The private equity market in particular boasts an impressive track record for supporting strong local management teams and providing the investment they need to enter new markets and create long-term growth.
There is a vast amount of capital available, due in part to a number of highly successful exits completed by vendors, but also because of the growing number of private equity houses and growth funds that are fighting for quality assets.
However, there are a lack of businesses coming to market, which could be hampering the region’s growth prospects, particularly in sectors like manufacturing that depend on innovation and investment to flourish.
Manufacturing is a core driver of economic success in the Midlands, with latest figures revealing that growth within the sector, whilst steady, has slowed.
Whilst this could be due to uncertainty around the Eurozone or concerns about potential interest rate rises, manufacturers remain bullish about future prospects, with confidence up in the industry by seven points to 51% in the last six months.
The sector, and indeed the wider Midlands business community, would benefit significantly from the investment that experienced private equity houses can provide to support plans to diversify product lines, remain internationally competitive and capitalise on emerging acquisition and growth opportunities.
Now is the ideal time for management teams to tender for private equity investment and awaken the sleeping giants in the region.
The high volume of liquidity and the substantial appetite for deals amongst private equity firms has pushed up prices and created a strong sellers’ market. Despite this, quality new assets aren’t coming to market as quickly as expected, resulting in missed opportunities for growth.
The Midlands has huge potential to deliver increased economic success, and with an influx of international firms relocating to the area, and over 18,000 businesses setting up in the city in 2014 - the most outside of London – now is the time for businesses to capitalise on this momentum and invest in their operations.
Private equity is a proven tool in helping firms realise their ambitions, and it is up to the advisors and banks like us that support private equity teams to take charge and accelerate deal origination, and find the management teams in the Midlands that would benefit from the investment that they can provide.