Member News Archives - The IFT

Category: Member News

IFT appoints new Chair

Posted on by Nicolette Stickland

The Institute for Turnaround is delighted to announce the election of the new Chair of its Board of Directors, Claire Burden. She will take up her position at The IFT AGM in September 2024.

Claire will bring extensive experience as an independent IFT member to the role, having spent ten years in interim company advisory and director roles, with a particular focus on financial turnaround. Claire has been a statutory director for nearly 50 entities and brings experience as both an independent and corporate adviser. Most recently she joined Evelyn Partners heading up their consultancy practice. She became a Fellow of The IFT in 2024.

Claire said: “I am thrilled to have been elected to the position of Chair of The IFT, having been an accredited member since 2013 and a Board Director since 2022. I look forward to working closely with all members of The IFT to continue to develop its membership and profile at a really exciting time.”

Milly Camley, CEO of The IFT, said: “Claire has been an active member and Director of The IFT, having served on our West & Wales Committee and as Chair of our membership committee. We are delighted that she will bring her extensive experience as an independent and corporate adviser to the role of Chair. We’d also like to thank Andy Leeser for his experienced leadership and contribution to The IFT during his time as Chair”.

Andy Leeser is stepping down as Chair and Board Director at the end of his three-year term, having overseen a successful re-branding process, extension of The IFT’s thought leadership and stakeholder engagement activity, as well as significant development in relation to The IFT’s next generation programme.

Andy said: “I have been delighted to see the development of the profile and importance of The IFT over the last three years. In the future I believe our independent and corporate members will be working together ever more closely to further raise the profile of our profession. I think that Claire has exactly the right balance of skills and experience to deliver this and I wish her and Milly every good fortune. They have my full support as a member and Fellow of the Institute.” 

IFT and Macfarlanes publish update on the business funding landscape

Posted on by Nicolette Stickland

Today The Institute for Turnaround (The IFT) and Macfarlanes published a report outlining recent trends in the business funding landscape in the UK and looking forward to what we might expect to see as we move through the remainder of 2024.

The report includes a discussion of the outlook for private equity sponsors and corporate borrowers, private credit funds, real estate debt and how private credit fund lenders are dealing with corporate borrowers in financial distress.  It highlights the improving outlook in 2024 compared to 2023, with the beginnings of a resettling of inflation and the expectation of interest rate cuts, expected to lead to an increase in UK M&A activity.

For private equity sponsors and corporate borrowers, there is very significant liquidity waiting to be deployed, a growing number of companies waiting to be exited as part of the typical investment cycle, and cheaper debt as well as demand from investors to see returns on capital.

Moving through 2024, private credit funds will also be looking to provide buy-out financing and satisfy a strong appetite for deployment, as well as exploring new strategies such as net asset value (NAV) basis lending and specific asset class strategies. The increased presence of private credit funds in the real estate debt space is likely to be bolstered by the recent growth of operational real estate.

Nevertheless, across the various types of funding, caution and discernment in relation to deals and sales processes is likely as funders take a prudent approach in light of the macroeconomic pressures of recent years, as well as continued geopolitical instability and scrutiny of funds. For businesses experiencing financial distress private credit funds may increasingly look for the provision of additional equity or where this is not forthcoming, may begin to ramp up the pressure, either for a business to seek more external capital or make a sale.

Over 2024-25 we will see a significant number of financing deals coming to maturity, in particular as a result of sale processes as well as increased M&A volumes. Funders will be looking for overdue returns, whilst remaining conscious of the importance of good relationships and flexible approaches, especially for businesses seeing difficulties and in an increasingly competitive market.

This report forms part of a programme of work that The IFT is carrying out on the funding environment, including our Funding Conference held earlier this year in association with Macfarlanes. Later in the year we will expand on the themes covered in the report with an overview analysis of the business funding landscape based on interviews with various lenders and funds, covering how approaches and considerations can differ across funding types.

We’d like to thank Macfarlanes for working with us on this report and providing their expert insight in this area.

You can read the report here.

PART 26A RESTRUCTURING PLANS DRIVING CONSENSUAL RESTRUCTURING, RESEARCH FINDS

Posted on by Nicolette Stickland

Research from The Institute for Turnaround (The IFT) found that Part 26A Restructuring Plans were being considered in increasing numbers of cases and were often successful in encouraging consensual agreement.

 Further development of case law and market practice would help more SME firms take advantage of this tool.

 Part 26A Restructuring Plans, introduced under the Corporate Insolvency and Governance Act 2020 represent a powerful company-side, non-insolvency tool for businesses that may be experiencing financial distress due to successive global and economic pressures.

The IFT is strongly supportive of the potential for Restructuring Plans to help drive improved future financial performance to avoid unnecessary insolvencies.

In the first quarter of 2024 The IFT conducted a series of regional roundtable meetings in bringing together IFT independent members, lenders, alternative lenders, investors, lawyers, advisers and statutory and other key stakeholders.  The roundtables investigated a mixture of experiences with and views on Restructuring Plans and were supplemented with a follow-up survey to participants.

Survey respondents indicated gathering pace in the number of companies considering or proposing a Restructuring Plan to achieve the survival of a business:  51% in the past 6 months compared to 24% in the past 12 months and 12% in the past 18 months. These had been in a wide range of sectors, with the top three being retail, manufacturing, and casual dining.

Restructuring Plans had also been considered for companies of a range of sizes, with 22% of respondents considering for companies with a turnover of less than £25 million, whilst 52% had considered for companies with turnovers between £25 and £100 million or £100 million plus turnover.

41% of respondents had discussed the possibility of applying for sanction of a Restructuring Plan in negotiations for a restructuring of a business. Of those that had specifically discussed the possibility of a Restructuring Plan as part of negotiations, 70% indicated that this had helped achieve a consensual agreement. This demonstrates positive outcomes for both a company and its creditors and stakeholders. A clear message from the roundtables was also that the value that can be preserved and generated using a Restructuring Plan was substantial, as well as potentially speeding up the delivery of a turnaround.

The IFT is committed to engaging with market and other stakeholders to encourage solutions to such practical issues, recognising that the recent Court of Appeal judgment in the case of Adler helps provide clear guidelines for businesses of all sizes in relation to Restructuring Plans.

Milly Camley, CEO of The IFT said, “Part 26A Restructuring Plans are now coming of age with the Adler judgment which provides helpful guidance for businesses and stakeholders. The IFT is working with a range of stakeholders to seek to encourage engagement and development of market practice so that the full range of businesses can benefit and thrive. The roundtable discussions also highlighted the important role that IFT members can play in supporting the use of Restructuring Plans and helping to engage with stakeholders”.

You can read the report here and the survey findings here.

 

The IFT Quarterly Update: continued strong demand for turnaround support as businesses struggle with debt costs

Posted on by Nicolette Stickland

The IFT’s quarterly update looking at turnaround and restructuring activity across sectors shows continued demand for turnaround support at the start of 2024, with 50% of The IFT’s partner firms surveyed seeing an increase in activity in Q1 2024, with the rest seeing about the same level of activity as the end of 2023.  The busiest sectors for turnaround and restructuring activity in the quarter were real estate and construction. The costs of servicing debt was the most common reason IFT partners saw for businesses experiencing distress, overtaking inflationary pressures which had been the most common factor at the end of 2023.

According to data from FRP Advisory, whilst Quarter 1 2024 saw a lower level of insolvencies than the previous quarter, there was a 2.1% increase in the number of businesses experiencing distress compared to Q4 2023. This may indicate businesses increasingly struggling with levels of debt and costs pressures after a number of difficult years, with often a need for turnaround support to help address these issues and maximise improvement.

As we move through 2024 we will have a greater sense of the degree to which businesses are able to utilise such support and avoid insolvency.

The full update can be found here: Quarterly Review Q1 2024 FINAL

With thanks to FRP Advisory and our partners who contributed to this update.

Future Proof : IFT study of younger turnaround professionals suggests they are more collaborative and solution focused

Posted on by Nicolette Stickland

New report from The Institute for Turnaround and t-Three/Kiddy & Partners highlights key differences between younger turnaround professionals and a broader cohort of professionals 

The skills of turnaround professionals in providing immediate viability and confidence to businesses and stakeholders in those businesses, and in the transformation and adaptation of companies to new or unexpected challenges are an asset to UK plc. The recent economic backdrop has highlighted the value of turnaround in a difficult economic climate, with our latest annual Societal Impact Report highlighting that IFT accredited members saved in excess of 55,000 jobs and £2.6bn in shareholder value in the year 2022-23. When we factor in the work of our partners the number of jobs saved rises to just shy of 150,000.

Turnaround is therefore an important business discipline – a profession of professions, which will continue to be crucial for the success of UK plc. In the longer term, drivers of economic and social change – technology, trade, the geopolitical context- mean that turnaround professionals will need to support businesses to adapt and transform to the evolving landscape.

The Institute for Turnaround and t-Three/Kiddy & Partners have undertaken what we believe is the first survey looking at the characteristics and traits of younger turnaround professionals. According to the research, younger turnaround professionals demonstrate some significant differences when compared to a general population of working people.

The report, Future Proof: The Traits and Attributes of Young Turnaround Professionals, surveyed turnaround professionals from fields such as banking, law and accountancy. They completed Facet5, a globally recognized Five Factor trait personality questionnaire accredited by the British Psychological Society and designed specifically for the workplace.

The responses from participants indicated three key areas where turnaround professionals’ traits and behaviours can be distinguished from those of general employees:

  • Turnaround professionals are more likely to demonstrate behaviour which seeks to resolve differences of view and disagreement in a calm, non-argumentative way to achieve a consensual position.
  • They also show a higher tendency to share their processes and approach, favouring working collaboratively towards a successful outcome, taking into account others’ input and feedback along the way.
  • Finally, those in the participant group show a greater tendency overall towards working to high standards and hence will display a strong sense of duty, responsibility and conscientiousness.

The research highlights the distinctive traits displayed by younger turnaround professionals and also indicates some possible areas of professional development such as stakeholder management skills and strategies for dealing with confrontation. It provides a useful starting point for further research about this important profession and what skills and competencies will be required to ensure future delivery of successful turnarounds.

You can read the full report here.

The IFT’s first Quarterly Update: increasing demand for turnaround services in the face of inflationary and costs pressures

Posted on by Nicolette Stickland

As official figures show that the UK economy entered a technical recession in the last quarter of 2023, today we publish The IFT’s first quarterly update, covering activity in the turnaround sector as well as distress and insolvency statistics for Quarter 4 2023.

This update supplements our annual Societal Impact report which surveys our independent members and corporate partner firms. Last year’s report estimated that accredited turnaround professionals saved an estimated 55,000 jobs in 2022-23, helping UK companies to add £2.6 billion in shareholder value.

The vast majority of surveyed firms specialising in turnaround saw an increase in activity in the last quarter, with construction, real estate and financial services the busiest sectors seeking turnaround expertise.

Inflationary pressures and the costs of servicing debt were the top two reasons turnaround professionals saw underlying business distress, highlighting the difficult economic context for companies seeking support.

With thanks to FRP Advisory and our partners who contributed to this update. These updates will be released on a quarterly basis to provide a snapshot of trends in the turnaround sector and business distress.

IFT Quarterly Update Q4 2023 FINAL

The IFT Review of 2023

Posted on by Nicolette Stickland

As we approach the end of 2023, we are looking back on a productive year and would like to express our gratitude to our members, partners, and stakeholders for all their support and engagement in what has been a busy and eventful time in the turnaround space.

You can find our Review of 2023, including an update on The IFT’s plans for 2024 here.