The private equity industry is at a pivotal moment and businesses are being forced to rethink their operating models and strategic objectives, according to latest research carried out by Grant Thornton.
The audit and accountancy firm has launched a website hub at https://www.grantthornton.global/en/insights/private-equity-hub, featuring articles and content from across its network which explore how private equity firms are adapting to the new market conditions.
As global markets grapple with the impacts of COVID-19 and face an extended period of uncertainty, some businesses have concerns about their ability to raise finance to invest in growth.
However, Dennis McGurgan, Managing Director at Grant Thornton Isle of Man, believes leaders are increasingly looking to alternative finance like private equity to achieve their strategic ambitions.
He explained: ‘It is only natural that the economic turbulence caused by the global coronavirus pandemic has left many business figures finding access to finance restricted. Against this backdrop, leaders are increasingly looking at private equity finance as a funding option but some are nervous about partnering with the industry. As a local accounting firm with private equity interests that is part of an international network with multiple private equity experts, we are always on hand to offer guidance and support across the deal cycle or managing your portfolio.
‘The new Grant Thornton hub addresses many of the common myths we come across when speaking to mid-market businesses about private equity investment, looks at how private equity firms are adapting and provides advice for those looking at private equity as a route to growth.’
The research shows that, when the pandemic stormed across the globe in early spring, the sector was initially hit hard. Yet with 2021 approaching, private equity markets will have a larger role to play in funding infrastructure projects and the related supply chains due to depleted public coffers.
It goes on to suggest companies can withstand a bad year, even a COVID-year, yet remain innovative and come out in a robust competitive position to still attract investors.
‘Yes, of course businesses have had to rethink their operating models and objectives in the wake of unprecedented economic and societal challenge. Social distancing, international travel and quarantine measures have all ensured that. But the role private equity can play in supporting growth is also being reconsidered as a more interesting finance option’, Dennis added.
‘At a time when access to finance is proving critical to many, businesses in particular are looking beyond traditional sources and turning to private equity to fund their growth. Those who see the potential opportunities and respond with agility and innovation to meet them will be best placed to accelerate growth and reap the long-term rewards.
‘If companies can be sure of the strategic path private equity undoubtedly presents and have a game plan to ready themselves for that investment, they will adapt to realise where opportunities lie going forward.’