Long Read: Employee Ownership Trusts

In this week’s Long Read we invite Liberty Leasing, winners of the Leasing World Editor’s Choice Award 2024, to explain why Employee Ownership Trusts might be the way forward for the asset finance sector.

Introduced by the Government in 2014, employee ownership trusts (“EOTs”) have been steadily gaining in popularity, with the number of UK companies moving to employee ownership rapidly increasing over the last couple of years.  

As far as the asset finance sector is concerned, however, this exit strategy remained relatively unheard of until Liberty Leasing’s announcement in 2024.  We talk to Laura Roberts, legal director, to find out how it all came about and how it’s going. 

Firstly, can you explain what an employee ownership trust is?

An EOT is a structure where employees have an indirect controlling stake in the shares of their employing company, via a trust formed specifically for that purpose.  

Why did Liberty Leasing choose this path?

Our two founders – Tony Captain and Greg Randall - wanted to take their well-deserved retirement and we looked at a number of ways that they could exit the business.  After much deliberation, it was clear that an EOT would protect both their legacy and safeguard the business and our colleagues from the uncertainties associated with a third-party acquisition.  Everyone that works at Liberty Leasing is now a business owner - not an employee – which allows us all to contribute to decisions about the years ahead.  

We've worked hard over the years to create a successful company with a unique culture, built on a passion for our customers and an exceptional team. Ultimately, the EOT reflects the values, ensuring that everyone works together as a team and really drives, delivers and shares in the current and future success of the business. 

What are the benefits – both for the business and Liberty Leasing’s employees?

We have total control over what we do. We can also attract and retain the best people as they know they all get a say in how the business is run.  This then leads to better staff engagement and increased productivity. 

How does it work in terms of reporting to the EOT?

Liberty Leasing is still run by our senior leadership team - Allan Clegg, managing director, Paul Sheedy, commercial director, Alan Cooper, finance director, and me.  We oversee the day-to-day operations and liaise with the trust board (which includes Tony and Robert Harris) where necessary.   

What is your advice to other organisations in this industry thinking about doing something similar?

It’s definitely something worth considering both as a succession plan and as a means to motivate and incentivise employees to generate further value for the company.  It’s absolutely the right choice for us, and with the next generation of leaders rising through the company, the future looks very bright.  We’ve been asked by other funders how an EOT scheme works, so this might well be the way forward for the industry.

-- This is an edited version of the feature first published in issue 199 of Leasing World magazine.

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