Reducing your risk We’re in the midst of one of the most extraordinary and challenging times in history. In this environ- ment, being the owner and CEO of a company you’ve built can be lonely at times and particularly challenging if all your individual/family wealth is locked-up in the business. A private equity provider can help you de-risk


your position and allow the founders/shareholders to realise some value for all their hard work, whilst also providing a source of funding for business growth and providing a broader skill set around the boardroom table. Being part of a private equity firm’s portfolio may also present opportunities to meet your peer group where new ideas, useful contacts and fresh perspectives can be drawn upon.


All in the timing PE funds are currently actively seeking investment opportunities, so it’s a good time for resilient busi- nesses that have been trading well over the last few months, and who may be looking for funding, to start the process now. Te general feeling in the market is that the landscape for seeking equity finance is starting to pick up; after a barren few months PE funds will be keen to do deals again and will still be open to paying a good price for what they regard as an attractive asset. Conversely, for businesses in specific sectors it


may pay to wait a few months to secure the right valuation. It is likely that in the immediate post COVID-19 period it will be harder to demonstrate with certainty the underlying quality of earnings


and growth trajectory, and therefore valuations may reduce. As em- ployees return to offices there are also likely to be other factors at play, which shareholders and CEOs will need to deal with. It is difficult to know how some employees will settle down – for example, those that have been furloughed could feel let down or destabilised and there is always the prospect of redundancy for some. As a result, it is difficult to predict how and when some businesses will bounce back depending on the sector they are in. For some, valuations are likely to continue to be tricky for the next six months or so and it might be wise to wait before approaching an investor.


Invest in a team to help and develop a plan If you are actively seeking PE investment it’s important to secure early input and advice from an experienced corporate finance team so that you can plan appropriately. You will get a better and more deliverable deal with professional support than by trying to go it alone. Although some shareholders will already have a trusted adviser,


most will not have been through this process before. It is important to check out the credentials and the personality fit with the adviser you choose to work with. If in doubt, most business leaders will have a good relationship with their bank or lawyer, who will understand the landscape in terms of high-quality corporate finance advisers. At an early stage, it’s important to consider how much funding you


need and why. An investor will want to see a clear plan as to where the potential growth opportunities lie and how you will deliver them. You need to think about what you might need in terms of resources such as staffing, office space or IT skills to deliver the plan. Te ability to demonstrate this succinctly and confidently as well as show passion, enthusiasm and drive will often make the difference between securing PE funding on the right terms or not.


For more help with seeking PE funding contact Mike Hughes, Corporate Finance Director at Grant Thornton. Email mike.hughes@uk.gt.com


ALL THINGS BUSINESS 89


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