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26/09/2013

James Henderson on why professional practices make perfect investment opportunities

Recent figures from the UK Government’s Department of Business, Innovation and Skills show that the professional services sector is currently worth 11% of the total UK economy and is set to grow at 4% each year until 2021.

In Wales, the £40m Wales SME Investment Fund enabled Finance Wales to invest in certain sectors of the Welsh economy, such as professional services, for the first time.

A number of Welsh accountancy, dental and legal practices as well as estate agencies have all shown interest in the potential investment opportunities on offer from Finance Wales.

In April Finance Wales completed its first investment in the sector – an MBO of a thriving Welsh dental practice and since the Fund’s launch we’ve invested over £2m in the sector through 6 businesses to date.

A reputation for generating stable, long-term revenues

Many of the Welsh professional services businesses we’ve spoken to are well-established. They’ve built their reputations over a number of years, have excellent relationships with their customers and as a result, benefit from ‘reliable’ revenue streams and strong cashflows.

Sector growth - new opportunities

Changes driven by new legislation, cosmetic procedures or treatment options are opening up potential new revenue-earning opportunities for businesses in the sector which could benefit from Finance Wales’ investment.

Succession leads to expansion

Buy outs can often lead to further expansion and innovation in an established professional practice, perhaps when a partner in a law firm retires or associates take over an established dental practice.

Backing your clients

We can invest up to £2m to fund an entire deal or work with other funders, perhaps to cover vendor valuation shortfalls, for instance.

What next?

Contact us to find out how we can structure the right investment for your client.