Jonathan Simnett, technology dealmaker and marketer at Hampleton Partners, discusses how Covid-19 will test the resilience of businesses and the credibility of PE firms.

How has COVID-19 and the associated lockdown impacted investment in companies and your clients? 

No significant negative impact so far as the clients are predominantly in the B2B space where investment cycles are longer. There has been some positive impact in segments such as ecommerce, healthtech and fintech where Coronavirus is actively encouraging investment.

How will the virus impact the PE landscape across Europe? 

It will cause a thorough re-examination of all existing investments and the questioning of real value in the economy and examination of the resilience and purpose of businesses in which they are invested. Of course, in such crisis real leaders emerge in both investors and those invested in.

Deals can take months to procure and then finalise, how has the COVID-19 impacted your pipeline?

It’s in the nature of technology M&A that deals are done for strategic purposes and long-term aims. So the research and planning associated with such deals is still going on and so we still continue to be approached by companies that are fundamental to the paradigm shifts that are taking place across industry such as the electrification of transport or the disruption of financial services.

Has COVID-19 changed the status of any deals you had arranged?

None so far.

What options does a company in need of investment have in the current climate?

My advice would be to speak to existing equity partners and banks to rapidly establish what help there might be in terms of additional funding or course correcting the business.

Pull in as much expertise as possible from those who have already had experience in managing businesses through recessions and financial crises and engage closely with customers to ensure existing contracts remain in place.

Take advantage of Government wage support to keep your team together and manage runway constantly. Post coronavirus, target companies will be sensitive to firms seen ‘not to do the right thing’ in the investment environment. PE firms need to be thinking carefully about reputation management and acting with real integrity.