What’s keeping PE awake: Managing the next downturn
The real test of a management team comes when they need to quickly shift from growth to cost reduction. This day of reckoning may soon be coming. Recent market uncertainty has stalled growth in Europe and China. With these motor’s stuttering, the risk of a sharp downturn has increased. And, with full deal prices and high debt levels, the margin for error has decreased when markets turn. This is both a risk and an opportunity, depending on the portfolio company’s ability to change gears quickly.
This month’s InFocus features a Humatica column from RealDeals magazine on how to master the shift from growth to consolidation in order to win share and grow value.