Business Wire

Global Finance Execs Predict Imminent Downturn, According to AlixPartners Survey

Share

Global consulting firm AlixPartners today announced the findings of its 17th Annual Turnaround and Transformation Survey, which reveal that over 600 of the world’s leading finance professionals most experienced in responding to the downside of economic volatility see a period of widespread business distress looming.

  • For the first time in 50 years, the downturn will be inflation-led – with 97% predicting that inflation will be a major driver of economic stress
  • 24% anticipate a recession before the end of this calendar year, and
  • 70% see it happening in the next 12 months
  • More than half of global respondents (57%) believe the likelihood of a U.S. recession is 50% or more in the next 12 months.

Challenging financing markets and the efforts of ESG compliance
As belts tighten, companies’ chances of survival will be measured by the amount of cash sitting on their balance sheets. More than a third of survey respondents expect the majority of distressed companies that tapped the credit markets for financing in 2021 will need more in the next three years. Adding further pressure to the situation: survey respondents say that the availability of capital has decreased (44%) or remained flat (43%), and 52% say financial terms have grown more restrictive compared with 2021.

Compounding the already challenging financing markets are the efforts to comply with ESG guidelines. More than 84% of survey respondents believe a company’s ability to comply with ESG guidelines will impact its financial performance, and 69% agree that access to financing depends on ESG compliance.

Recession-driven M&A activity expected to jump
A recession will drive not just company restructurings but will lead to a new round of industry consolidation and reinvention: 76% of survey respondents believe that M&A transactions involving distressed assets will increase; 12% think that these will reach a new high. In an environment ruled by disruption and uncertainty, major corporations are attempting to stabilize enterprise value, and private equity firms are streamlining their portfolios. This environment creates opportunities for companies with the appropriate capital structure to pick up weaker players via M&A and build greater competitiveness for the long term, potentially at discounted prices. On the flip-side others are reassessing geographic areas of challenge or other cost-cutting measures and taking strategic action to prune portfolios and corporate structures. Would-be buyers and sellers alike are facing renewed pressure from investors and boards to focus on their core businesses to drive growth in the face of disruption. It remains to be seen where the best deals lie and who will benefit the most, but it’s clear that our respondents see a busy market on the horizon.

These findings are based on a survey conducted in May 2022 of over 600 senior experts from investment banks, lenders, financial advisory firms, law firms and corporate professionals across 20 industries based in the US, UK, Europe, Middle East and Africa, and Asia. The full report, “Preparing for the Storm” can be viewed at: alixpartners.com/storm.

Joff Mitchell, global co-lead of the firm’s Turnaround & Restructuring Services practice, said: “Business leaders must brace for further uncertainty in the realm of geopolitics, interest rates, and inflation. Growth can no longer be fuelled by cheap money, and business models have to be supported by profits. The winners will be those leadership teams who can transform their businesses with pace, agility, foresight, and an action-oriented point of view to navigate the choppy waters ahead. If a ‘turnaround mindset’ proved to be a defining factor in establishing a competitive edge during the height of the pandemic, it must now be locked in to effectively tackle a new and even bigger wave of market volatility.”

Jim Mesterharm, global co-lead of the firm’s Turnaround & Restructuring Services practice, said: “The finance experts who responded to our survey have borne out the stark reality — that the day of recession reckoning is upon us. While no one can pick the precise timing, our respondents tell us we are heading for a global recession and another intense period of restructuring. Companies unable to refinance because new funding is not available or because it's too expensive, are going to be at the forefront of this. If your runway is less than a year, then you’re heading for panic mode, assuming you’re not in it already.”

About AlixPartners
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.

To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.

Contact information

Ed Canaday
+1.917.434.5075
scanaday@alixpartners.com

About Business Wire

Business Wire
Business Wire



Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

Blue Yonder Announces Binding Agreement To Acquire One Network Enterprises for Approximately $839 Million To Create Multi-Enterprise Supply Chain Ecosystem29.3.2024 13:13:00 CET | Press release

Blue Yonder, a leader in digital supply chain transformations, continues its forward momentum to revolutionize the supply chain and has today announced the signing of an agreement to acquire One Network Enterprises (One Network) for approximately $839 million, subject to adjustments. One Network, provider of the Digital Supply Chain Network™, is known for its autonomous and resilience services and is a leading global provider of intelligent control towers. Upon completion, Blue Yonder will be well positioned to serve customers’ needs across planning, execution, commerce, and networks. “Supply chains have become more complex, and as more and more companies reduce risk by diversifying sourcing of products globally, there is an increased demand for the sharing of information and resources across the whole value chain. This, along with increased disruptions and geopolitical risks, have put the pressure on organizations to build more resilient and robust supply chains,” said Duncan Angove,

Dubai Electricity and Water Authority PJSC Shareholders Approve Payment of AED 3.1 Billion in Dividends29.3.2024 13:12:00 CET | Press release

Dubai Electricity and Water Authority PJSC (ISIN: AED001801011) (Symbol: DEWA), the Emirate of Dubai’s exclusive electricity and water services provider and majority owner of the largest cooling services provider, which is listed on the Dubai Financial Market (DFM), reported that its shareholders have, in the general assembly held on March 28th, 2024, approved the payment of total dividend of AED 3.1 billion with a record date of April 8th, 2024. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240329162756/en/ Dubai Electricity and Water Authority PJSC shareholders approve payment of AED 3.1 billion in dividends (Photo: AETOSWire) General Assembly Details The meeting, chaired by HE Matar Humaid Al Tayer, Chairman of the Board of Directors of DEWA, was attended by HE Saeed Mohammed Al Tayer, MD & CEO of DEWA and Members of the Board of Directors of DEWA as well as 85.9% of the shareholders. The assembly was held on Thursday (2

PAN Finance Names Libertex ‘Global CFD Broker of the Year’29.3.2024 06:25:00 CET | Press release

As the first quarter of 2024 draws to a close, Libertex is thrilled to announce its first accolade of the new year! The established global financial publication PAN Finance has determined Libertex to be the ‘CFD Broker of the Year – Global 2024’ following a rigorous evaluation process conducted by the publication's highly experienced editorial and research teams. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240328235325/en/ (Graphic: Libertex) PAN Finance is a trusted source of global financial intelligence with an impressively wide readership across 150 countries. Its ecosystem includes a quarterly magazine, special reports, a news website, and various social media channels. As an organisation, PAN Finance is committed to providing concise, intelligent, and up-to-date news for a worldwide readership of specialists spanning the entire finance industry. The company's awards programme aims to serve as a true indicator of exc

Midea Group releases its first-ever ESG brand story with an unexpected VIP visit highlighting its commitment to sustainability.29.3.2024 02:39:00 CET | Press release

Midea Group: This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240328526418/en/ Background: Midea Group, a leading global technology group, recently released its 2023 Environmental, Social, and Governance (ESG) Report with ambitious sustainable development goals set for 2030. They include achieving over 500 megawatts of photovoltaic power generation, reducing greenhouse gas emission intensity (scopes 1 and 2) by 0.040, secure Energy Management System Certification for 50 factories, and achieve 100% carbon footprint accounting for major categories of smart home appliances. This is aligned with the Sustainable Development Report Standards of the Global Report Standards of the Global Reporting Initiative (GRI). The new report and campaign focuses on four dimensions: Protect the Blue Planet, Build a Harmonious Community, Practice 'Bring Great Innovations to Life', and Jointly Create the Prosperous Ecology. The campaign: Midea’s ESG

DC Secretary Announces Annual Determinations Committees Outcome28.3.2024 21:14:00 CET | Press release

DC Administration Services, Inc. has today announced the composition of five regional Determinations Committees (DCs), effective from April 27, 2024. Voting Dealers (for all regions): Voting Non-Dealers (for all regions): Bank of America N.A. Citadel LLC Barclays Bank plc Elliott Management Corporation BNP Paribas Pacific Investment Management Company LLC Citibank, N.A. Deutsche Bank AG Goldman Sachs International JPMorgan Chase Bank, N.A. Voting Dealer for the Americas, EMEA, AEJ, and Japan Determination Committees: Mizuho Securities Co., Ltd. The process for selecting DC members is specified in the DC rules. The DC rules, along with more information about the Determinations Committees and what they do can be found at the Determinations Committees website: https://www.cdsdeterminationscommittees.org/. View source version on businesswire.com: https://www.businesswire.com/news/home/20240328441002/en/Contact information Press Inquiries: Orlando Figueroa orlando.figueroa@citadelspv.com

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom
HiddenA line styled icon from Orion Icon Library.Eye