The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Friday, 18 March 2016

Member Blog: What does 2016 have in store for private equity?

By Syd Hussain, PwC's North West private equity leader
2015 was a great year for private equity, with a number of high profile exits and investments across the region. Exit activity in particular, was strong, driven by an active IPO market, good overseas investor appetite and plenty of private equity dry powder to put to work. We saw some headline grabbing floats such as Auto Trader and On The Beach here in the North West.

From an investment perspective, the market remains highly competitive, with demand for quality assets outstripping supply, contributing to high investment multiples. Arguably, TDR’s investment in Euro Garages was the stand-out transaction in 2015. So what does 2016 have in store for private equity?

Given the present political, economic and market uncertainty, predictions are challenging - I doubt many of us saw oil prices falling to $30 barrel 12 months ago. Despite this, 2016 has started promisingly with a number of hotly contested processes; the supply of private equity capital remains strong reflecting both new entrants and excellent fund raising by a number of our regional private equity houses.

Moreover, we are also seeing alternative finance providers establishing themselves in the North West, together with London based debt funds, increasing their focus on our region as they look to support midmarket businesses. There remains a very strong appetite to do deals and overall I remain positive about UK and North West growth.

Undoubtedly, it may continue to feel like a seller’s market, which could make private equity more cautious on the prices being sought and the processes being run.

In addition, the private equity landscape is changing, regulatory pressure, calls for further transparency, and increased competition means that private equity funds may cast their net wider to find untapped sources of value; increased emphasis on deal origination may be required to find those offmarket gems.

The North West is home to a number of leading private equity houses, which should be celebrated. That’s why we are including private equity supported companies in this year’s UK Private Business Awards.

Private businesses are the foundation of the British economy, and indeed the North West has a great reputation for entrepreneurship, and these awards give them the opportunity to share their successes and gain recognition for their innovative work on a national stage, and pitch themselves rightly alongside some of the UK’s leading brands.

PwC has an established Private Equity Group that brings together a multi-disciplinary team dedicated to serving private equity and their portfolio companies. The Group has a proven track including recently supporting transactions involving Euro Garages, Travel Counsellors, Mobica, Sambro and On the Beach. Our advice covers fund structuring, through to deal origination, deal execution and post deal services.

We work with our private equity clients to help them to refinance and exit from their investments. Our taxation advice fund inception and ongoing compliance includes tax due diligence, structuring and exit planning.

PwC is uniquely placed to provide a partnership across the private equity lifecycle.

For more information about how our team of specialists can help you, or details on the Private Business Awards, please contact me on syedul.hussain@uk.pwc.com /0771 406 4876.

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