Profiling UK Public Leaders: Interview with Neil Sinclair (LSE:PRIS)

Profiling UK Public Leaders, Episode 6

Neil Sinclair took his first company public in 1987 and has run listed businesses ever since, now Executive Chairman at Pristine Capital. Put his experience in order and it amounts to a single argument: the buyers of small-cap shares have changed completely, so the way you raise money has to change with them.

The buyers changed

When Sinclair's first company floated, its shareholders were almost all institutions, and that stayed true for decades. Today, he says, institutions screen on scale and liquidity before anything else, and a small company fails both tests before the quality of the business is even discussed.

What is left is retail and high-net-worth money. In 1987, a company like his would have paid those investors almost no attention. Now they are the market.

So the playbook changed

If your buyers are individuals rather than institutions, they have to know you exist before you ask them for money. Sinclair spent around six months building Pristine's profile through webinars and investor platform events, well before any transaction, precisely so that nobody would say "never heard of them" at the moment it mattered.

But awareness on its own raises nothing. Investors, in his experience, do not like handing money to a company with nothing in front of it. They invest on the back of a deal, and the first deal has to be compelling enough that they feel they cannot afford to miss it. Once you are established, later deals are judged more forgivingly.

The consensus is usually unresearched

Sinclair's best advice is to take advice, because markets keep changing under you. His worst is people telling him something cannot be done, and he has a story that separates the two.

At his previous company, Palace Capital, the business signed a deal to buy a property portfolio worth many times its own market value, meaning it had to raise most of the purchase price to complete. Mid-process, the broker handling the raise collapsed. He pitched eight replacements: six refused outright, one asked what he was smoking, and the eighth took it on and got the money away, the last of it landing on the final afternoon.

The distinction he draws is between advice built on research and opinion built on consensus. The six who said no had done no work on the question. They were repeating the mood of the market, and the market was wrong.

His summary of thirty-eight years is short: take advice, judge it, and back yourself.