Sailing to scaling: Laura Dillon on Waterland’s €2.5bn fund

Sailing champion Laura Dillon heads Waterland Private Equity Investments in Ireland, which has just revealed a €2.5bn European fund. She tells ThinkBusiness about her focus on SMEs with growth potential.

All good sailors know how to watch weather patterns and keep their eyes on the horizon. Good captains respect their teams. They also know the value of keeping vessels ship shape and in Laura Dillon’s case these sailing metaphors neatly apply to the kind of businesses she wants to invest in.

Appointed head of Waterland Equity Investments in Ireland last year, she is one of 100 investment professionals responsible for managing a new €2.5bn fund aimed at SMEs and entrepreneurs across Europe.

“We very much would see ourselves as a broad set of shoulders to take on some of those responsibilities that come with scaling”

The group, which has some €8bn worth of assets under management, is primarily focused on investing in small and medium-sized companies operating in four broad areas: outsourcing and digitisation, leisure and luxury, ageing population, and sustainability. Waterland typically takes controlling stakes in profitable businesses with earnings of between €2.5m and €30m before interest and tax.

The island of Ireland is a priority market for development and the company has invested in building a dedicated Irish team to drive its growth here. In the 12 months since it opened its Dublin office, Waterland has seen an increasing number of companies looking for capital and expertise to support their future growth. To date, Waterland has made investments in more than 700 companies across Europe.

Dillon studied chemical engineering in college, worked at McKinsey, did a Harvard MBA and was also the founder of a successful Irish SME.

Having narrowly missed out on qualifying for the 2000 Sydney Olympics, sailing is Dillon’s passion. In 1992 she won won silver at the Optimist world championships, the largest sailing class in the world. Four years later she took bronze at the youth world championships and became the only female sailor to win the Irish Helmsman’s Championships in its 60-year history.

The most successful European equity firm you haven’t heard of

Speaking with ThinkBusiness, Dillon said that despite the Covid-19 environment, transactions are continuing at pace and it is Waterland’s view that times of uncertainty are the best times to invest in and grow companies and this is reflected in the increasing number of companies looking for capital to support their future growth.

“You need to really focus on operations and making sure you have lean processes but also be able to see clearly the bigger picture strategy”

“Waterland was set up in 1999 by Dutch entrepreneur Rob Thielen and it very much centred on an ethos around partnering with entrepreneurs to help them build their companies faster than they could do by themselves,” Dillon explained. “We want to partner with companies that are already up and running, that are established and profitable. And very much what we do is continue to scale those companies as a supportive partner. We very much work in the background as a low-key kind of company, which is why you’ve probably never heard of us before.”

Despite this apparent low-key existence, Waterland ranks as the number 5 global private equity firm in the annual HEC Business School/Dow Jones Private Equity Performance Ranking.

Dillon herself is an accomplished entrepreneur having run her own healthcare company called DSI Distribution out of north Dublin which she subsequently sold to United Drug. “We were one of the first providers of cosmetics to Penney’s, one of the highest per capita sellers of fake tan. My dad was in his 70s and he became chair. We literally bought a warehouse, a forklift and we started distributing products to nearly every pharmacy in the country as well as Penney’s. The experience has given me a huge amount of respect for entrepreneurs.”

Prior to this experience and despite having worked at McKinsey and securing a MBA from Harvard, as Dillon admits she would have been naive about the real challenges facing business owners. “But the real world of making sure you get paid, that you have enough cash to pay your staff, suddenly that was my problem. We were good, we were lucky, we were profitable, but we also needed to work with our bank to enable expansion and I was signing personal guarantees to make that happen. So I gained a lot of insight.”

With more than two-thirds of Ireland’s workforce working for SMEs, many of which are family-owned businesses, and many of which are fighting to survive beyond the pandemic, how ready are Irish SMEs for the kind of growth trajectory that Waterland is pursuing?

“It is about creating a view of the future. There is a huge amount of successful SMEs here in Ireland and many are export-led. To be successful many have had to focus on international exports. Many also get to a point where business is successful and the ambition often levels off in some respects.

“But if there are companies that feel the business has a bigger future and want to drive that future growth, whilst also helping the family or shareholders to de-risk, they can take cash off the table and know that they’ve looked after their investors and their kids as well as their own financial stability. And having done that, they can also rest in the knowledge that there’s another phase of growth to go on. That growth could be driven by another family member, or a new professional management team. That’s where we could come in. But their thinking should be perfectly aligned around really continuing to scale the company. In many instances we do this through a ‘buy and build’ model as we grow our own platform. On average, we acquire five additional companies to grow each platform.”

Other scenarios include management buy-outs and management buy-ins. “In some cases there may be an existing shareholder that wants to exit, but there’s a very strong and committed management team who we could continue to back and support.”

With 10 offices across Europe, the Waterland model is fine-tuned to bring together groups of companies in specific industries to scale them up to compete on a global level.

“We’re typically a majority investor, anything from 50pc to 90pc-plus. We very much would see ourselves as a broad set of shoulders to take on some of those responsibilities that come with scaling. For owners we help release some of the pressure because with us coming in you have developed your own financial position, you’ve taken some money off the table and achieved financial security, and we’re going to continue to drive the business forward, source and execute M&A (merger and acquisition) opportunities and feed into the strategy. Ideally, we will help build an Irish company into a bigger business and take it international.”

Dillon believes that Irish businesspeople by their nature have always thought internationally. “We’ve always had to be international and entrepreneurial in our thinking. Because we have only 5m people here, but if we’re going to be successful you have to be serving people on a bigger scale. And that’s where we can help, especially through our network of European offices.”

A good example of a business that Waterland has backed and helped build to scale is United Pet Food. “When we invested in 2016 it was doing €100m in revenue, but now it is doing €600m in revenue. We have spoken to a bunch of pet food companies in Ireland, we acquired one in the UK and we are now the largest pet food manufacturers in Europe. It was originally very much a family-run company. And now it’s a much larger family-run company and we partnered with the family to help them deliver ambitious growth plans.”

An example of a major investment in Ireland by Waterland would be nursing home provider Silver Stream Healthcare that it intends to help to drive scale.

Operational thinking: how sailing and business complement each other

Asked about how her career in competitive sailing helped shape her business mind, Dillon said that sailing in her teens and during college on an international scale meant getting to grips with the realities of sponsorship. “It was a bit like having my own little business because sailing is an expensive sport. I had to figure out how to make it viable. If you want a new boat you have to be able to sell your old boat. So it taught me a lot about managing money and working in a business environment.

“In terms of what sailing has taught me in life skills, you’re definitely going to have to take risks, you try to do that in as safe an environment as possible. It teaches you about teamwork, how you have to delegate and you’ve also got to trust and build strong partnerships. Which is also very important from a business perspective. Leading a team of eight Dutch guys on a 41-foot boat will teach you a lot.

“For me, sailing has a lot of elements associated with business. You’ve got to make your boat goes fast and to do that you need to really focus on operations and making sure you have lean processes but also be able to see clearly the bigger picture strategy. Just like in business you need to be aware what your competitors are doing, what the waves are doing, what’s happening with the wind.

“Leadership is important, but teamwork is incredibly important. To have a strong team everyone needs to feel empowered, trusted and respected. And unless we’re all contributing and working towards the right endpoint, it’s not going to work.

“The biggest thing ultimately is to be passionate about what you do. If you’re not passionate about what you do, whether in work or in sport, you’ll never be the best you can be. Ultimately, it has to be something you are passionate about.”

By John Kennedy (

Published: 25 March 2021