The difference between a passive investor and an active administrator is the difference between dead capital and living capital. We describe how active management works in a middle-market portfolio company.
There is a legitimate criticism that Spanish entrepreneurs frequently make of investors: “They come in, put in the money, sit on the board, and do nothing until they want to sell.” It is a caricature, but it contains more than a grain of truth.
At Blue Mountain, our philosophy is radically different. We are active investors. This does not mean we interfere in daily management — that is the management team’s responsibility. It means we contribute real value beyond capital, and our involvement is measured in concrete results.
When we enter a company, the first month is for listening. We sit with each member of the management team. We visit the facilities. We speak with key clients. We review operational processes. We analyse information systems. We arrive not with a preconceived plan, but with questions.
This first month is crucial because it establishes trust with the team. Employees who perceive that the new partner has come to impose without understanding will resist fiercely. Those who perceive the partner has come to listen and improve will collaborate willingly.
From that first month, we define the “value plan”: a document identifying the most relevant improvement levers and establishing an implementation calendar.
The most frequent levers in the Spanish middle market are: management control (implementing basic dashboards and KPIs), management team strengthening (filling gaps — typically a professional CFO or a strategic commercial director), commercial professionalisation (CRM, client segmentation, sales activity measurement), and operational efficiency (eliminating redundancies, fixing bottlenecks, optimising inventory).
One of the most important changes we implement is establishing a functional board of directors — not a pro-forma body that meets once a year, but one that meets monthly, reviews operational and financial KPIs, debates strategy, and makes decisions.
A good board provides three things: discipline (monthly reporting forces the team to measure and explain), perspective (external directors bring experience from other sectors and markets), and counterbalance (in a company where one person made all decisions, the board introduces healthy contrast).
The active administrator does not manage the day-to-day. That is the general manager’s responsibility. The active administrator defines the strategic framework, approves annual budgets and monitors execution, participates in strategic decisions, provides their network to open commercial doors, and acts as a sounding board during uncertainty.
This distinction between governance and management is fundamental. The administrator who tries to manage from the boardroom generates friction. The administrator who governs with judgement and lets the team manage generates trust and results.
In our portfolio, companies where we have implemented operational improvement programmes have experienced, on average, a 35-50% EBITDA increase in the first three years. Revenue growth has ranged from 15% to 40%. These are not results of financial engineering — they are results of management: better control, better teams, better commercialisation, better efficiency. Real value created in real companies.
The difference between capital and intelligent capital is the ability to contribute what I call “smart capital”: money plus operational experience, plus networks, plus management discipline, plus patience to implement changes that need time.
Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
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