ONSIDE / INTERVIEW
What are the key areas Seneca focus on when
reviewing a new deal?
The approach is to initially focus on proven key areas that are
fundamental to qualifying attractive investment opportunities;
Situation, what’s the investment for? How good are management,
existing and or new? What’s the business case? Valuations, on
entry and on exit? What are the sector and market dynamics?
What is the investment and trading risk of the business?
Our sector knowledge is enhanced by our network who bring real
expertise to situations and opportunities. This enables Seneca to
consider a broader range of opportunities than numerous other
more sector specific equity funds.
What’s business confidence like at the moment?
Honestly, pretty mixed. Whatever you’re political view of this
years election outcome, removal of the coalition and a clear
mandate for one party has given UK plc’s the appearance of a
more stable economic and business platform to attract foreign
investment. The wider global economy is mixed with North
America showing strength but Asia, in particular China, is showing
signs of exhaustion. At home the oil, gas, steel sectors and related
markets are having a tough time. However construction, house
building and automotive related sectors remain robust. So across
the UK regions it’s a mixed picture, which throws up all sorts of
opportunities that are ideal for Seneca. Investment opportunities
in this environment often arise as a result of management not
adapting to change in their markets.
What sectors are particularly alive to opportunities?
Our pipeline currently contains opportunities in the following
areas; Call Centres – refinance; Retail and wholesale – buyout;
Specialist chemicals – refinance and growth capital; Food
packaging and machinery – buyout; Financial services – growth
capital; Recycling – recapitalisation; Fashion accessories – buyout.
These deals all come from a range of intermediaries along with
relationships nurtured direct with management teams.
What does the future hold for Seneca?
We’re excited about the prospects for our current portfolio and the
volume of new opportunities we are seeing. The SME market is
not widely supported by funders with our capabilities or expertise
so we seek to continue taking advantage of this position.
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