Ei Managed Investments operations director Nathan Wall told delegates at The Morning Advertiser’s MA500 event yesterday (13 February) at Stamford Bridge, Chelsea, west London, it was looking for pubs outside of the capital to expand as seven of its 11 managed expert joint ventures were in the capital.
He added: “What do we want? Typically outside London, preferably. I have seven businesses that we are investing in within London. We typically invest up to £5m in one of these businesses, thereby, growing them.”
He also said that despite the sale of 370 of its 412 commercial properties, there was a possibility the division would be rebuilt in the future and the managed expert could help to push this.
He said: “The Managed Investment model is 1% of Ei pubs. At the end of last year, we had 47 pubs with an average turnover of just over £21,000 (per week). We had 11 partners [at the end of 2018].”
The operations director also revealed how the business works and how it tries to target potential new partners.
“The purpose is to operate like a private equity house. We try to identify talented operators that are seeking to grow their business,” Wall said.
He also outlined how the partners would take a management fee every month for their time. He added: “We both put start-up capital into the business but Ei has to own and control it. Usually about 75% ownership in terms of equity.”
Meanwhile, Ei Group set out plans to expand its estate of managed pubs to 460 sites in its trading update for the 18 weeks to 2 February 2019.
Published on 7 February, Ei revealed that its managed estate now comprises 398 pubs – an increase of 43 since 30 September 2018 – after the continued conversion of tenanted and leased businesses.
Moreover, the group announced plans to continue pub conversions, anticipating that 460 managed pubs would be trading in the Ei estate by 30 September 2019.