It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Seb Saywood, investor at BGF in the Midlands.
There’s no doubt that the majority of businesses currently face a challenging economic environment, and growth businesses are no different. However, dynamic, well-capitalised companies are well positioned to seize opportunities and manage challenges ahead in a measured way.
That’s why the current market conditions present an opportunity for BGF, as it was created to fund promising businesses with limited access to capital.
From our perspective, momentum really picked up in the final quarter of 2023, with deal pipeline building towards a strong Q1 across a variety of different sectors.
The issue of raising capital has been a real sticking point over the last few months, with the cost of lending increasing substantially.
Unsurprisingly, the cost of lending has led to an increase in companies exploring minority equity deals. BGF’s unique balance sheet investment model means that we are well positioned to continue investing throughout the economic cycle, forming long-term partnerships with companies and supporting them over time as they grow.
While we don’t expect to see a shift in interest rates in the coming months, we do expect to see better deal flow more broadly across the Midlands in 2024. This is largely due to pent up demand, following a more subdued first three quarters of 2023, and this is likely to be a major contributor to increased activity.
What’s more, the political backdrop may also drive M&A activity in the first half of 2024. An election tends to bring a degree of uncertainty and we expect many will think hard about the sustainability of current capital gains tax rates.
