Chapter 5 Coping with the Capital Crunch
How do you survive the crunch and thrive after it?
In mid-2008, most CEOs’ agendas were dominated by the “credit crunch”. Western capital markets were effectively closed to many companies and the financial crisis was spreading out to pose the risk of a wider recession across Western markets and of depressing emerging markets. However, even before this situation developed, the ‘capital’ in capitalism was becoming much more sophisticated, complex and globally diverse. Institutional investors are being supplemented by the modern-day conglomerates of increasingly global private equity firms, sovereign wealth funds from Asia and the Middle East, and opportunist hedge funds as sources of capital.
This chapter examines both these trends and explains how one could help provide solutions for the other. CEOs share how to ensure your business survives and that you’re ready to capture opportunities when the economy improves. They advise how to deal with the intense personal pressure of being where the buck stops when the market’s in freefall. And they explain how to navigate the developing maze of capital and how some of its newer forms may be key to your business’ survival by suggesting ways that public company CEOS can apply some private equity techniques to survive and thrive during the credit crunch.
Extracted from The Secrets of CEOs, © Steve Tappin and Andy Cave, 2008
