External market conditions also need to be taken into account. While the first quarter of the year as been busy, two factors are complicating the picture. Firstly, there is some nervousness about investing in software and other tech-based businesses in case what they do could be undermined or replaced by AI. This led to fears of over-valuations in the US where tech stocks plummeted as a result. There has been a ripple effect and the market in the UK remains cautious.
Secondly, the war in the Middle East has inevitably undermined general confidence, with fears of rising energy prices and inflation as well as supply chain knock-on effects. Depending on how protracted the conflict is, it could create something of a drag on deal and investment activity.
Nevertheless, the fundamentals are there – willing investors with considerable capital to deploy, looking for quality assets with ambition and drive.
The next step on your journey?
As the leader of a private enterprise business, are you and your management team alive to the potential of private equity investment? It could be the catalyst you need to reach that next milestone in your strategic plan.
Bear in mind also that, unlike traditional debt, private equity investment can bring much more than just cash on the balance sheet. Most private equity investors want to be a partner with you in growing the business. They have a depth of expertise across different sectors. They may be able to bring valuable insights into international expansion or the deployment of AI, for example. Given that they will most likely want to exit their investment on a 4-5 year time horizon, they can also work with you on your own succession or exit planning – something that, all too often, founders and leaders simply don’t have the time to properly consider.
If you’re looking to secure investment into your business, do get in touch. At KPMG, we have extensive links into private equity as well as other funding sources. We would be delighted to discuss how financing could become the game changer for you.