Tuesday, March 14, 2023
THCP announces new investment into Kernel GlobalInvestment Activity
Three Hills Capital Partners (“THCP”) announces new partnership with Kernel Global (“Kernel” or the “Group”), which will see the Group receive an investment through a preferred capital instrument. Funding will be used to support the entrepreneur and wider management team in executing their ambitious growth plans, centred on continuing to build the Group’s multi-brand platform through both M&A and organic growth. In return for its investment, THCP will hold a significant minority stake in the business.
Kernel is a platform that invests in and operates high-potential recruitment businesses globally. It was recently ranked by the FT as one of the fastest growing companies in Europe and today it comprises two key brands:
Dartmouth Partners is an award-winning recruitment consultancy that is the market leader within advisory and investment markets. Niches include M&A, Credit, Private Equity, Strategy, CFO, Finance, HR, Investor Relations and Change Management. It uses a unique ‘Classroom to Boardroom’ approach, setting itself apart from other players in the industry. Dartmouth Partners has continued to experience strong growth off the back of this approach, with an impressive 65% of roles placed into PE-backed businesses being senior and C-Suite hires in 2022. It also supports diversity hires, with females accounting for 54% of the total placements across its core PE portfolio practice.
Pure Search is a global market leader with more than 20 years’ experience across the Tax & Treasury, Legal, CFO, Audit and Risk & Compliance recruitment niches. Its track record includes placing 30% of the current sitting Heads of Tax among the FTSE 100. It supports some of the best-known global brands within financial services, commerce and professional services sectors on the identification and hiring of exceptional talent.
Kernel is well established as a sector specialist, with over 280 employees and a deep network of more than 260,000 candidates, serving over 900 clients. CEO and founder Logan Naidu is an experienced entrepreneur with a strong track record of leadership in recruitment, having founded Dartmouth Partners in 2012. In parallel to the acquisition of Pure Search in 2019, Kernel was established to enable his vision of a multi-brand, multi-niche, high-quality recruitment platform.
Logan Naidu, CEO and Founder of Kernel said: “Over the last 10 years we have cemented our position as the go-to partner for our clients to find the very best people in financial and professional services, as well as high-growth aspirational companies. Through our various conversations we quickly saw THCP as the ideal partner to back us through our next stage of growth. THCP will accelerate our development and our own M&A and integration experience. With their support, we look forward to continuing to add trusted brands to our ecosystem, in addition to organically building out new recruitment niches to support our clients achieve the best outcomes when it comes to hiring top talent”.
Financial and professional recruitment services represent an addressable market of c.£8 billion globally, with Kernel already a specialised and trusted partner in the most active middle-career segment of the industry. The recruitment sector remains highly fragmented, with more than 40,000 firms active in the UK alone, presenting a significant opportunity for consolidation. The partnership with THCP will enable the Group’s leadership to combine their demonstrable experience integrating acquisitions into the Kernel platform with THCP’s track-record of supporting M&A within businesses it partners with.
Pablo Vélez, Partner and THCP Investment Committee member added: “We’re thrilled to have completed our fourth deal from our latest €1 billion fund, which has seen us deploy over 25% of capital in just five months from final close. Such high activity supports our thesis that hybrid capital solutions are becoming the preferred source of funding for entrepreneurs in the current market environment. This transaction has all the attributes of a classic THCP deal and we’re particularly excited about the market opportunity within the recruitment sector.”
Arjan Blok, Investment Director at Three Hills Capital Partners said: “Partnering with Kernel is an exciting opportunity for us to further cement and underpin the continued growth of a successful business model within a highly attractive industry that can benefit from disruption. We look forward to working with Logan and his team to help realise their plan to continue Kernel’s journey from a sizeable player to a diversified global market leader across multiple industry specialisms.”