Investment Matters: Opportunities in Northern Ireland
Craig Holmes, Horwood & Holmes Corporate Finance
As the global economy continues to rebuild following the crash of 2007, individual regions continue to assess the long-term impact of the events of recent years. Northern Ireland is no different, but the region has a new sense of optimism. What is apparent on the ground is that most businesses are fed up of being fed up. Attitudes in 2011 have become ‘growth-focused’ and this is opening up opportunities.
Northern Ireland has had its fair share of property and banking woes, but as the dust starts to settle many companies are putting their head above the parapet and assessing their strategic options. However, despite the increasing confidence of entrepreneurs and business professionals, there are still missing ingredients in the local landscape. It is within this that opportunity exists.
Northern Ireland has a very under-developed private equity market with only a few local funds servicing a growing local need. The banking environment and grant culture have changed significantly and this has produced a funding gap. The lack of supply in Northern Ireland has seen GB and Republic of Ireland Funds start to assess the region’s deal flow. They appear to like what they see.
Northern Ireland is largely dominated by smaller businesses with the majority of businesses family-owned, although there is a thriving University spin-out sector. M&A and investment activity remains low in comparison with other regions, as capital and multinationals have traditionally stayed away. This however is not reflective of the number of quality businesses in Northern Ireland.
While small, the private sector has a core of robust and innovative businesses that have navigated through choppy waters over the years. Given the geography, most companies tend to be export-focused and thus have survived and succeeded on the global stage. This however hasn’t always been reciprocated in terms of global investment in the region. This has started to change and with a bedded down peace process and all the benefits of the UK macro environment, Northern Ireland now looks an interesting place to do business.