The time may be now to bring deals forward
A packed room at TheBusinessDesk.com’s Rainmakers seminar in Leeds, supported by Squire Patton Boggs and Grant Thornton, heard from an expert panel reflecting on the deals market in 2023 and looking forward to what the year ahead might have in store, discussing funding and investment trends, and analysing the impact of technology.
After a slow 2023, there is optimism that 2024 could be a much better year for the corporate finance market.
With a US presidential election happening in November and a UK general election expected around the same time, there may be significant policy changes ahead.
But corporate finance professionals are hopeful this year can have relatively good conditions for dealmaking, despite wider economic conditions remaining sluggish.
Paul Mann, head of UK private equity at Squire Patton Boggs, said: “There’s a still a gap in pricing expectation, but I think it has closed. If you have an asset, this time last year would you have brought it to market? The natural answer would have been no.
“I’m not saying it’s a yes now, but I suspect the argument is a lot more towards the middle and towards ‘this is the time’. The larger investors put the money back in, and that’s what makes us all busy, because when the circle goes through the system we’re all doing things.”
Andy Lees, managing partner for new business at Palatine, said: “12 months ago there was a lot of uncertainty about where interest rates were going and where the economy was going.
“It might not be spectacular in terms of short-term prospects, but I do feel it’s a bit more predictable.
“As a buyer or seller, if you’ve got that predictability you know what you’re working with. Hopefully that will lead to a bit more activity.”
Dan Rosinke, national head of transaction advisory at Grant Thornton, called on the audience to “not forget we did some cracking deals last year in this region” and is optimistic there can be more to follow.
“Realistically, most people say the economy will be flat,” he said. “I’m thinking the deals market will be different.
“Flat, stable consistency – as Andy mentioned – investors like that.
“There is definitely pent-up demand. There is pent-up supply in the deals market as well.”
Endless director Adam Keasey highlighted “management fatigue” as a key factor that could boost supply.
He said: “Management teams in place for a decade have been through every crisis we can think of. If it gets to a point of predictability that actually looks reasonably calm for the next 12 months, they may say ‘let’s just go for that exit, I can’t face another 12-24 months of crisis’.
“Some of our longer-term investments are saying the exact timing might not be perfect, but at least they feel that they can deliver, whereas in two years they might not have the energy to do it.”
Mel Hird, founder and director of Fresh Thinking Capital, finds most management teams are resilient and focused on the things they can affect.
She said: “You become resilient because you have to. You’re in a marketplace where the only way to get through difficult times is to continue to trade.
“A lot of business owners now think, well, we’ve had Covid, we’ve had Brexit, we’ve got Ukraine and a major Middle East crisis going on. Let’s just focus on the little bit we can do and, as a jigsaw, it can all piece together.
“Push yourself through this and you will make a success.”
Join us for the Rainmakers Conference 2024 in Manchester on 20 March, which will bring together funders, entrepreneurs, and business leaders to focus on opportunities and challenges of building a dynamic and competitive economy in the North. Find out more and book your tickets at www.rainmakersconference.co.uk.
