Real Deals: Covid-19 corner: “GPs and portfolio companies are being tested, some will come through this better than others” - ESO Capital


Simon Thompson

19th March 2020


Steve Edwards, partner at ESO Capital’s perspective on Covid-19’s effects on the PE market.

How is COVID-19 impacting your firm?

The main impact has been on our staff, our working practices, and our focus on supporting our management teams in our portfolio companies.

Clearly, all transaction processes are being put on hold right now by advisers, although for ESO, the virus emerges after a busy few months in completing new transactions.

What measures has your firm put in place?

We moved to a dispersed operating model over a week ago, before Government advice officially recommended it.
All staff are set up to work from home, and so far, this has been working well.

How have your communications with GPs/LPS/advisors been affected?

Clearly there have been no physical meetings, with all contacts by phone and/or email.

This works well enough in the short term, but it is much harder to build new relationships this way.

This will become more of an issue the longer we maintain social distancing.

How are you managing portfolio companies?

Not surprisingly, this has been our main focus in the short term.

We are supporting management teams and especially CEOs in making the right decisions quickly, and of course our support clearly includes funding as needed.

This is where experience is valuable. At ESO, we have seen many economic cycles play out, and whilst all of them have their differences, you learn some valuable lessons each time.

We have always had a dedicated in-house portfolio and asset management team, and this skillset is critical in these times.

We have at least daily calls with each of our companies across our business to ensure a co-ordinated, pro-active and informed approach to putting our companies in the best possible position to weather these challenges.

How will the virus impact the PE landscape across Europe?  

At this stage, I think it is dangerous to make too many predictions. The landscape is changing daily right now. Portfolio companies and GPs are being tested, some will come through this better than others.

 

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