Is the market changing for good?
2014 has been an interesting year in the Private Equity market for a number of reasons, and as a result it’s been Interim Partners most successful year to date. It certainly hasn’t been a vintage year from the amount of investments that have happened. The changes made to the portfolio businesses acquired in the vintage years that still sit on the books of my clients are what made the difference in 2014.
As we all know, the market started briskly this year with the promise of a strong IPO market and renewed optimism across the board. This seemed to fizzle out toward the end of Q1, and it certainly wasn’t going to be the type of event that was going to have the biggest impact on the Interim management market. Here is what did happen: the owners of the businesses who were targeting IPO, but failed to launch looked at changes that needed to be made ahead of another exit attempt over the coming year or so. We saw signs of this across industrial and financial services companies, and will continue to be involved into 2015.
We’ve certainly had a marked rise in requests for specialist knowledge for due diligence projects with a view to the interims taking positions in the acquired companies. Our strength in depth across all the sectors is starting to gain momentum for us here; so if this is your thing, then do get in touch with us. I expect to see more of this activity in the New Year.
The theme around risk has continued through the year with Private Equity houses wanting more and more individuals who not only have market sector relevance, but who have a history within Private equity portfolio businesses. It’s my opinion that this need will only increase as houses look to mitigate risk within their investments.
So to my point, there is going to be a lot of change and consolidation in the market with a whole host of houses in a work out phase. Many smaller funds are originating from the reputations of a select group and a greater reliance on Interim management as the concept within Private Equity continues to mature. It’s going to be our most exciting year, but is the market changing for good? Not forever, but for the better?
If you work in the Private Equity arena, investment or portfolio side, then I’d be keen to talk to you and get you closer to our team at IP for what’s going to be a great year ahead. I’d be interested to hear your predictions for the year ahead as well as your summary of 2014.