Episode Transcript
[00:00:02] Speaker A: Welcome to the Dealmaker Uncut podcast where we speak to some of the UK's most exciting entrepreneurs and hear their investment journeys. We'll discuss the challenges, successes and lessons they've learned along the way with expert deals commentary from Jonathan Boyers, head of Alvarez and Marcel Corporate Finance, and me, Chris McGuire, executive editor at Business Cloud.
Welcome everyone to the latest episode of the Dealmaker Uncut podcast, powered by Alvarez and Marcel. My name is Chris Maguire and I'm the Executive Editor of Business Cloud. As always, I'm joined by the multiple award winning dealmaker himself, Jonathan Boyers. Jonathan's been involved in deals totaling billions of pounds during his long and illustrious career and he's a Managing director and head of Alvarez and Marcel's corporate finance practice in the uk. Hello, Jonathan.
[00:00:50] Speaker B: Hi, Chris. Looking forward to today's session?
[00:00:52] Speaker A: Yep. This is the podcast that gets you inside the deal. In the first part of today's show, we're going to be interviewing our special guest. After that we'll then have a short break and in part two, Jonathan will lean on his 35 plus years of experience of working in corporate finance to answer listener questions. So, Jonathan, who are we speaking to today?
[00:01:10] Speaker B: Well, today, Chris, we'll be speaking to Mia Drennan. So Mia's hopes of being a fighter pilot were dashed when she was younger, but as you would say, Chris, she's been flying high ever since earlier this year, Glass, the London fintech business that she co founded in 2011 with 6,000 pounds secured investment from Oakley Capital and La Casse in a deal understood to have been valued in excess of a billion pounds. So welcome Mia.
[00:01:44] Speaker A: Hi, Mia. I'm going to kick off with a couple of questions, but I'm just going to start. We're filming this and recording this episode in Alvarez and Marcel's offices in London in Finsbury Circle. And you pointed out that your first glass office was just across the road, wasn't it?
[00:01:57] Speaker C: Yes, absolutely. Finsbury Circus in a basement. And yeah, it was. While we're sitting there trying to build a business, it was very cheap in rent, but there was building the Lizzy line and there was like a thump all the time, all day long, making vibrations as we were trying to get our build our business.
[00:02:15] Speaker A: You've just moved into a new plush office, probably a lot more expensive than that one.
[00:02:19] Speaker C: Yeah, absolutely.
[00:02:20] Speaker A: But that just sort of shows the journey that you've had in the last 15 years. I'm going to take you back a bit, actually. Jonathan touched on it in his intro, but as a teenager, you Joined the air cadets and dreamt of being a fighter pilot. So why didn't you?
[00:02:32] Speaker C: Well, at that moment in time, girls weren't allowed to fly.
And so, you know, it was. It was some time after that that they changed the rules.
So, you know, that was all I wanted to do. I had started to learn to fly as an air cadet and loved it, but if I wasn't able to go the full way, I wasn't interested. So I quit.
[00:02:53] Speaker A: When you raise the investment, there are all sorts of headlines about breaking glass ceilings in reference to the name of the business and everything else as well.
But I think I'm right in saying, and I think Jonathan will correct me if I'm wrong, I don't think we've ever had a holiday rep on the Dealmaker Uncut podcast, because I understand after studying art at college, you found yourself as a holiday rep in Corfu, you before the direction of your life changed. Is that true?
[00:03:18] Speaker C: Yeah, there was a little bit in between that. So I went to art college because that was my second passion, and started doing a course in graphic design. And when I left the college, I got a couple of jobs, but I wasn't really kind of going anywhere. And so my mum said to me, get on the train to Liverpool street, take your CV and go around the temping agencies. And that was really the one of the changes that basically I ended up at the Royal Exchange at Life and I did that for about six months and then spent the next few years temping around the city in various different places and then took the chance to become a holiday rep for just over six months in Corfu.
[00:03:59] Speaker B: Your first break came in 1992, when you started working in the capital markets team at kpmg, which you must have been there when I was there. You must have been there at the same time.
So you then worked at a few other businesses before, in 2005, you set up Square Mile Connections, so that was a financial services recruitment business.
Maybe you could just talk a bit about what you were trying to do when you set that up.
[00:04:28] Speaker C: Yes. So it's probably best to learn the backstory to that, because it was kind of, again, a bit left field. So. So prior to setting up that business, I'd effectively come into my career now, which is corporate agency and trust, and I started to build the bank of New York's agency and trust business in Europe from 2000 and I'd built this big team and we were focusing on all those securitizations and collateralized debt. Obligations that broke the world, right? Had a brilliant career and I was promised a promotion in 2005, which at that time was a big deal, a big job.
And at the 11th hour, an American candidate was flown over and the job no longer existed.
And so that was basically the moment I thought a rude word and decided to look for another opportunity. And as a result of that, a client was a US Trust firm, very niche firm, were looking to set up a trustee only advisory practice in London. I knew the partners and they asked me if I'd like to help them and I said to them, I'm not going to set it up in your name as law firm. I'm going to set up Square Mile connections because I know everybody in the city and I'll make the connections to, you know, getting them to help build your business.
So that was kind of a. There's been a theme for me out hustling, knocking on doors, trying to get people to buy something.
And as it resulted, as I was going around at the end of 2005, early 2006, all of my trusty friends in the market and people were saying, mia, look we're really busy doing all these deals, can you help me find people?
So I started doing side hustling of headhunting on the side and then that law firm, the people left and I pivoted to become a full time headhunter in corporate agency and trust.
And that took me on that journey to, to eventually get to Glass in 2011.
[00:06:24] Speaker B: But you'd already got yourself a good network in that sector. So I remember about that time I sold a business called SPV Management to Wilmington Trust.
[00:06:34] Speaker C: Oh yeah, I know.
[00:06:35] Speaker B: You know that business which was. Yeah, I sold that when I was working down in London. And one of the things, the features of the market at the time there was, there was so many PFI projects that involved securitizations and that was a really booming bit of the market. It's not there in the same way anymore, but it was a really booming bit of the market. So I can sort of imagine there was loads of activity at the time.
So you, in 2011, I think you finished up with the recruitment and moved full time into Glass. Could you just talk a bit about Glass and give us a flavour what you're doing there?
[00:07:13] Speaker C: Yeah, sure. So, I mean, again, the origination for Glass was the first fact that at the end of, you know, the head hunting business, I was getting a bit restless and I decided I'd done with it all. It's not a great business I wasn't very motivated with it and I actually at the success I had eight people. So you know, putting that I hadn't found my passion and I was seeing these amazing jobs coming through from the likes of Wilmington and other because they were my clients, other trust banks and so on. And I thought I really want to do this job but I can't go back to working for anyone else.
And separately a lot of my previous clients who'd been investment banks on prop desks had now moved into these kind of special situations, credit funds and what have you and were looking to buy these broken leveraged loans and try to get their money back.
So you know, there was a real opportunity and it was sort of an emerging as a sort of restructuring activity was happening.
And what I gleaned was that actually the commercial banks like The Barclays, the RBS, HSBC, etc. Were not really set up to help be proactive and commercial to help this administrative facility agent and security agent business.
So that was my idea. I wanted to set up my own agency and trust business to compete with the bank of New York.
And I didn't know how to do it. And that broken leverage loan market gave me really the idea.
My business partner at the time, he was a lawyer and he had come out of securitization, was looking for a new job. So I said to him, do you want to help me? And that's really how we started.
So today, I mean Glass has grown from a business that was focused on complex and restructuring activity to servicing all sorts of administrative, institutional debt, performing non performing bonds, loans, equity, the lot on a global basis.
[00:09:07] Speaker B: Yeah. And the debt market over the period you've been doing that will have changed quite significantly. You were filling up, sounds like you were filling a gap in the market that was needed, where the lenders needed that support.
But you effectively created a market, haven't you over that time?
[00:09:25] Speaker C: Absolutely. It's only the other day that I actually stopped to look back and go there really wasn't anything doing this. We were, we created a new company service that didn't exist.
And so yeah, I mean it was, I wanted to kind of obviously get back into doing bonds. That was kind of my aim. But obviously doing those deals that nobody else wanted to do really allowed us then to showcase how well we did the difficult stuff. At the same moment the private credit industry was starting to emerge. So you know, in the UK direct lending, they didn't want to use a bank agent, they wanted to use an independent who was really going to give Them a high touch service. And that sort of went from there, really, and allowed us to sort of strategically pivot around the debt markets until eventually we get into the bond world.
[00:10:14] Speaker A: It's a fascinating story. I've written down three words, well, four actually, but three descriptions of you based on what I think, what I've heard so far. Just in terms of your career story to this day, how would you describe yourself?
And I'll see you tally up with mine.
[00:10:30] Speaker C: No, I am incredibly driven and I've
[00:10:34] Speaker A: written determined, so I think that's, that's a tick.
[00:10:36] Speaker C: We'll kind of go down that, you know, I don't know what the word is. So resilient, you know, and, you know.
Yeah, I don't give up easy.
[00:10:47] Speaker A: I've said visionary because you are. You identified an opportunity. I also stuck in there. No messing. Because I get the impression once you've got an idea, there's no messing, there's no stopping you. What I think is fascinating about your story is people see like the investment and they see the scale of the business, etc. What they lose sight of is the fact that when you started glass, you had 400 meetings across the city spread over four months before you secured your first deal. So how did you keep yourself going during those four months?
[00:11:14] Speaker C: I mean, it was one of those things where it almost became not a game. That's the wrong word. But, you know, they get so many no's, you know, And I've also been out of the market for seven years, so whilst I had a network, I had to get back into that network again. And the lawyers always liked to meet up, find out what's going on.
So a lot of those meetings were with law firms and people that I knew in that space.
But we had lots of green shoots within the 400 meetings. And one of them actually came probably a month in from a very large investment bank that said they wanted us to step in and replace the agent on Aircom, remember the Irish telecom?
So we were like, no, we can't. I mean, it was a huge syndicated loan and we were like, look, we can't do that.
So we knew that we were going to get there in the end. And then the second green shoot came when Goldman Sachs said to us, we really like your idea, we think you've got a great business, we think we would love to support you, we'd like to play you into the F1 debt. And I'm a massive petrol head. That's another conversation.
So we were like, but we want to send the man from the agency team round to look at your processes and procedures and your system.
So you've never seen people run so quickly back to the office over the road, start getting all the processes and procedures in place. Because we didn't really have that. We were sort of marketing and selling ahead of actually having a proper thing to do something on. I don't think that sort of focused our minds. But the man from the agency team never came round.
But we did get a deal, not from. Not. Not till later from Goldman, but that we were set up properly when the first transaction came in.
[00:12:55] Speaker A: And a lot's happened since then. So I was looking at the stats, right, you manage assets, $850 billion. You're in 11 countries, 15 cities. With the addition of Roman and Milan recently, four continents, you've exceeded 100 million in ARR. You've got 500 staff and you've done four acquisitions.
So what. What do you put that down to?
[00:13:17] Speaker C: Well, do you know what the one thing about it is? It's culture.
So I think the biggest success of the business, getting to where it is, is the culture that's been created and that people live in the business.
So the DNA initially, when we first started was, you're only as good as your last deal because the market's very fickle.
And even now, when I do inductions, I still tell them the journey and the story and I still talk about that. But also celebrating, right, because when we got the first transaction, we went, oh, my God, someone's given us the transaction and let's celebrate. You know, they've trusted us to do this and that's kind of the mentality that we've bred amongst our people.
But also it's. It started off as a family, you know. You know, we're very much a family of people around the world. We operate on one platform.
There's collaboration, communication, cooperation amongst all the office. I'm a big proponent of that. Again, goes back to culture and maintaining, even at this size, the entrepreneurial culture of disruption, rethinking, reimagining, reinvention. And I think people really like to be part of that.
[00:14:32] Speaker B: I always say to our people that anybody can show leadership and innovation at any part of the business.
People can step up. And it sounds like that's your sort of culture.
So your first engagement with private equity was with Levine Lightman In 2022, when I think you were turning over 45 million, something like that, and making about 5 million of EBITDA. So it was a proper, strong business at the time.
And that allowed you de risk and get a new partner on board. I'd love to hear what you were thinking when you were entering into that transaction and what were the drivers towards it and why choose them?
[00:15:19] Speaker C: Sure. So 2020 came, obviously, Covid. And I remember there's a few, like, nuggets of things that happened. So I'll just share with you, if I may. So I was.
I was flying. There was talks about COVID so it was coming east to west. I actually flew to New York on a Virgin Atlantic plane. And there was like, hardly anybody on the plane. And the air hostess said to me, people keep nicking our toilet rolls. And I said, what are you talking about? And they said, well, because of this Covid thing, you can't buy toilet rolls.
So I was like, okay. So I would have landed in New York. I could just go buy those toilets. Don't mess with my husband. Because I was worried. Anyway, Covid was coming, but I said to my TCTC team, my coo, I said, look, we need to make sure everybody can work from home. This is coming.
And, you know, I really want to make sure, because we back office people, I would never have allowed them to work from home. We got ourselves organized and we got everybody agile. And literally, as I flew back, they got the first case in New York with COVID from that was solicitor or whatever. But it wasn't me. But I came back, we locked down, we phoned everybody up and told them we were open for business. And it was an amazing time because we were. I think we did a closing on the first week of lockdown with Addison Lee.
Anyway, so we go through all that process, we go through the lockdown, and me and my business partner were like, you know what? Maybe this is a good time to think about having some liquidity in our business.
So then, you know, after we started getting back to normal in 2021, the
[00:16:58] Speaker B: M& A market came back really quickly.
[00:17:00] Speaker C: Well, exactly. And we then hired corporate finance folks and started preparing for. We'd had private equity people knocking on the door for a long time because obviously we've been tracked.
So eventually we did lots of marketing meetings, which is like saying, don't call us, we'll call you my business. Partly to say, as soon as you asked the question about how many women in their firm, I knew they weren't going to be successful.
But no, all joking apart, we chose a few. A handful of people that we liked. And Levine Lightman was one of those people.
And we didn't know who they Were they were in fact the underdog, to be honest with you, initially.
But the way that the team sort of managed to manifest themselves over that kind of very short period in the investment round, yeah, they were the ones that rose to the top.
[00:17:55] Speaker B: So let's bring it right up to date. So earlier this year, your European mid market private equity firm Oakley Capital and one of Canada's largest institutional investors, lacasse, made a major investment into Glass.
So that must have been a really big event for both you and for the business.
Could you give us a feel for how that deal evolved?
[00:18:23] Speaker A: It's worth saying as well, for the benefit of our listeners and viewers as well, that although it wasn't disclosed, reported widely is in a region of a billion. I mean, you are not talking small change here, are we?
[00:18:34] Speaker C: No, it was amazing. Really amazing.
Yeah. So that whole journey started probably 20, at the end of 2024, you know, these investment bankers ask you to turn up at their private equity conferences and start talking about your business.
So I did some of those road shows and then obviously those people would then phone my current investor up and say, when are you going to sell Glass?
And so momentum was building in the background. Levine were also looking to fundraise this year in Europe and so they were looking at which portfolio companies they could showcase.
And I think my investors started to realize that Glass would be a significant, you know, result for the firm and obviously for the shareholders.
So we had a conversation early Q2, maybe around, let's go for this because we've got a lot of momentum.
Oakley were definitely up there and had. I'd been talking to them about 18 months before and I said when I walked in the room, there was an all female team in the room. And I was like, wow. And Christina Popskiu is absolutely amazing, as is Sam Fennec Whitley. So anyway, they really made me feel very welcome and they are set up to support founders, so they were my benchmark.
And then we met with, I mean, probably over 100 PE firms in all, from the good, bad and the ugly, shall we say, who were interested in investing in the business. And so we hired two investment banks, Deutsche bank and Baird.
And when we started the process, it was a huge, a huge mammoth exercise. And I didn't even realize because nobody really tells you as a founder or even anyone that's not been through this process, what to expect because I don't know if they assume that you know what to expect, but there was a lot we were ready because we had a data cube and all that good stuff, but there was a lot of time spent diligence, conversations, calls, meetings.
And then we finally got to a place at the end of November where we were ready to go.
And so the button was launched with a very small group of people and we went from there.
[00:21:07] Speaker B: So you ended up with two taking on two new investors. They can both come in at the same time.
[00:21:13] Speaker C: So lacasse is one of. Does a lot of co invest with Oakley and that kind of was.
[00:21:19] Speaker B: So Oakley led the deal and then they brought lacasse in alongside them. And Levine Lightman have rolled over as well, aren't they? So they still kept an equity stake as well.
And you were saying when we were talking before that you were enjoying the relationship with Oakley. It sounded like that was going really well.
I'm interested in what they're doing that's so. Right. That other PE houses might learn from.
[00:21:41] Speaker C: Yeah, I mean, I think the interesting thing is, and at the end of the day, look, we all know, right, you want to do 3x, you want to do 3x, your investment, right. And so how do you get there? And you know, Glass was never really a buy and build shop. In fact, we've actually done four acquisitions is more by luck than judgment because that wasn't what I set out to do.
But they came and it made sense for us to do those acquisitions.
I think the thing about Oakley is because they're used to working, you know, founders, I am obviously CEO as well, but they are really, it's a partnership approach. So we, we have a strategic plan. We want to now become a FinTech and 3.0.
And so we are working together to leverage resources. I mean, they phoned up all of their LPs and said, you need to use Glass.
You know, they've done the things that you might expect people to do, but they've actually basically been bullying their LPs to use glass. And they're setting up amazing meetings. They are, they've got a lot of influence and I think in some ways Oakley are a bit of an underdog in the private equity space. And so surprisingly they, they've got a lot more resources than people think.
So I'm just using them as a resource and I like the people a lot. We went on a little off site at the beginning, just two weeks after we signed the deal on New Year's Day, and it was in Switzerland because one of the partners lives in Switzerland.
And so we had a working session in the morning and he said I was going to go for a hike with my management team and off we go up the mountain and we get round the corner and there's this big beautiful table laid out with a lunch and a chef and all sorts of things. And it was like going on a date with 10 people.
[00:23:28] Speaker A: What the odds of that? Walking around the corner and seeing a table laid out for 10 people.
[00:23:32] Speaker C: It was, you know, so, so what I mean is they want to have fun as well and we want to have fun, but obviously we do, we're taking it very seriously as well.
[00:23:40] Speaker A: Now, my nan, my nan, my late nan, God bless her, she always said to me, she's never ask a lady what she thinks the enterprise value she's got in mind for Glass moving forward.
But I will ask a question, I mean, how big do you think Glass can become?
[00:23:54] Speaker C: So, I mean, look, I never thought we'd become a unicorn. The last deal I called it Project Unicorn.
[00:24:00] Speaker A: So I love the term unicorn. Jonathan hates it.
[00:24:04] Speaker B: Well, he's always talking about it.
[00:24:07] Speaker C: Well, I, I, it was because my previous deal was called Project Unicorn. So look, I mean, I think that's almost given us the confidence to dream big.
So I've set myself a goal of 5 billion quid on the next one and I've said it out loud.
So we were aiming to grow to get to an EV of 5.
[00:24:27] Speaker B: And to do that you'll need to acquire more businesses as well. Will you or.
[00:24:31] Speaker C: Yeah, I mean, I think there's two strategies really. One is to do more acquisitions that make sense and then the second thing is really what? To complete our digital transformation to be a tech company.
[00:24:43] Speaker B: Yeah, I suppose you'll have, like everybody else, you'll have people talking to you about AI and the way to develop the business. Have you got thoughts in that regard or.
[00:24:52] Speaker C: We're already on that journey.
So we've been building our own proprietary system internally now for a while, which is a foundation stone for our Techco.
And we've got a very sort of well thought through digital strategy where we're going to take the business, which is really exciting.
[00:25:12] Speaker A: Talking about AI.
Look, you're unusual for lots of reasons. One, you're a female who's built a billion pound company, which is very unusual.
And I asked ChatGPT, I said, Give me a list of all the women UK founders who've built billion pound or billion dollar oversea unicorn valuation companies. And it's a small list, It's a very small list. Anne Bowden, Stalin bank will go down. Denise coates at about 365. There's a few others, not many do you see yourself as a role model? Do you see yourself as breaking down barriers for your successors?
[00:25:52] Speaker C: Do you know what, I haven't really thought about it like that because I haven't had a lot of time. But I am involved with, you know, other female organisations, particularly Superscalers, which is something set up by Sam Smith, who was the first female CEO in a public listed company.
So over 50 million. And you know, ultimately I think it's, it's my duty to help other female entrepreneurs get to become a billion pound plus company.
I mean, if I may, part of the problem we have is because the current system for financing doesn't really favour females.
A lot of ladies I've met, they've got these great businesses, they've started to slightly grow, find success, but what do you do? You borrow you from family and friends if you need money, then you go angel investors, then Series 8, et cetera and your share capital starts going down. And I've met a lot of females that have literally got 10, 15% of equity left sort of hanging on to their company with the fingertips.
So the whole financing, for me, investment and financing is not right to promote female founder entrepreneurs.
[00:27:04] Speaker B: Yeah, I think quite a few people who are watching the podcast will know my wife is a CEO of a business and a founder and she often says that the ladies in trying to do that, need to sort of perform out of the skin just to compete with fairly average male counterparts, which, which, you know, I think what you're doing is inspirational.
I think it really is. You may or may not see yourself as a role model, but lots of people will look at you and think if you can do that, then maybe they can.
[00:27:38] Speaker C: Yeah, I hope so.
[00:27:40] Speaker A: I was going to ask you a quick question before we go to a break, if I may, is that in terms of your investments, fairly soon after, in terms of your acquisitions, fairly soon after your investment, I know you bought an Italian company leading debt administration provider, loan agency services.
Jonathan mentioned it. I mean if you look into your crystal ball, have you got three or four of those lined up for this year?
[00:28:04] Speaker C: Yeah, I mean actually, surprisingly enough, I think a lot of the market has actually looked at glass and gone, wow, this is an opportunity. Or actually do I need to be in this business?
Because they can't figure out exactly what the, how we got this valuation, what the secret sauce is. So there's opportunities from us, from folks that maybe want to carve out their businesses. There are also a number of businesses coming to market, but you know, we've got a few things in the pipeline, but we're going to be very selective about what we decide to go after.
[00:28:39] Speaker A: Yeah. And Jonathan's a deal maker. I'm more the journalist and marketing person. But one of the biggest strengths you've got is the name Glass. It just works. It works on so many different levels as well. It's time for a quick break. When we return, Jonathan and I will be discussing our interview with Mia Drennan, CEO and founder of Glass, and answering your listener questions. That's all for part one.
So welcome back to the second half of the Dealmaker Uncut podcast. One of the beauties of this job is sharing the honors of co hosting it with Jonathan Boyers. And when I hear him getting side a deal, his eyes light up. And his eyes have just lit up. There was an enthusiasm and a spring in your step, Jonathan. We've just interviewed me adrenan of Glass. What did you think?
[00:29:22] Speaker B: So I thought she was an inspirational lady, actually.
She spotted an idea, she built a network and she spotted an idea, and then she thrown wholeheartedly everything about herself into it to grow it and develop it. And I just think she's been visionary and she's shown how a lady leading a business, founding a business can grow it. And she's handled the taking on private equity investors really well.
I just thought, and like I say, I do think she is an exceptional role model for the other ladies who are thinking of funding and growing businesses. So massively impressed. I thought she was great.
[00:30:10] Speaker A: Yeah. And you can see why, you know, people say they invest in people. You can see why they attracted so much interest because they wanted to invest in her. And the thing is, is that I don't think she's. She's not finished yet for sure.
So. No, I thought she was amazing. I thought. The thing I liked about her is that when she launched Glass in 2011, 400 meetings before she secured her first deal, albeit, she had a few, you know, a few irons in the fire as well. And when she was raising the investment, she met 100 PE houses before she opted to go with Oakleigh as well. So, yeah, really was a class act as well. So this next section is called Ask Jonathan. It's when listeners can ask Jonathan any question they want. One week we might change this up and it would be Ask Chris. And the answers will not be as intelligent as yours. But the first question, Jonathan, is, I noticed you've just flown back from Alvarez and Marcel's global leadership meeting in Connecticut. One session covered the firm's plans to further build AI into their business model. MIA just touched on it as well. What was your takeout from that event?
[00:31:12] Speaker B: So I think as regards. Well, the takeout from the event was that A and M is a phenomenal business. I mean, I came away.
It's just a great business to be part of.
I think the specific question about AI, I think across professional services and pretty much every industry, people are now wrestling with how to build and capitalize on the opportunity that AI presents and to deal with the threats.
I think that in some industries we're going to see wholesale change. But I suppose a philosophy that when I look at it, I think what AI should do is turbocharge people so people will become much, much more effective as AI is embraced in their businesses.
I think in due course a lot of businesses will hire less junior people.
But I think in the shorter term I think it's all about how you turbocharge the people in the business using AI.
But you can't ignore it. Everyone's got to have a strategy.
I think every deal that we do going forward will involve AI due diligence in the same way two or three years ago everyone started doing ESG due diligence.
I don't think a deal will get done there without AI due diligence. So already we're starting to see people offering due diligence, providers offering AI due diligence and.
I think it'll be there on every deal.
[00:32:49] Speaker A: Now a phrase I hear a lot. Question 2 is that business doesn't like uncertainty.
And I'm assuming that's the deal making sector doesn't like uncertainty either. We're recording this at the end of March.
The conflict in the Middle east is raging at the moment is that having an impact on the deals market.
[00:33:08] Speaker B: So the obvious thing that people have noticed in the last, even in the last week or so has been that interest rate cuts that had been expected are no longer likely to come through as quickly. So I think the landscape for the cost of debt is changing and that inevitably does have an impact on the deals market.
So far the gold price hasn't spiked and so there's a few indicators that say that people think there's a shock that might be short term over the next few weeks and months.
Time will tell.
It could be over quickly or it could go on a long time inevitably where anything that involves more pessimistic views of GDP growth and borrowing has an impact on the market. We've not seen loads of deals cratering yet. I know one or two deals around the market have either gone on hold or have been deferred.
But so far, I think the jury is actually out on exactly what the impact will be.
[00:34:16] Speaker A: Okay, and last question. We've got a question from a regular listener. Everyone knows there's a lot of private equity money about, they ask, but they can't find a home for it. Is that your experience?
[00:34:26] Speaker B: Yeah. So it's partly linked to the last question.
There's lots and lots of private equity funds being raised as an asset class. It's been very successful. And so there are, you know, a lot of the pea houses are sat on a lot of dry powder, but they need to find quality places to put it.
Certain sectors have become attractive and others are people.
People are more wary of things like consumer.
Certain parts of technology and services have been really attractive.
Even in technical services, which are a bit more manual activities, people are starting to see a lot of private equity activity.
But there's uncertainty in the market at the moment. And so whilst there's a lot of money available, they'll deploy it carefully.
And so we'll see at some point the market will improve and recover and there may be a bonanza. But at the moment, the pea houses are looking really carefully where to invest.
[00:35:31] Speaker A: It's really good insight. Thanks very much, Jonathan. That's all for this episode of the Dealmaker Uncut podcast. Powered by by our friends at Avros and Marcel Massive. Thank you to you, Jonathan.
[00:35:40] Speaker B: Thanks, Chris. Enjoyed that.
[00:35:41] Speaker A: It was great. Don't forget to subscribe to the podcast, tell your friends and family and follow us on social media. That's all for this episode of the Dealmaker Uncut podcast.
