February 2017

A French raiding party landed in London this week, bent on charming financial services away from the City post-Brexit. As you might expect from the language of love, their only weapons were words.

Pitching to a bunch of hard-nosed bankers — many of whom probably own apartments in the 16^th arrondissement anyway — was never going to carry the day with talk of Coq au Vin, the Rive Gauche or the Folies Bergères, n’est-ce pas?

Valérie Pécresse, President of the Parisian region, former Sarkozy budget minister and seductress-in-chief, had to be more commercial than that. So her brochure (an 18^th century French word meaning ‘pamphlet, or sheets stitched together’) listed the business benefits of crossing the Channel: lower income tax for ex-pats, lower commercial rents, a deep talent pool and two international schools near the business areas of Paris. There was even a humorous swipe at their arch-rival: ‘When was the last time you thought of taking your partner for a nice weekend in Frankfurt?’

But the London bankers weren’t so easily won over. They were concerned about political uncertainty and how hard it is to fire people in France. Perhaps they had visions of Marine Le Pen brandishing a French tricolour atop the barricades of economic nationalism, promising French jobs for French workers.

Valérie and her team came here to lure (‘attract a hawk by casting a lure or decoy’) business to the City of Lights, to woo, court, tempt, enchant, charm, beguile and fascinate — all words related to seduction and witch-craft.

Did the magic work? Only time will tell. The affair has not yet been consummated.

In my book and in my workshops, I assert that structure is more important than language. No matter how wonderful your writing is, if the whole document is ill-structured and un-navigable, you’re likely to lose your reader.

Try this for size.

Create a hierarchy: headline – sub-heading – topic sentence – (meaty) paragraph OR WiT (Word in Tables).

Your headline is your big picture, a hint to the content and a hook for the reader. The sub-heading is (or should be) a descriptive, informative summary of that document section. Then you open a meaty para with a topic sentence that’s an emboldened, one-line summary of that para. Simple as. Here’s an example:

PROJECT ABC: what progress did we make in January 2017?

This document sets out an update from our last meeting and some initial research on our latest Project ABC target, XYZ.

Update from our 12 December 2016 meeting

I believe our Project ABC methodology works well. I understand PPR is actively pursuing Target Inc. This was one of the names that the new methodology helped us identify in Project ABC — the AIM-listed work I did with Roger in Q3 2016. I suggest we look at HSA as a priority; Roger is helping me with this.

I have pulled together a team for project ABC. Roger, Debbie and Paul have agreed to help with this initiative in some capacity, subject to other work commitments. While Debbie will help Roger with AIM and FTSE company identification, Paul will help me with our leveraged loan list. We may need another admin assistant later on, but for now we’re OK.

[ Then, if you have even more detail, you can put that into Words in Tables, developed by Jon Moon who offers downloadable templates here. ]

Why we selected XYZ as a target

The loan is trading below par	XYZ’s TLB is currently trading at 87.75p in the pound on the secondary market. The 2nd lien piece is trading at 70p. This suggests that lenders hold some concerns over performance and that there has been some value erosion. The situation is not too bad, however, given level of discount on the loan, which means we could be an early mover.
Leverage is high	Q3 leverage was 4.5x, albeit down from 7.7x in FY15. This is higher than opening leverage and lease-adjusted leverage is reportedly even higher. FX Partners did a dividend recap in 2014 to take 33% of equity off the table, so any restructuring might have heightened tension between the stakeholders.
Financial performance is behind budget	Revenue was 3% behind budget in Q3; EBITDA was 25% behind for the same period. Moody’s downgraded the company to Caa1 in February 2016. 2015 had negative cash flow.
This is a good size company	There are more levers to pull and more opportunity for finance (debt and equity) with a larger company. EV at purchase was EUR 343 million, 3rd biggest in the world in its field, biggest in Europe.
We know the sponsor well	We have many contacts with TTT partners; attached is the Zapier download. As you mentioned last week, Dev has done some work for TTT on Cato Ltd in the past, as well as DD on STA and BY&F. We have done some German/pan-European work with them for a clothing manufacturer.

What are the benefits of ‘layering’? Your reader can choose what level of your document to read:

1. Headline only
2. Headline + sub-headings
3. Headline + sub-headings + topic sentences
4. Headline + sub-headings + topic sentences + detailed content

Layering also makes it quicker and easier for your reader to find the relevant stuff and skip the rest. They’ll love you for it.