Going private is becoming increasingly attractive to well-run businesses: Martin Towers

But a top quality management team capable of embracing change is required, willing and able to take advantage of opportunities as they arise.

There appears to be an emerging trend for good management to prefer working away from the glare and frustrations of the public markets towards the private company environment including private equity.

The number of ‘take privates’ suggests that executive management teams are enthusiastic about working for private equity who are likely to have a much better understanding of the markets within which they operate.

With potentially only one owner not a range of institutions with often widely differing views the attraction is understandable.

The rewards are potentially higher and you can focus on the growth of the business, away from the growing number of box ticking reputation conscious non-executive directors who populate the listed company boardroom.

Ironically access to finance may be improved away from the small cap problems of illiquid shares, insufficient independent analyst coverage and a depressed share price. All a barrier to exit from the listed market.

The benign trading conditions pre pandemic have been replaced by volatility, uncertainty and the revival of the economic cycle starting with downwards first. Different challenges for management but also an opportunity for the best in class. It does mean that maintenance managers should be put out to grass. There is change, there is risk, but masterly inactivity and doing nothing by preserving the status quo is not the answer.

These conditions are an opportunity for a younger diverse management team. Whilst they might lack experience of current conditions, so do their elders. Such a team can bring an IT awareness that is vital in the internet and social media age. Change can be embraced rather than be fearful, including the use of AI which will have significant ramifications for business going forward.

As more procedures are systemised and technical, it becoming increasingly important to hang onto your top people in a world of skill shortage. The politicians will not help you out as immigration is a vote losing subject.

Encouraging talented bright young things from abroad to work in the UK on any scale is a perilous path for any government. Softer skills are needed, greater empathy, a less hierarchical and blame culture, empowerment and reward to facilitate accountability and responsibility as the key ingredients towards business success.

Speed has also become of the essence. Flexibility, adaptability, short chains of command lead to opportunities being grasped. Senior management having quick access to the functional director, likewise on to the CEO and if necessary the board and investors, if all singing off the same hymn sheet on a timely basis can produce results and long term growth.

Martin Towers is the former finance director of Kelda Group, which was the parent company of Yorkshire Water, and former CEO of Spice PLC.