PER’s consultants are working hard to stay in touch with the market, mapping and interviewing promising professionals and keeping up the momentum with ongoing recruitment processes. It was promising to see 13 new mandates come through across the business last week and over 110 client interviews taking place, mostly over video conferencing. Both of these are a sign that firms are thinking long-term about hiring needs and that there will be plenty to do on the other side.
Some of the firms we’ve been talking to have announced deals or are starting due diligence on fresh investments, so there’s definitely life in the market and more opportunity than we saw during the first few weeks of this crisis. It’s also encouraging for private markets that we’re seeing public market investors making noises about buying again, from Warren Buffet to Anthony Bolton and many others.
Right now, many of us are using this period to address some uncompleted but important projects such as deeper business development and origination planning. At the portfolio level, management teams are getting around to tasks such as IT updates, board reviews, possible management changes and wider governance projects. The general sentiment is that using this time productively will pay dividends when the market returns to full strength.
Of course, amid all the positivity, there are some serious issues to address. Many portfolio companies are struggling and materially reworking revenue and cost projections to navigate this down period. This, of course, means funds will be focussed on operational management, including liquidity planning and cost saving and unable to prioritise new deals, let alone hiring. However, the more I reflect on what is happening, the more this feels like a timing issue rather than a fundamental market collapse.
As we enter what for many is week three of working from home, there’s very little clarity on how long it will be until we return to some semblance of normality. Europe and the US are apparently looking at least another two weeks of lockdown before the virus hits its peak and there’s uncertainty in parts of Asia where slowed infection rates have picked up due to imported transmissions. Having said that, companies are nearing the point where decisions have been made and action plans are being implemented.
What sets private markets apart is their long-term view and that perspective is going to be critical to success in an unprecedented situation such as this.