Consulting to Balance Sheet Strategy Rides Wave of M&A
ALM Intelligence Releases Rating on Top Balance Sheet Strategy & Investor Relations Consulting for 2019
New York, NY – April 25, 2019 – New research from ALM’s Consulting Intelligence division, formerly known as Kennedy Consulting, reports balance sheet strategy projects will continue to ride the wave of M&A deals, particularly divestitures.
“M&A is driving a lot of consulting work around balance sheet strategy today,” said Tomek Jankowski, Senior Analyst at ALM Intelligence. “An important undercurrent story is that clients are starting to see balance sheet strategy as a key component of capital strategy, and an active and flexible capital strategy that is being regarded as a remedy for growth in today’s unsettled markets.”
ALM Intelligence explores the key demand drivers and how consulting providers are working to integrate their offerings across multiple ‘trigger’ service areas for balance sheet strategy, including:
- Transaction advisory – where most projects begin and clients are seeking long term, viable Newcos, and not just smooth functionality on Day 1.
- Tax strategy – which is becoming a leading driver of consulting to balance sheet strategy as clients are facing increasingly difficult political and trade headwinds, challenging their capital strategies.
- Digital transformation – as new technologies are changing how capital is utilized, and as well they are opening new capital structure opportunities. They pose new challenges such as growing regulatory scrutiny is challenging data policies.
- Human capital – as recognition is growing for the human dimension of capital and capital strategy, and shifting employee roles and relationships require a re-examination of compensation and incentive models.
- Risk – as shifting capital structures and new funding options are changing risk profiles.
- Strategic communications – an under-served part of the service puzzle in 2019, clients and consulting providers alike are realizing the importance of effective message management and onboarding communications. The focus is on not only investors but all key stakeholders — employees, managers, regulators and local communities.
After 2009, companies looked to adapt their business models to the new regulatory, customer and technology environment, but it slowly became clear there were no silver bullet solutions to alleviate the intense regulatory and market stress. Some of these companies have come to the conclusion that active and flexible portfolio and capital structure strategies are necessary. Balance sheet strategy is a key part of that, but as well, new technologies and new funding options are adding both complexity and opportunity, putting balance sheet strategy consulting front and center. The emphasis now is less on performance metric optimization, and more on longer-term, sustainable balance sheet strategies particularly as geopolitical factors rile markets globally, and in key industries.
Outside of specialist boutiques balance sheet strategy is not a stand-alone service offering for most consulting providers. This space benefits from investments providers make in many of the key component areas (e.g., digital, tax advisory, capital markets strategy, real estate advisory, etc.) Where providers were most able to move the needle in the Balance Sheet Strategy & Investor Relations Consulting Vanguard for 2019 was through closer integration and coordination of these underlying key component service areas. This put investment banks and boutiques at a disadvantage in 2019, for instance, impacting their ranking — while also putting pressure on the more event-driven providers to expand their offering beyond their traditional, siloed service approach.
Providers covered in the report include A.T. Kearney Holdings Limited, AlixPartners, Alvarez & Marsal Holdings, LLC; AWR Lloyd, Bain & Company, Boston Consulting Group; Brown, Gibbons, Lang & Company; Brunswick Group, Crescendo Communications, Deloitte LLP, Edelman, EY LLP, Fahlgren Mortine, FTI Consulting, Inc.; goetzpartners, Houlihan Lokey, Inc.; Kaufman Hall, KPMG, L.E.K. Consulting, Lazard, Marakon, McKinsey & Company, Mercer Capital, Oliver Wyman Group, PKF International Ltd., PwC, Roland Berger Strategy Consultants, Schwabe, Ley & Greiner; The Equity Group, and Three Part Advisors.
ALM’s Vanguard research series assesses firms in terms of their relative ability to create impact for their clients. In addition to its overall rating assessments of consulting providers’ depth and breadth of capabilities and best-in-class provider designations, this series includes detailed capability evaluations for each covered provider as well as a qualitative analysis of their consulting organization, approach, and service delivery model.
For more information or to obtain the full version of The ALM Vanguard: Balance Sheet Strategy & Investor Relations Consulting 2019, visit the ALM Intelligence website: https://at.law.com/consultintelbalance19
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