Roll up, roll up ladies and gentlemen for the greatest sale on earth, a once in a generation opportunity to snap up corporate assets at unrepeatable prices. If you don’t, my (imaginary) new investment firm, Car Boot Capital, will certainly do so.
It is a truth universally acknowledged that we are living through a liquidity crunch. I had lunch yesterday with the head of a leading midmarket PE firm and he confirmed that life has become tough. Banks may not have turned off the taps, but they have choked them down to a trickle, particularly for anything that looks risky. All private funds, especially VC funds, are finding life tougher and investors fewer and far less willing.
As a result, private company valuations have plummeted. Klarna, the buy now pay later group, led the way when it cut its valuation by 85 per cent last year. Many others have followed, albeit more quietly.
That leaves many promising young businesses in deep trouble. Most will be loss-making but growing fast. A few will have real promise. But if they run out of funds, they have few places left to turn. Many are likely to disappear for all their promise.
This is where Car Boot Capital could come in. A firm like that could sift through the many start ups facing imminent demise and choose to back a few through to profitability. In truth they could probably name their price. Choose carefully and Car Boot Cap could snap up some real winners for next to nothing.
Alternatively the secondary market looks particularly interesting right now – the place where cash-strapped investors offload their PE and VC investments that they can no longer hold to term – at steep discounts. I met Jeremy Coller of Coller Capital at Chelsea last month, the generally accepted emperor of this world, and he was grinning like a Cheshire Cat.
Warren Buffett said you should be greedy when others are fearful. It feels like we are getting towards one of those times.
Bounce back Britain
Well I never. After enduring doom-laden headlines from some parts of the media for months about Britain’s certain and relentless slide into recession – all the fault of the Government and Brexit you understand – the economists now seem united in the view (which some of us held all along) that Britain won’t have a recession. In fact the economy seems to be strengthening every month, and I predict more upward revisions in the autumn.
Instead the region that has slipped into recession is…the Eurozone. Cue rather more muted headlines from the same parts of the media. Cue also the opportunity for a splurge of Government tax ‘giveaways’ before next year’s elections – although don’t forget that The Chancellor will only be ‘giving’ some of what he took away last year.
Tomorrow I will be in Lisbon, to celebrate the latest expansion of H/Advisors and its tie up with the leading local communications group, Cunha Vaz & Associates. It is a good time to be there – Portugal suffered brutally in the GFC and its aftermath, but is now bouncing back strongly. The economy grew by more than 6% last year and is forecast to grow again in 2023 by more than 1% – which may not sound much but is a country mile better than recession-hit Germany.
Britain has long historic links with Portugal, who proudly say they are our longest-standing allies. That flame has been kept alive more recently by the tourist trade, and the wonderful tax incentives they offer to retirees. Low taxes and economic growth? Whatever next!
Can I quote you on that?
“We think it deserves to be a public company”
Jens Grede, CEO of Kim Kardashian’s ‘fashion label’ Skims discussing his ambitions. Let’s just wait until we see the numbers…
Forget Glastonbury and all its streaming and steaming crowds. Love Supreme is by far the best music festival in England each summer. I may be biased because it’s my local, but the setting in the grounds of Glynde Place near Lewes is ethereal, the crowd is small and lovely and chilled, and the music is frankly funkadelic. It’s a jazz festival, sort of, but also slides effortlessly into soul, disco and funk. Top of the bill this year are Grace Jones, Emeli Sande and Shalamar (Going to Make this a Night to Remember!).
Neil Bennett is global co-CEO of comms and advisory firm H/Advisors