There is no doubt that there has been turbulence in the financial markets and in the confidence in the economy during previous years. The tightening of credit, fiscal austerity and unprecedented political changes have all left their mark on future predictions. However, there is light at the end of the tunnel; private equity.
The recession can be viewed here as an opportunity. The financial markets can profit from private equity. If banks can start lending substantially, once more, then the private equity sector has the potential to grow rapidly which, in turn, will drive key economic indicators.
Moreover, the recession could indeed be the catalyst for sector growth and opportunity. The recession has highlighted key areas of weakness both internal and external to firms which need to be changed – capital and expertise investment via private equity can facilitate this change and lead to excellent prospects. Further improvements in efficiency, especially when competing in a global market, can only benefit the economy as a whole.
Politically the time is right for private equity. A shift to the right with a greater emphasis on localism, business and entrepreneurism further presents opportunities for investment. Combine this with a move away from short-termism towards a long-term progression has settled the business environment. Private equity investment in high growth sectors, such as renewable energy technology, can benefit from rapid growth which will boost employment. The government has pledged its support through vehicles such as the Green Investment Bank which could facilitate the UK in becoming a world leader in key future sectors.
Overall, the political and economic situation is perfect for a thriving private equity investment sector. It has the potential to foster rapid and sustainable growth which have large benefits for investors as well as the economy. Given the current climate the UK economy is desperate to champion a flagship sector; private equity has the expertise and opportunity to become this.