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Building resilience in the face of COVID-19

The economic impact of COVID-19 continues to batter many businesses in the UK and across the world. Getting to grips with the risks and addressing them to build up resilience are the foundations for any growth plan and subsequent M&A. Jason Sinclair investigates the new picture of risk, Brexit and dealmakers’ concerns, among other things.

Cover Story Corporate Financier imageIn McKinsey’s 2019 guide to building resilience in clear waters, the authors repackaged an old joke: “Experts have predicted seven of the last three macroeconomic events.” Without wishing to prejudge the comedic content of the management consultants’ upcoming 2021 version, if there is anything to joke about, it might need rewriting again – either to seven of the last four, or zero of the last one.

In the 2019 world of risk and resilience, a global pandemic was so underpriced as to be almost non-existent. “Everybody talks about COVID-19 as being a bit of a black swan,” says Ian Barton, managing director and head of corporate finance at Quantuma. “But I would say that it was actually just an underpriced risk. The risk has been there – think SARS, MERS, swine flu, and bird flu. We’ve had notice on this. But nobody would have ever priced it in the way that it’s actually turned out.”