Partners at Fishers are hopeful the team will allow the firm to acquire business higher up the trading curve by bringing together experts in equity funding, debt funding and corporate finance with turnaround and insolvency practitioners.
Speaking exclusively to Insolvency News, Brian Johnson, partner at HW Fisher, said the new team will work uniquely to intervene in failing businesses to make them more attractive to corporate financiers ahead of entering administration.
He explained: "If you think about SMEs now, a lot of them are called zombie companies where they have a massive overhang of debt and no private equity fund is going to put money into their business if they think it is just a massive black hole.
"However, for some companies, it is inappropriate to go through the liquidation or administration process as they would lose their operating licences. In such circumstances, a CVA or partnership voluntary arrangement ensures that creditors get Xp in the pound.
"If I am an equity investor, I then know the lump sum that is going to pay off the debt and the balance that is going to be used as the working capital for the company – it is a model I can see playing out."
A 'proven' model
Johnson said the multi-disciplinary approach was a model that was hugely successful at Coopers & Lybrand and he can see the model enjoying a renaissance in the current climate.
He added: "From the private equity side, there is a hunger to get more involved in some of these situations – from distressed funds particularly."
By Joe McGrath