Andy Gregory, head of investments at BGF, looks at the impact of Covid-19 on businesses so far and what lies in store over the coming months.
There hasn’t been a lot of time to reflect on the events of the past month – I’m sure that’s been the case for many of you. We’ve all acted quickly to address the public health challenge and to look after our teams and families. The impact of Covid-19 has been swift and brutal and, in its nature, unlike anything we’ve have seen before: an economic shock that will, for many businesses, have wiped out months of trading and years of hard work, almost overnight.
It’s important to acknowledge that mentally, economically and emotionally, this has been a great deal for entrepreneurs to take on board.
We are at the beginning of what will be a very long journey. But, as I reflect on what I’ve seen in recent weeks, my overriding sentiment is measured assuredness. From the onset of the crisis, I’ve seen CEOs and management teams of small and mid-sized businesses act with decisive leadership, innovative thinking and resilience – the hallmark of great entrepreneurs.
It is exactly these characteristics that will, from an economic standpoint, help to carry the UK through what is likely to be a very difficult and demanding recovery.
I am already extremely proud of the way in which so many of the BGF portfolio have mobilised to support the national efforts in the fight against Covid-19. In Scotland, Inoapps worked throughout the night for NHS Scotland to ensure that its nurse registration database was available remotely, ensuring that all new nurses could be added to the workforce. In Norfolk, bf1 systems, which makes components for the motorsport industry, has taken on the challenge of manufacturing components for life saving ventilators. And in London, Gymbox offered its portfolio of sites across the capital to the NHS for overspill.
There are too many examples to mention here, but in the coming weeks BGF will use its platform to help champion and support these efforts, particularly within the local communities in which our investments teams live and work alongside our portfolio businesses and their advisers.
Unfortunately, Covid-19 may prove too difficult for some companies to survive. But, whilst recognising that some sectors will be disadvantaged as a result of the current and future challenges, we believe new opportunities and advancements will be created – and these need to be supported with appropriate funding. Right now, even companies experiencing rapid growth as a result of new market dynamics may struggle to manage that growth, without the right type of investment.
Within BGF’s portfolio, every business has its own unique set of circumstances and our local teams have been working directly with them to understand the best current view of operations and forecasts. Many are capitalised and resilient enough to sustain a downturn or period of closure, without any additional funding.
But it is, of course, not just about capital. We have set up cross working groups on sharing knowledge and experience within sectors, levering the breadth and scale of our platform. We continue to work with our growing Talent Network of non-executive directors and have hosted in-depth webinars on key topics for portfolio companies – from cash management to CBILS and communications through a crisis.
We are in unchartered territory, but BGF has moved quickly to adapt our processes so that we can continue to respond quickly. We have the scale and breadth to support our portfolio and make new investments, helping to safeguard growth and build strong, sustainable businesses. That is important on a number of levels – including ensuring that capital continues to support companies with strong growth potential for the future.
Despite the lingering fallout from 2008, several years of Brexit uncertainty and now Covid-19, I believe that entrepreneurs can leverage their experience from the past decade and I’m confident while the road ahead won’t be easy, we can collectively rise to meet this new challenge.