case studies | Macro advisory
Political due diligence deep dive into Turkish extractives sector
Overview
A major private equity GP sought to understand the macro-economic, political and policy risks and opportunities surrounding the potential acquisition of a Turkish mineral and mining exporter.
Work
GC’s experienced in-house global macro team provided detailed assessments on Turkish economic stability (including views on currency and fiscal outlooks), which were informed by interviews with current and former officials from Turkey’s central bank and finance ministries. Our trade practices applied their understanding of Turkish trade and extractives policy, including its future evolution, to evaluate the impact on the target.
Impact
Our report uncovered a risk of direct government intervention in the deal via an at-the-time-unannounced new national security screening regime. By overhauling key financial and legal structuring terms, our client was able to mitigate this risk.
Understanding US-China dynamics
Overview
A UK midmarket private equity client wanted to understand the dynamics of apparent “decoupling” between the US and China. This would inform an investment decision in a supply-chain business of a large Chinese-owned corporate operating in the US and UK.
Work
Drawing together a team from GC’s US and UK offices, and several sectoral practices, we delivered a comprehensive report on the political dynamics and key inflection points in China policy in the US over the coming years, and how these were likely to affect the regulation of Chinese-owned firms in the US and UK.
Impact
The work helped our client to understand the degree of risk exposure any investment would entail across various scenarios, informing further due diligence on the asset’s growth strategy and ultimately discussions at Investment Committee.
Strategic, portfolio-level advice to an investor on their China investment policy
Overview
A global investor wanted to assess whether and how to update its portfolio-wide policy on direct investments in China in a changing geopolitical context. We provided strategic advice on this decision across a 3-year time horizon.
Work
We produced a deep-dive, forward-looking report examining international and domestic politics and what these mean for a portfolio of direct investments in China across a 3-year time horizon. This drew on our in-house expertise, desk research and conversations with key stakeholders in multiple countries. We assessed the likelihood of a baseline scenario, as well as outlining a series of alternative scenarios. The report included a high-level, actionable executive summary setting out our advice on the current portfolio and future investment decisions.
Impact
The report helped the client to reach a strategic decision on its policy on direct investments in China. We also provided them with a set of indicators to monitor for signs of change that would require a need to reassess the decision in coming years.