Utilities, and the deregulation of the water market

In 2017, the water market in England underwent deregulation, allowing water retailers to package wholesale services from infrastructure owners and sell them directly to businesses. This opened up opportunities for private equity firms to invest in water retailers.

Perwyn, a private equity firm, became involved in this sector in 2018, investing in Everflow, a water retailer. Since then, Perwyn has seen significant growth and success in its ownership of Everflow, eventually achieving both partial and full exits in 2023 and July of this year, respectively.

Throughout this journey, Perwyn's Andrew Harrison and Mike Rothwell, a partner and investment manager, respectively, have been actively involved in the firm's investment thesis, Everflow's expansion outside of water, the long-term durability of demand for water, Everflow's management team, and the challenges of scaling a business.

The firm's expansion beyond water services, such as broadband and waste collection, has been a key part of their strategy. They believe in the long-term durability of demand for water, as it is a necessity for businesses and households alike.

Everflow's management team has also played a crucial role in the firm's success. Perwyn prefers to run the business without operating partners, allowing them to maintain control and make strategic decisions.

Scaling a business, especially in the water sector, comes with its own set of challenges. The firm has had to navigate these challenges to maintain growth and profitability.

Additionally, the appeal of outsourced water management has grown, as businesses look for ways to focus on their core operations while leaving water management to experts. Everflow has driven customer retention through its comprehensive offerings and commitment to quality service.