Michael Moore’s Outlook for 2024

In simpler times January was the month when resolutions were made. And February the point at which they had been forgotten. Nowadays we are challenged all year round to do something different and improve our lives as a result. It’s exhausting enough reading what is expected of us, never mind acting on the advice.

Resolutions are one thing. Making new year predictions is another hardy perennial we struggle to ignore. But probably should. If only I could resist the temptation.

You see, 2024 is going to be lively. Not least because it will be huge for elections. In Europe, voters in the 27 EU countries will go to the polls to elect a new European Parliament, while closer to home we are all but guaranteed a general election in the UK (though it could, technically be as late as this time next year). And in the USA, there is the not inconsequential matter of Congressional and presidential elections.

These elections matter, especially where there is likely to be change, but they are not the only ones. Across the globe, the Centre for American Progress think tank argues it is a standout, even historic, election year in prospect. They estimate more than 2 billion people in 50 countries will be heading out to vote at some point in the next twelve months. And a quick look at the list of elections, which includes those due in Taiwan, India, Pakistan, Mexico and South Africa, reminds us that elections have consequences well beyond domestic borders.

Which in turn underpins one of the key findings in the World Economic Forum’s ‘Chief Risk Officers Outlook 2023’. The report highlighted that risk officers see ‘continuing volatility in geopolitical and geoeconomic relations between major economies [as their] biggest concern’, in both the private and public sectors.

Politics and economics are hard to separate, even if they can be as messy a mix as oil and water for many business leaders. But at a moment in time when the global security situation is tense, to put it mildly, in the middle east, the South China Sea and elsewhere, the links and consequences cannot be ignored.

De-globalisation was one of the big themes of the past year, evidenced by the ongoing US-China tensions and the ongoing western stand-off with Russia because of the war in Ukraine. De-carbonisation of the global order in the face of disastrous potential climate change remained a frustratingly contentious subject, as COP-28 underscored. (And for students of the ‘4Ds of disruption’, which many commentators alighted on this year, digitalisation and demographic change powered on, too.)

2024 will be all of that and more. Meaning what exactly? The economic base layer is not exactly looking robust. If we look at the forecasts for the UK, they remain downbeat, though the fall in inflation in December offered a new twist to the narrative. Elsewhere in Europe, the budgetary challenges in Germany and scaling back of pandemic-era fiscal loosening has created less confident forecasts for the Eurozone and elsewhere, too.

Now add the political uncertainty of all those elections, some wild cards amongst them, and business sentiment will hardly be emboldened. Top off this layer cake with those bigger picture disruptive forces and we maybe should have stayed under the duvets this month.

And yet. While 2023 will be forgotten as quickly as it can by the private capital industry, by the end of the year there were some encouraging signs of new opportunities opening up. Industry figures described ‘Heathrow holding patterns’ as multiple sales processes were readied, some advisors described buy-side pipelines almost as excitedly as sell-side expectations. Fingers are duly crossed for a stronger year.

As industry dynamics develop this year, the hope is that the politics evolve in a realistic fashion, too. Private capital drives the growth politicians need, as the 2.2m people employed in industry-backed businesses underline. And that dynamic effect depends on an internationally competitive investment environment for the 140,000 people in the UK who work in the private capital ecosystem.

Both points will remain at the heart of our political discussions this year. Reinforcing the fact that the UK’s private capital provides a competitive advantage which matters when policymakers are looking to develop new parts of the existing economy and re-wire the mature economy to adapt to those disruptive forces that yield for nobody.

So, whatever way you look at it, 2024 will indeed be a lively year. Perhaps an easy prediction to make. Which simply shows the prediction game will always be preferable to the grind of resolution-keeping. Now, where did I leave that list?

Michael Moore
Chief Executive, BVCA

This article was originally published on 12 January 2024 on the Private Equity News website here.