equity financing easier to access?

Investors are attracted to long-term policy stability so providing certainty around the direction of travel in these very uncertain times will be important. A long-term strategy from the government will be key to attracting private capital investment and making equity financing easier to access.

I would call on the government to invest in long-term capital projects that are focused on delivering on Ireland’s needs for the future such as infrastructure, health and sustainability; while also building on Ireland’s strengths and the reputation it has built. We need new and dynamic thinking around how the state and business can work together to deliver meaningful outcomes.

What are the options to raise capital post-Brexit?

At this stage, we need Brexit to be finalised and have an agreement on the way forward. We know Brexit is challenging, but if we get a good deal there are also plenty of opportunities - not least given that Northern Ireland has a foot in both camps to some extent. Brexit can represent an opportunity as it brings a change in dynamic – if a company can embrace that and seize the opportunities within it and any new markets that may open up, it will increase the possibility of raising capital.

What’s next for your company?

We are exploring various options around raising capital as Devenish has ambitious plans to build our global footprint and we intend to secure further investment as part of that strategy. As a company, we are well positioned to benefit from a wave of regulatory change in favour of food production systems that better manage natural resources while reducing the impact on the environment. The global banking system will undoubtedly have a role to play in helping businesses like ours deliver our long-term goals.

Richard Kennedy is speaking at The Business Post’s Raising Capital Summit on Nov 4. Visit www.capitalsummit.ie for full details.

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