Marius Mørch Larsen | Finansavisen | 22 april 2016
Read the article in Norwegian
Norway is at a turning point. The country has enjoyed strong growth for a long time and is now in a phase of consolidation before the next wave of growth, says Alex Stirling, managing director of PE fund Carlyle Group.
Elon Musk is in Norway and the Prime Minister is holding a talk about innovation today. Innovation gets a lot of attention, from government, companies and people. Norway understands that something must be done to create future growth. That means this is a good time to invest in Norway, says Stirling.
Along with his Carlyle colleague, Managing Director Eric Kump, Alex has been in Norway this week. Both to meet customers and investors, but also to visit the Norwegian office of one of Carlyle’s more sensational purchases. For rather than hiring consultants to work on one of their turnaround cases, Carlyle recently bought 51 per cent of consultancy firm PA Consulting Group. It has attracted attention since it is often these companies that help private equity funds turn around their investment, but this time the PE fund will assist PA to grow.
We were contacted over several years by a number of companies. But either we were going to be swallowed by a large company, or they just offered money. We want access to new customers, says Alan Middleton, CEO of PA Consulting Group who is also visiting.
Stirling is quick to compare the situation between the PA and Carlyle, with the situation in Norway.
When we invest, we look for good companies with good management that can grow further. This was the case when we invested in PA Consulting Group and this same potential we find in many companies in Norway today, says Stirling. Middleton agrees.
Norwegians and Norwegian journalists are too strict with Norway. A country that only uses 4 percent of oil profits will get along fine. Scotland has about as many residents and we used up everything, says Alan - the Scottish management consultant.
Why bother with little Norway? Well, Norway is like the companies our industry likes. Solidly run and at an inflection point, says Stirling.
Carlyle is one of the world's three largest private equity funds, with nearly 200 billion dollars in total.
We've been around for 20 years. Many of the largest financial institutions and pension funds in Norway are investing in Carlyle, but few people have heard of us. You simply don’t see our name so often, says Kump.
Stirling explains that like many private equity funds they have a five to ten year plan on their investment.
We see that the oil sector, for example, is challenging today, but over ten years, it is obvious that a growing population will need energy. We have long horizons and can think ten to fifteen years ahead on strategy, and look through short-term lows. While others run away, we see great potential in the energy sector, consumer goods and healthcare industries, says Stirling.
When the Prime Minister talks about innovation today, the questions should be how do we stop people from looking for jobs for life and how do we get smart people upwards in the value chain, says Kump.
It's strange times in Norway is the feedback I get, says Stirling. He continues to explain that in the last 24 hours he has spent time with the biggest companies in Norway. Europe, and especially Norway, is threatened by macroeconomic winds. How do we help companies with growth now? He says the markets thirst for innovation now.
Instinct in a crisis is to cut costs. But it does not hold. We cannot just talk about cost cutting.