BELFAST BRIEFING:CAN YOU imagine knocking at the door of a company in Northern Ireland these days and asking for a donation of £50,000 (€58,300) to fund a new business initiative? You would either need to be in denial about the local economy or have a "really, really good reason".
There is no doubt the main man asking for such a sum – entrepreneur Ed Vernon, chief executive of Northern Ireland-based private equity firm Synetecs – is quite up to speed on what is happening locally. So he must have had a really, really good reason for asking for this not inconsiderable donation.
If the net result of his request is anything to go by – 20 businesses in the North each gave him £50,000 or more – he did in fact have such a reason. How exactly did Vernon persuade companies to part with their cash in these challenging times?
“I told them they could be part of something that would be good for Northern Ireland, be good for their business, be different and create a lasting legacy,” he says.
The something in question is Riddel Hall Founders’ Club, which has helped to establish a new executive education centre at Queen’s University.
Vernon, the club chairman, is confident the initial investment by the 20 companies will deliver an important dividend which all of Northern Ireland will be able to benefit from. He says one of the chief objectives of the centre is to create a new partnership between the best academics at Queen’s and ambitious local businesses.
“This is more than bricks and mortar, it is about creating a new link between one of the jewels in the crown as far as Northern Ireland is concerned – Queen’s University, and the people who work, manage and own successful businesses here,” he says.
“Bringing these two unique things together – the university and local businesses – is important for future economic prosperity. It is going to provide a facility for local businesses to develop and learn from world-class academic experts. I am not saying it is going to solve all of Northern Ireland’s economic issues, of course it is not – but it will be a place that will open up people’s minds, collect intelligence and let them take ideas away that will help grow their businesses – and hopefully in the long run help grow the economy,” he adds.
Vernon believes the initiative echoes the Northern Ireland Executive’s core ambition – to “rebalance and rebuild” the local economy. He says it is time for everyone in the North to get “realistic”. “What is the best thing that Northern Ireland has going for it? Everyone else is bigger than us, some places can respond quicker, some are cheaper. What we have is people, great people, and they are our strength – we’ve got to encourage and foster our natural resource and that’s exactly what the new executive education centre will do.”
Membership of the club will also open doors for local businesspeople to hear at first hand from global business achievers. Over the next five years the club intends to bring a host of industry leaders to the North.
Tim Pryce, chief executive of private equity firm Terra Firma, which has invested more than €14 billion in the last 17 years, is the club’s first guest speaker. Terra Firma owns Phoenix Natural Gas in Northern Ireland, which supplies gas to more than 230,000 properties there.
Terra Firma has also acquired the large Slieve Divena wind farm in Co Tyrone, and AWAS, the commercial aircraft leasing group headquartered in Dublin.
Phoenix is a member of the club, but that does not stop Pryce from sending a chill down the spine of his fellow members in Belfast. He tells them the “economic and political consequences facing the euro zone are severe”.
Pryce says: “As the governments in Europe wrestle with the resulting crisis, we are unfortunately not going to see the sort of comprehensive and convincing strategy emerge that could achieve long-term stability. “Instead, we will see a series of ‘political fudges’ that will patch up the problems temporarily.”
This, in his view, could include a combination of possible outcomes: one or more troubled states could be ejected from the euro zone; there could be some level of bailout of poorer states by richer countries, but not a full bailout; or there could be some greater fiscal responsibility and belt-tightening at country level.
Whatever happens will not be pleasant, he says. “This slow and uncertain political progress will lead to volatility in the markets and create the kind of environment which stifles investment. We are not likely to see a return to growth and stability in Europe for at least the next 10 years.” Not exactly what you want to hear if you have just placed £50,000 of your hard earned cash on the table.
The focus for Northern Ireland and elsewhere should be on “encouraging investment to create, build and grow businesses of real value. This is our best hope for the sustained recovery in Europe we need to see,” he adds.
