Private Equity: The end of a Golden Age?

Whatever your views, Brexit uncertainty continues to raise questions for the PE and VC Community. These range from passporting arrangements for fund marketing, through to the potential disruption of ongoing fundraising, and the management of existing portfolios.

Whatever the outcome, the UK Market is still providing good opportunities. According to the Centre for Entrepreneurs, the UK registered more than 663,000 new businesses in 2018, many of which will be looking to the VC industry for funding at some point. Equally, a number of privately owned established businesses will look for strategic investment at some stage in their lifetime.

A key component in all activity however is people.

Norman Broadbent Group has been supporting investors and their portfolio companies in a number of different ways. Increasingly, this means helping to identify and engage with Interim Executives at pre-deal stage, who are able to bring detailed sector knowledge and insight during due diligence. Often retained for a defined (and short) period of time, with clearly defined deliverables, our research has shown that:

 

  • 39% of Interims were extended post-deal to support management and provide an additional useful link between the investors and the business. Post-deal, (and usually mid-cycle), Interims have been used to replace and/or supplement management teams for a variety of different reasons

 

  • 86% of PE firms who hired an Interim, appointed at a time of change (including gap management) where speed to hire was critical

 

  • 76% of all assignments required an Interim who had previously worked with Private Equity investors

 

  • In the main, Interims were engaged to fulfill the roles of CFO and CTO. However, in 2018, our research shows a 37% increase in demand for Interim CEOs as well

 

  • Whilst most demand was for the UK, we are forecasting greater international need. Q4 of 2018 saw an increase in global portfolio roles especially in Finance and Operations.

 

  • In terms of specific sectors, there was a noticeable uptick in and around Health. This has been driven by the trend for healthy eating, as well as technology enablers related to sport and well-being. Whether driven by Millennials, or a shift in public opinion, this sector seems to be growing. These types of companies have already seen success in 2018, with investments including vegan meal delivery business, AllPlants‘ £7.5 million funding investment from Octopus Ventures. We have has also seen growth in all things ‘green’, namely renewables, recycling, and green energy.

Technology has played a significant part of our Interim work undertaken in 2018 and anticipated for 2019. The demise of the high street, and the growth of online shopping, has created demand for technology to deliver the very best experience, the very best product, at the very best price (and quickly). End-to-end solutions have demanded both experienced Technologists with ideas to create innovative platforms, and agile fulfillment and logistics to deliver a positive customer experience.

It may be that 2012-2018 will be viewed by some as the PE ‘Golden Age’ due to exceptionally generous economic conditions. However, with 40 years experience of providing people solutions into the ever changing world of PE, we’re sure there is both excitement and challenge ahead!

If you would like to find out more about how we can help you, or discuss a specific assignment, please do not hesitate to contact Kristian Lee, Director, +44 (0)  20 7484 0119 or via kristian.lee@normanbroadbentinterim.com for an initial confidential discussion