Flexibility in uncertain times
Private equity backed company survey 2013

"74% of portfolio companies said their PE backers were willing to invest further capital into their businesses"

Source: PwC

"Nearly three quarters of respondents feel they are either quite or very ready for an exit if an offer came up now"

Source: PwC

"Trade sales remain the most likely exit route, with less than a fifth favouring an IPO"

Source: PwC

"Private equity firms are more prepared to take measured risks and to support UK companies investing in growth"

Source: PwC

"90% of our survey respondents expect to maintain or increase their permanent staffing levels in the coming year"

Source: PwC

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Our analysis is based on in-depth face-to-face interviews with private equity backed companies across a wide range of industry sectors. For the fourth year running we have increased our survey sample size to allow us to gain further insights into the trends shaping private equity portfolio companies.

Key findings:

  • Flexibility is critical to success in the ‘new normal’
  • There is room for improvement in risk management and management information
  • Innovation is critical to value generation and the realisation of a growth strategy
  • Financing and working capital management is a key focus for Private equity (PE) backed businesses
  • There is some improvement in the exit environment
  • Environmental, social and governance (ESG) issues continue to grow in importance

The economic backdrop companies face is a ‘new normal’ of relatively slower growth and greater uncertainty than in the past.

It is encouraging that as well as being flexible on strategic direction, portfolio companies view their private equity owners as more willing than lenders to invest further capital to achieve growth.

In this challenging environment the most successful companies will be those that can adapt flexibly and quickly in their pursuit of growth opportunities. Reflecting this, our survey shows that private equity backed companies are focused on the need to introduce new products or widen their service offering as the most important driver of value in their businesses.

There are areas where portfolio companies could improve their operational performance. Specifically, there is further room for improvement in risk management and opportunities remain in working capital & cash flow management.

Overall our survey results show that private equity backed companies display the dynamism needed to be competitive in the 'new normal'.