Good times are back – corporate leaders’ verdict

LEADERS in the corporate finance and wealth management sectors have given an optimistic forecast for the North West for 2015, despite uncertainty over the outcome of May’s General Election.

The pro.manchester team of panellists including Alex Hartley from KPMG, Altium’s Adrian Read, Mark Clephan from EY and Grant Thornton’s Matthew Bryden-Smith agreed there was no reason the deal values achieves in 2014 – £6.34bn – could not be exceeded.

“There is no reason to think we won’t see more activity in 2015,” said Bryden-Smith at the corporate finance lunch at the Radisson Blu Edwardian Hotel, Manchester

“2014 was (40%) up on 2013 and I would see 2015 picking up from there.

“It’s a bit difficult to tell what the effect of the election is going to be because it does not looking as though there is going to be a clear winner, so it’s a bit hard to make predictions.”

His views were echoed by Clephan but warned: “There is the fall in the price of oil and the situation in Greece. No-one is going to get carried away. Having lived through 2008, do I still have a degree of paranoia? Yes.

He argued, however, such caution was healthy. “The market is in a much better state than it has been for some time. Sensible businesses will get sold.”

Hartley said there was a continuingly good environment for business disposals.

“UK corporates are looking at how they can take their businesses into Europe and the US,” he said.

And Read added: “US businesses are also looking to come into Europe and are looking at the UK tech companies because they are growing faster.”

Meanwhile, all four agreed money for doing deals was out there and from a variety of sources, including high street banks and private equity funds.

Clephan said: “There is no problem with bank lending for deals. The multiple for the mid-market is back to where it was in 2006/7. Most of the deals we do are not really testing the boundaries although pricing is a bit more expensive. They’ve certainly got to make a living – I’m certainly not a bank basher.”

Read added: “The lending market is so active, previously those deals which were being done for £15m – £20m that’s gone down to £5m plus which means private equity funds can be competitive with the right sorts of assets.

“Money has been there for some time for good quality businesses can borrow and there are lots of routes to do that. That’s never been a constraint even for the last couple of years.”

The event at the Radisson Blu Edwardian Hotel coincided with a visit by an UBS economist, who is touring the UK regions.

Head of the Manchester office Karan Sejpal, alluding to the event earlier, said the wealth management sector usually sees what its corporate finance sector sees, six months later and was a good barometer on confidence.

“Clients I speak to in the North West are much more optimistic about the future,” he said.

“The people we have met here have been more bullish, but skill shortages in the construction and professional services sectors are tending to fuel wage inflation.”

Head of the UBS’s UK investment office Bill O’Neill, said: “The UK domestic scene is seeing a fairly robust recovery which is spreading quite emphatically. People are beginning to get a little more hopeful than they were a year ago.

“There is an awful lot more money and liquidity. There’s the sense that the south east has become very expensive and less appealing.”

“We’ve been asking people in the region and 50 to 70%t are saying things are good deal better or somewhat better.”