A growing appetite for private equity

One of the business buzzwords of 2019 was ‘uncertainty’ and when coupled with Brexit it was little wonder there was a sense of trepidation when it came to dealmaking.

However, despite that uncertain feeling, it seems that businesses in this part of the UK didn’t let the political landscape deter them when it came to looking for and seizing investment opportunities.

Latest figures from the Centre for Management Buyout Research (CMBOR) show that private equity deals in the North of England actually rose by 17 per cent in 2019 with 46 completed transactions, compared with 39 in 2018.

The research also showed that the North is climbing the ranks when compared to its regional counterparts, accounting for one quarter (46) of total UK deals (186) this year, after having contributed just 18 per cent in 2018.

The fact that the volume of Northern deals is making its way up towards the numbers seen in the south has to be an encouraging sign.

However, it has to be said that many PE houses are still failing to fully explore the promise that exist outside major cities such as Manchester and Leeds.

Across the whole of the North there are strong, innovative businesses looking for the support and the capital to take them to the next level. And we are not just talking about the tech sector.

They are here in all industries from manufacturing to marketing. The key is putting them together with the right investors.

PE houses have their part to play in this, they need to cast their nets wider, get out of the big cities and look at what is happening in parts of the world like Lancashire and Cumbria and see the opportunities out there.

Given the political picture is now an awful lot clearer after December’s general election and the UK is on its path towards Brexit, it will be very interesting to see if 2020 brings a surge of private equity deals in the North as the future becomes more certain.

The appetite for management buyouts has remained pretty constant throughout recent times and in 2019 the North West saw a number of high-profile deals. Again, there is no reason why 2020 should be any different.

And whatever the wider political or economic climate the basics to a successful MBO remain the same.

Having a quality management team in place, with an understanding of the key issues facing the business remain vital to attracting equity investment. Planning is also crucial.

To discuss any issues arising from this article please contact me on 01772 430000.