onefourzero were delighted to sponsor the Real Deals Mid-Market Conference 2018, alongside our sister agency GK. On Tuesday, 30th January, we joined 300 of Europe’s top Private Equity names for a day of discussion and debate (and a magician – as seen below!)
Amongst much lively discussion of current political trends and their impact on the private equity world, two topics stood out: ESG and diversity, and the opportunities they bring.
We started the day with a panel discussion on the current political and business news, and what this could mean for Private Equity. Brexit and Trump were unsurprisingly high on the agenda, alongside the recent collapse of Carillion in the UK.
The mood was largely optimistic regarding the possible effects of recent political turbulence. GK’s strategic advisor David Laws argued that the UK were unlikely to see a ‘hard Brexit’ under Minister Theresa May, and that she was likely to remain Prime Minister for 2018, given that “no-one else wants the job.”
On the subject of UK-US relations, and the state of the so-called “special relationship” between May and Trump, the panel were equally serene. Andrew Honor, of Greenbank Communications, pointed out that while Trump’s misuse of social media could have dangerous and destabilising effects, it’s unlikely to affect the mid-market.
Theresa May, Honor argued, is unlikely to sever the special relationship due to a ‘social media maverick’. Laws pointed out that Trump is in favour of Brexit, which should make US and UK trade deals more stable and, as a result, ensure the stability of mid-market international deals.
However, the real focus of debate at the conference was over the issues of ESG and diversity. Environmental, Social and Governance (ESG) has entered the mainstream in the past 12 months, as GK’s Associate Director Martin Summers pointed out during a lively panel discussion. What was once seen as a box-ticking exercise garnered widespread support at the conference – with 88% of delegates recognising it as a key pillar of business.
When done correctly, ESG involves the systematic application of environmental, social and governance disciplines within a business. ESG goes beyond simply managing risk, and gives businesses the opportunity to outperform competitors and demonstrate market leadership. It should form a crucial element of any due diligence process.
Diversity, one of the many elements of ESG, was also a hot topic. Private Equity has historically lagged behind other industries when it comes to diversity, with women making up as few as 11% of senior positions. However, this looks set to change – with 72% of the midmarket audience saying more needs to be done to increase diversity in the sector.
Maggie Loo, of Bridges Investment Management made a strong business case for greater diversity, arguing that “by asking what business can do to address social issues, you can find investment opportunities.” Livingbridge’s Liz Jones called for private equity teams to “mirror those of the entrepreneurial businesses it invests in, and must not be just a bunch of people from the City.”
At onefourzero, we’re proud of the fact that 60% of our senior leadership team are women. We encourage flexible and remote working, measure and report on staff retention, and offer a range of other benefits that ensures our work is accessible to all.
The conference may be over, but diversity and ESG should remain front and centre for Private Equity GPs. Diversity and ESG are key to unlocking full potential, both for firms themselves, and for the portfolio companies they’re investing in.
—
For more information on ESG and digital due diligence, contact fleur@onefourzerogroup.com
