Podcast: Avero Advisory founder Robert Young features on the Merger Talks podcast
Founder & Managing Partner, Robert Young sat down with Lazo Cetnik, Managing Director at Pretraga Partners & host at Merger Talks Podcast to discuss founding Avero Advisory, the firms differentiation, the impact of AI on banking and recently completing an Ironman.
You can listen to the full episode here: (Spotify / Apple podcasts ), or find the transcript below.
Read on or skip to the questions your interested in:
Key trends in the technology sector
How you test for grit in junior bankers
What makes a good team culture
Whether you ever considered quitting and what kept you going
How you spent your first analyst bonus
Your most memorable story from a deal
What you get up to when not working
Ironman preparation and the event itself
Host: Tell us a little bit about yourself.
Robert: Sure. I’m Robert Young, I'm the founder and Managing Partner of Avero Advisory. I've been in advisory for about 16, 17 years now. I spent the last 12 of those at Catalyst, which subsequently became Alantra. I was an MD there in the tech team, spent most of my time in software, but I've also transacted in tech services, and I've worked across quite a broad range of subsectors within software. So everything from data and analytics to human capital management, supply chain management, FinTech, ESG tech, the list goes on.
I've worked across quite a broad range of capital solutions as well. So everything from growth capital raises to full sales to MBOs on both the sell side and the buy side. I've worked very closely with private equity through my career, and I spent the last three years on the UK board of the business, which I really enjoyed; a fantastic experience having that wider responsibility across managing teams, thinking about how to motivate and incentivise people.
I left the business in April last year and put a plan together to launch Avero.
Host: Congratulations on doing so. It's very exciting to start your own thing. What made you do that?
Robert: I had a fantastic run at Alantra. I really reflect on my time very positively there. I worked with some exceptional bankers, some really good people, but I had always had a bit of an itch to set my own business up. It's something I'd considered for quite a few years, but I had always come to the conclusion previously that whilst I was growing professionally, there were never any push factors, the time wasn't right, it's obviously got risk attached to it.
And then last year, I concluded that I was ready for the challenge. You've got to stop waiting for the right moment: you've got to make the moment right instead. Something which I reflect on a lot is that I'd rather take the risk and risk failing than fail to take the risk. And above all else, I really felt there was an opportunity to bring investment banking capabilities and services and deliver them in a very differentiated manner. So the ultimate aim of the business is to do that, to deliver exceptional results for our clients, and to do so in an environment that is enjoyable and that I'm proud of.
Host: That sounds awesome. As we know, there's a lot of competition out there, lots of technology teams, technology boutiques, doing the same kind of thing. How are you going to differentiate yourself?
Robert: Yes. There's a few different angles to this really. First and foremost, I think about the proposition to the clients, which I'll come back to. Secondly, it's about the internal environment and the culture that we're working in. I really want the office to feel somewhere between an investment bank and a tech business. Clearly, you have to prioritise professionalism, and that's the most important thing but I want the business to feel a bit more relatable to the client base we're working with and I really want to challenge the status quo.
Coming back to that proposition to clients, which as I say, is ultimately most important, the thesis behind Avero is really bringing larger investment banking capabilities, experience and expertise, but delivering that in a more agile way, with a much more dynamic model.
I talk about five pillars to the team that really contribute to that. The foundation is that we provide an exceptional level of service to our clients. It's a very dedicated and focused service that we're providing, we're not going to be volume players, we're really going to be focusing on quality over quantity, and ultimately giving founders the attention that they deserve when often they've spent many years of their life building a business, and exiting is quite often the most important event of their lives.
The second is bringing a highly experienced team. The firm is new, but we're very, very seasoned advisors, we've completed well over 100 deals between us. We've completed highly complex deals, international deals, we've sold to trade, we've sold to private equity, we've seen lots of different situations and scenarios. So we can ultimately apply that within the new business.
Then it's about the deep sector expertise that we bring. We are specialist advisors who really understand the value drivers in the tech sector, understand the buyer landscape, how to position businesses and how to run processes.
The fourth is then the tech enablement of our own business. We've had the advantage of really starting with a clean slate, we've got no legacy technology, we've got no standard ways of doing things. So we've gone out at what I think is a really exciting period for investment banking technology, and we've picked what we think are best in class tools, platforms and databases, and we're really making our own proposition more effective, more efficient for our clients.
The final point is around the international buyer and investor access that we can offer our clients. I've built a network of advisors internationally, mainly in the US, but we've also got coverage of Europe. So we can still offer that international access and service, even though we don't have boots on the ground there.
So it's not necessarily one thing that really makes us unique and really differentiates us, but it's when you bring that IB level of expertise, combine it with the agility and the entrepreneurialism of a smaller firm, and then all those different pillars, that results in us offering a differentiated proposition.
Host: That's really helpful to understand. And I really like the fact that you're trying to combine the two: the traditional investment banking skillset, with the mindset of your clients. So talking about the technology space, what are the key trends happening right now?
Robert: It's an interesting question. AI is the biggest buzzword at the moment, has been for a few years now. I remember going to conferences 18 / 24 months ago, and every single stand and keynote was all about AI. But it was really in its infancy at the time for most businesses, and they actually didn't have functioning capability, despite what they claimed or what their vision was. Now, that's evolved enormously, but there's still a huge amount of uncertainty as to whether AI represents a risk or an opportunity, and how far and wide the impact will be. I think in almost all cases, it's probably both a risk and an opportunity. So it's a case of working out where on that spectrum different businesses or different sectors actually sit.
I tend to think about a few different angles: how you can drive efficiencies through internal operations, then the actual client proposition, how you can drive new product sales, how you can drive new capabilities. I've got lots of clients who are quite early on that journey themselves.
The common question that I get asked is, how far down the path do we need to go to see value when we come to selling our own business or going through an MBO. And it's quite an interesting question, because in simplistic terms, you'd say the further the better, but actually, the pace of evolution introduces so much risk and unknown that for me, it's actually about trying to find a middle ground where you do see some value, as long as you can deliver ahead of the competition, but you're not waiting years because you just don't know what's going to happen. None of us really know what things are going to look like in two years, let alone five or ten years. So as I say, it is a bit of an unknown for everyone. That also makes it really exciting for us as businesses and investors: trying to pick the winners in the AI game.
Host: Absolutely, super exciting times. Whilst we're on the topic, it'd be great to hear your thoughts on AI within dealmaking and how it's transforming the roles of bankers, especially junior staff. With that in mind, what advice would you give to somebody entering the market now?
Robert: The advice I'd give someone is to not over rely on AI. It's clearly immensely powerful and we're embracing it for our own proposition. But what's really important and what I say to both clients and juniors alike is that you've got to combine it with expertise and experience. There's a real risk of something called ‘chauffer knowledge’; I don't know if you've heard the expression, there's quite an interesting story behind it, but it essentially refers to the knowledge that is merely repeated or presented without a deep understanding of the subject matter.
And I've seen it firsthand: I've seen analysts who will deliver a fantastic piece of work, that looks incredibly impressive, but as soon as you scratch the surface or challenge some of the detail, they’re like a rabbit in the headlights because they don't actually understand what they've put in front of you. They've perhaps used AI to generate some content or do some analysis and they don't have that deep understanding. So my advice is that there's no real shortcut to experience. So when you're a junior in particular, you've got to make sure that you understand absolutely everything as much as you can; act as a sponge. That's the advice I was given, which I think is still relevant, and that will ultimately pay dividends as you work through the ranks.
Host: Great advice. Whilst we're on the topic of giving advice to junior bankers, I've got another question for you. We know investment banking is a tough industry. How would you test for grit in junior bankers?
Robert: Grit is something that's not easy to test, but it's a vital ingredient. I always say to my team that in junior bankers, I'll value character over ability every day of the week. I think someone with a good attitude, who's willing to work hard, and has an appetite to learn will be far more valuable than an A-star student who thinks they know everything, but isn't reliable. It's quite a tough one to test though.
I take signals from lifestyle. For example, when I first met Jack, our analyst, I learned that he had just done a Hyrox and was currently training for an Ironman. I've just done an Ironman myself so I had some understanding of the level of commitment that you need to train for and complete something like that. And I thought for a 22 /23 year old, that is really quite impressive to have the focus, the discipline, and as you say, the grit to commit to something like that. Freddie, our AD is also a multi-marathon man. So again, he's showing determination and willingness to take on challenges. I'm not saying by the way that it's all about being an endurance athlete, but I think playing competitive sport or those kinds of character traits are valuable. Aside from that I’d like to think I'm a generally good judge of character, so I think people have just got to show their own personality, their own character. Don't oversell yourself because you'll get called out, and that costs you more than you could have gained.
Host: You mentioned earlier you were on the UK board for Alantra. Having been involved in incentivising and rewarding staff, what makes a good team culture?
Robert: I love that you've asked that question because we used to say at Catalyst and then Alantra that our culture was a real differentiator for our business, and I absolutely believe that it's key to succeed in any people business, but even more so when you're working the long hours we do and you spend so much time together. When I was setting up Avero, almost the first place I started was to consider what my own foundational values were and what I felt was important from an organisational value perspective.
I pinned it down to five areas, which are: acting with integrity and doing what's right, building a reputation and trust. Secondly, it’s about collaboration over competition for the team. We work together, we enjoy the good times, we stick together through the tough times. Thirdly, I talk about challenging and disrupting, so not following the status quo, not settling for mediocrity, making sure that we challenge each other in a constructive manner and using tech to enhance our own proposition. And finally I talk about the value of having a growth mindset and enabling those around us to develop both personally and professionally, making sure that we've got a positive and enjoyable work environment. And as I say, we spend a huge amount of time together, so it's important that we have a little bit of fun along the way.
Host: Good stuff. You mentioned your Ironman excapades, so I'm guessing you've got a fair amount of grit yourself. However, was there ever a moment in your career that you ever seriously considered quitting? And if so, what kept you going?
Robert: I don't think there was in all honesty. I feel pretty lucky to have worked for some really high quality leaders, some really good people. I've always felt I was working in a business with a purpose. I've enjoyed what we do. I've always felt like we were treated fairly, which was almost my number one ask of a boss and something that I try to bring back into the new business now. And don't get me wrong, I've worked incredibly hard, and sometimes in the early hours of the morning, you do question whether it's all worth it, but I think that hard work is a vital ingredient for success, especially when you're younger, you've got time, you've got energy, you've got fewer responsibilities, so I've always taken and continue to take the view that that pays dividends. The learnings early in your career compound and they help you develop as you go through your career. They make you a more complete advisor; you can say you've stood in the junior’s shoes and you've practiced what you're now preaching, you've got a deeper rather than a surface level of understanding. So I've never really had a problem with the hard work. And if I'm honest, I'm not a quitter, so I'll give it my all if I'm going for something.
Host: Good to hear. Rewinding to your analyst days when you were pulling those kinds of hours, do you remember what you spent your first analyst bonus on?
Robert: I'm not a hugely extravagant spender, so this might disappoint you or your listeners a little bit, but I think with my first slightly more substantial bonus, I bought myself a nice watch, which I'm wearing today and still love. It's a Omega Seamaster Planet Ocean.
Host: Looking through your career, what's the most memorable story from a deal?
Robert: I've got a few I could probably talk to. Probably my hero story, if you like, was a very material deal that we completed in record time. It was a business that we as a firm had worked with through multiple transactions. They were going through a secondary, PE to PE transaction. We were speaking to a few of the incoming investors, picked a party that we thought was most deliverable, had the most conviction, and aligned with them on the buy side. They actually had so much conviction that they essentially completed all of their work independently ahead of first round bids - this was before the majority of materials had even been released so there was no diligence available, there was no QofE analysis, no commercial diligence, etc, so it's incredibly rare to do as much work as they did pre-first round bids without access to those, but it meant they could turn up at that first round bid and deliver such a comprehensive offer document face-to-face, and it essentially illustrated that they had materially completed all of their diligence. It showed how much work they'd done, and they essentially said in the document, if you give us the green light, if you accept our offer, we will deliver these terms within 48 hours, which is rapid speed.
This was on a Friday afternoon, so we were all waiting fairly anxiously on the Friday night. Nothing came until late, so I had gone to bed, and then woke up Saturday morning to a flurry of text messages, voicemails, WhatsApps, emails from our managing partner at the time who was leading on the transaction and had to get my ass into the office sharpish. This was only about 9am by the way - I hadn't slept in till the afternoon! We ended up working all through Saturday night, which I've not done too many times in my career and pretty much through Sunday night. The deal was completed late Monday morning! That was the largest ever deal I'd worked on at the time, about a half a billion pound deal, and definitely the quickest I'd ever worked on. We went back into the office after completing at the lawyer's office on the Monday and got a bit of a hero's welcome!
Host: What was the reason why they wanted to hurry through it so rapidly?
Robert: They were just trying to differentiate themselves on the transaction. They were trying to present that they were more deliverable; they could de-risk it for the sellers. It was still an attractive offer, so it was just about really standing out and getting ahead of the competition.
Host: Well, it seemed to have worked! Good stuff. And when you're not working all weekend, closing these types of deals, what do you get up to? What keeps you busy?
Robert: Free time has been a slightly distant memory over the last six months or so, which I accepted when I decided to set the business up. Equally, I had a little bit of time off between leaving my previous role and starting Avero to train and spend a bit of time with the family, so I'm not complaining by any means.
I like to try and keep myself fit. I think it's important for both body and mind. I've got two young kids at home, so I like spending time with the family on the weekend, getting the kids into sport, whether it's on the golf course, or the football pitch. So that's what I really look forward to.
Host: And the Ironman was last year. Tell us more about that - the preparation, what that involves, and what the event was actually like on the day?
Robert: So I suppose I have to go back to my dad who inspired me to take on an Ironman. About seven or eight years ago, he set a world record as the part of the oldest pair to row any ocean in the world. He rowed 3,000 miles across the Atlantic, completely unassisted at the age of 62.
Host: So a fair amount of grit about him as well!
Robert: Just a little bit, yes! I said to myself a couple of years ago that I really want to set myself a proper challenge. I wasn't a runner, I don't think I'd ever run more than 10K in my life. I was a very poor swimmer, and I'd never really ridden any road bikes. So I thought, with major weaknesses in all three triathlon disciplines, an Ironman made sense! It's the hardest one-day endurance event in the world, according to many people, and that's what I wanted to set my sights on. And I have to say, it was a real journey for me in pushing my own limits, and dedication.
It's probably something I reflect on with slightly rose-tinted spectacles if I'm honest, because getting up at 5am to go and swim in a relatively cold pool or getting home at one o'clock in the morning and knowing I've got to go and run a half-marathon at that time wasn't the most fun I've ever had: pretty miserable at times. But I do think it's easy to say, “I'll do X” or “I'll do Y one day”, and it's easy to have excuses, but you never know what's around the corner, so sometimes you've just got to commit to these things, and have absolutely no regrets.
Host: Absolutely. A final question for you. If you could have dinner with anyone, famous or not, alive or dead. Who are you picking and why?
Robert: Oh, I'm not sure I've got a well thought through or cliched answer for you here…I'm a Ricky Gervais fan - I think he'd be good value at dinner. I used to love The Office, I think that's quite a natural manner for him. Then I'd probably pick some kind of athlete at the top of their game. I think it'd be really interesting to talk to them about their own competitive mindset and their own motivations, their discipline. Especially someone who's maintained it over such a long period. I think about someone like Spencer Matthews - I was never a Made in Chelsea viewer, so I didn't know him from those days, but I think the physical challenges that he's taken on are just absolutely incredible. I have a small level of appreciation having done one Ironman, but he did 30 marathons in the desert in 30 days. And he did seven Ironmans in seven continents in 21 days, so I'd quite happily listen to him talking about what motivated him and how he keeps it all up. And a third, I quite like an Alex Hormozi; he's a little bit bro-sciencey, but he's a good no-nonsense individual: talks a lot about hard work, taking responsibility and having a growth mindset. I'm not sure the three of them necessarily go together, but they'd probably be three of my top picks.
Host: Good picks. It would be an interesting conversation for sure, as has this one been. So thanks so much for coming on the show, it's been a pleasure. Good luck with the business!
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