Inside Retail: When did you first have the idea to launch a private equity firm?  Kate Morris: My experience of being a woman founder trying to raise capital is pretty much one of walking into rooms full of guys in suits, many of them not having bothered to do the work of understanding what my business was about or what the opportunity was. It was frustrating at the time, but between now and then, it has made me think what a huge opportunity is going begging.  Since listing Adore, so many other founders have been coming to me and [saying], ‘I want to do what you did, but I have no idea who to go to.’ I ended up referring a couple of them to [co-founder] Justin [Ryan], who had invested in Adore and was one of the very few who did take the time to do the work and understand it.  In the end, it became obvious that there was a really big gap for proper growth equity because there’s really not a lot in the Australian private equity market. There are some small buyout funds, or there’s venture capital, but they really only focus on enterprise software. So if you’re a business with inventory, say e-commerce or consumer [products], there’s not really the right space [for you]. That’s where the opportunity for Glow became clear. IR: Are you looking to invest just in retail businesses, or are you open to other types of businesses?  KM: E-commerce and consumer [products] are the focus. Between Justin and myself, we have quite a lot of experience in that area. Me with Adore, but also the other purpose-led consumer businesses that I’ve invested in — Heaps Normal and Who Gives a Crap — and Justin with his experience leading Quadrant Growth Fund. Of course, there was Adore [that he invested in], but also Grays, Modibodi, Quad Lock, Love to Dream, and a lot of other disruptive consumer brands and e-commerce platforms. So that’s a particular strength for us, but we’ll look at anything where there is global growth potential and where technology is being used as a key disruptive element. IR: What role do you see Glow playing in the businesses you invest in?  KM: It’s really one of a partner and enabler. The founders I’ve spoken to have said, ‘I don’t just want a check, I want a partner. But I also don’t want someone coming in here and acting like they know the business better than we do and bossing us around and telling us what to do.’  It’s really that enabling role, being there as a resource and sounding board and developing strategy together, but absolutely letting the founding companies keep their own culture and continue to grow and foster amazing talent. We’re not going to be the sort of partner that sends in our own management team. When you’re talking about growth companies, they really need to continue to leverage and amplify the culture that has gotten them to where they are.  IR: Do any examples spring to mind about the role Quadrant played at Adore Beauty after investing in the business?  KM: It was the whole growth plan that we made together. There were some aspects around continuing to build out the team — we hired a CFO and a CEO together; we put a board together — and helping through the actual IPO process. I don’t think we would have dared attempt that alone, and having the right partner helped attract the best advisors, so we were able to work with UBS and Morgan Stanley for our IPO. It’s really being a magnet to attract quality partners and quality talent and leverage that experience into the business. IR: Can you tell me about the gender diversity mandate you have at Glow?  KM: That’s making sure that we have a 50-50 gender split at each level. What we can observe in a lot of other private equity firms is that when they get women into the business, they come in at the most junior levels and by the time they get up to senior decision-making roles in terms of people who are actually deciding where the money goes, women [represent] like, 3 per cent [of employees], and it hasn’t moved in the last six years. Probably bringing me into Glow probably actually moved that number, that’s how bad it is.  Our thesis is that by doing that across all the levels of our firm, the firm will make better investment decisions. And we’re certainly very hopeful that it will make us more likely to get better deal flow for diverse founders as well.  IR: Are there any specific products or sectors that you think are ripe for investment but have been overlooked, due to the gender imbalance in private equity? I know you have also invested in the breast pump startup Milkdrop… KM: I think there are a lot of women-specific markets or concerns that are not being well-valued or resourced. An obvious one is breast pumps. I know the founder has faced a lot of questions like, ‘How much of a problem is it really?’. Literally ask anybody who has used a breast pump, they’re the worst. So I think there are a lot of opportunities around babies or women’s health and those sorts of things. IR: One of the main criteria for the businesses you invest in is being values-led. Can you explain why you feel this is important and what exactly you’re looking for?  KM: If we’re thinking about future-focused companies, what we would observe is that they are placing outsize emphasis on culture, values, sustainability, authenticity — all the things that not only consumers care about, which is obviously very important if you’re in the consumer space at all, but also [the things] that employees care about.  We [believe] companies that value their culture and people are going to attract the best talent and that actually creates value. It’s taking an ESG (environmental, social and corporate governance) approach, not just as a box that you need to tick, but [rather] looking at it as a way to add value. If you can continue to improve, it continues to create future value. That’s what we are looking for.  Certainly in my investing, and in the mentoring work that I’ve done with founders, the purpose-led element is really common among the best founders. People who very deeply care about the problem that they’re trying to solve, but also care about how they go about solving it. Those are the ones that I see as being able to build sustainable competitive advantage because they will break down any wall and climb any mountain to achieve the solution that they’re trying to achieve.  IR: Do you think it’s possible for legacy companies to go back and build values into the business that weren’t there before?  KM: I think it has to be part of the DNA of the company. I think you can change branding, but it’s really hard to change values. That is a major transformational change, and you almost have to become a whole new company to do that. When I think about how values work at Adore, they’re so ingrained in the type of behaviour that we expect from people, the process of changing that would [require] becoming a whole new company. It’s hard to retrofit. For both Justin and myself, what we see in private equity, to create a properly diverse, inclusive and culture- and values-led organisation, you really have to build something from scratch because it’s too hard to change the way that things work in legacy companies. IR: What are your thoughts on the opportunity for new e-commerce businesses, and existing ones, to grow and expand? KM: I still see a huge opportunity for e-commerce. Certainly from Adore’s perspective, it feels like we’re right at the start of the next big shift. I guess what Covid has done is accelerate what was happening slowly for a while and brought much of that forward. This year-and-a-half or two years of shopping online has led to a really fundamental habit shift.  As the population continues to age and younger consumers become more and more part of the consumer landscape…if you think about any teenager you know, can you imagine them shopping in bricks-and-mortar stores by the time they’re 25 or 30? Probably not. If you look at how digitally native that generation is, the writing is on the wall. You can see that already with Korea and China. Even in the UK, online is over 40 per cent for non-grocery. I don’t think anyone’s going backwards. IR: So, between the focus on e-commerce businesses and values-led businesses, it sounds like Glow is really looking to invest in future-focused businesses? KM: Absolutely. It’s not just where customers have been, but where they are right now and where they’re going to be.