Manchester's Advisory Community

Just written the annual report for Pro.Manchester, the body representing Manchester's professional advisory community.

Here it is:

In 2012 Manchester-based advisors worked on a total of 274 deals, and of the 118 transactions that had a value disclosed, the total combined deal value was £5.38bn. Whereas this represents a 33% decline in the number of deals over the 2011 figures (335 deals), it does however depict an 11% increase in the value of transactions (£4.853bn in 2011). 

If we drill down to examine deal sizes, we can see that the Small Cap segment (deals with a transaction value of less than £10m) represented the bulk of all deal activity, with 70 deals. Of the transactions where the value was disclosed, this segment saw 70 deals raise a total of £236m. In the Mid-Market range (£10-100m), 39 deals raised a total of £1.17bn and the Large Cap segment, whereas nine deals managed to raise a total of £3.975m.

 

When compared with 2011, the Small Cap segment recorded negative growth of 25% in terms of volume and 15% in terms of value over the 2011 figures. The Mid Market’s volume shrank by 42% and the value by 49% since 2011. However, in the Large Cap range (£100m transaction value), whereas the volume of deals declined by 40%, the value increased by 73% over the 2011 figure.

In terms of the types of transaction, the most popular deal type of 2012 was the plain vanilla acquisition, which represented 52% of all transactions. The actual number of acquisitions, however, fell by 10% between 2011 and 2012, from165 to 148 deals. In terms of buyout activity, whereas the number of deals declined by 8%, however, the value of these transactions increased by 72% (from £734m to £2.6bn) between 2011 and 2012. Finally, perhaps as a sign of improving economic conditions, the number of transactions arising from insolvency dropped by 32%.

In terms of industry sectors that proved to be the most popular for Manchester-based advisors, the manufacturing sector continued to be the most prominent industry in terms of deals flow, with 90 deals, raising a total of £1.38bn. However, in value terms, the most prosperous sector was Wholesale, Retail and Repair, in which 66 deals saw a combined transaction value of £2.29bn. The Support Transport and Travel Agencies sector is also worthy of mention, as here 18, 18 transactions managed to accrue a total deal value of £1.17bn.

Outside the North West region, Manchester’s advisory community was most active in the USA, working on a total of 19 deals. In value terms, however, Manchester-based advisors were well represented in Wales, where some 15 deals raised £1.58bn in transaction value. Other significant regions in which Manchester advisors were able to demonstrate their expertise include Germany, where eight deals saw a total transaction value of £556m, as well as India (4 deals, £262m) and Japan (1 deal, £152m).

Investment in South East Asia

Just written an article for the ICAEW on the opportunities for PE firms looking to invest in SE Asia.

Here are my key findings:

-Today, South East Asia is a key target market for international private equity investors. According to research conducted by the Singapore Venture Capital Association, just over US$6bn was raised for deployment in South East Asia in 2012.

-Indonesia is the world’s fourth-largest economy, is rich in mineral resources, and from a private equity perspective, has a growing and affluent middle class, makes it an ideal destination for investment.

 

-Malaysia, another growing economy - and former British colony - is home to a thriving consumer electronics industry. Although, politically, its Islamic background restricts its involvement with Western firms.

-Vietnam has a growing agriculture and agricultural machinery industry, its status as a Communist nation, to some extent, inhibits trade with the US.

-China: In spite of the slow-down in the economy, China is still on course for a projected 8% in economic growth in 2013, compared with less than 1% in the UK. This, coupled with the growth of state-owned enterprises, makes China very attractive region for international private equity firms.

-For investors looking to succeed in South East Asia, there are several considerations to take into account. The region is diverse both regulatory and culturally, and yet there are gains to be made.  Funds raised in the region are expected to grow at an annual rate of 30% cent over the next three years, making it potentially one of the most lucrative markets globally.

Conclusion:
Unlike Europe or the US, South East Asia cannot be categorised as one single market place. Businesses looking to operate in the region need to ensure that they work with the right people, and that means spending time researching the market. Investing the time in research means minimising the risk.