Nick Miller

As higher for longer inflation and interest rates continue to challenge the broader economy, companies less tied to cyclical market trends will be able to attract capital from private equity.

Nick Miller, co-founder and partner at Fortitude Investment Partners, a leading private equity firm, believes the current economic scenario offers few immediate catalysts for change. “While interest rates will eventually ease and spending will return, the turnaround will be slow,” he says.

“We’ve always been mindful to invest in companies that are not heavily linked to vagaries of economic cycle.”

Miller warns that businesses dependent on rapid economic recovery or that are heavily leveraged may face significant risks. “For high beta businesses that perform poorly when spending contracts, the delayed recovery could pose serious challenges,” he notes. “On the other hand, businesses with stable growth drivers and low correlation to discretionary spending will remain robust.”

Fortitude’s investment strategy focuses on investing in Australian companies, particularly in regional areas, with enterprise values ranging from $10 million to $80 million.

“We invest in high-quality companies in sectors like healthcare, technology food, and industrials, which exhibit secular growth potential, regardless of broader economic conditions. Our portfolio continues to grow and we remain confident in our long-term approach. We are alert to economic challenges, but not alarmed,” says Miller.

Despite some exposure to consumer discretionary sectors, Fortitude’s portfolio has shown robust growth, with a 15% increase in EBITDA over the last quarter, far outpacing Australia’s 0.2% GDP growth.

While economic growth may be sluggish, Fortitude remains focused on what matters most- helping its portfolio companies capture market share and grow steadily.

“We are more interested in improving their market share by 10-20% than worrying about minor fluctuations in GDP,” notes Miller.

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