Despite uncertain global economic conditions, UK mid-market PE activity in H1 ‘22 remained high, albeit slightly down in terms of volume and value on the post-lockdown surge of 2021.
Business services and technology, media, and telecoms accounted for nearly 60% of PE investments in H1, fuelled by the ongoing trend for hybrid working and digitally enabled services.
So, the prospects of achieving an investment are good for the right businesses, but what happens after an investment? What does it mean for your business?
Private Equity is a proven driver of sustainable growth, and you will benefit from the expertise, operational, experience and proven management methodology of your PE backer.
Publicly listed companies can have thousands of shareholders, but a PE partner (often an Investment Director that sits on your Board in a Non-Exec capacity) will work with you hand-in-hand to enhance the business and effect the growth that they expect in return for their investment.
This can enhance all business functions; operations, finance, procurement, supply chain etc, as the investor leverages their expertise and contacts to effect growth. The enhanced operational capacity and rigorous standards imparted by the investor usually permeates and positively affects the business’ philosophy, leading to increased growth and success even after they exit!
Typically, a PE firm will exit between 4-7 years after their initial investment, hoping for a solid ROI.
Johnathan Massey, Head of Rowan’s ‘Leadership Dynamics’ practice and with successful periods working in both PE and Deal Advisory, said,
“PE is all about accelerating growth. There are different types of investors but they should all provide help and support to a founder or team in developing strategy, building out the team and tapping into the PE network for new business opportunities and contacts.
A key change in a primary setting is you are now answerable to someone else and the team needs to deliver what they have said they will. Be prepared to be held to account, but also be prepared for the possibility of an accelerated growth journey.”
Rowan Executive Search works with both owner-managed businesses looking to secure investment, and PE-backed SMEs.