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Kate Burgess Decline of Zombie Choking

February 4, 2013

Financial Times Kate Burgess is now optimistic about zombies – recall her end of year piece in FT: “Zombie firms choking off economic renewal” – but now: “Zombies disappearing as UK conditions ease“:

tentative signs of recovery – and so-called zombie companies disappearing at a faster rate.

quoting:

“Companies are falling over faster,” [Julie Palmer, deputy regional managing partner of Begbies Traynor, a firm Wikipedia says specializes in corporate restructuring] noted. “They are not holding out so long and are falling into insolvency after fewer county court judgments.”

and this is good news… well good news for corporate restructurers.

This trend should enable more efficient companies to acquire their businesses and expand, creating more jobs and stimulating growth.

Oh ok. But the conclusion also hints at the obvious slippery slope, because what’s good for investment managers is perhaps not ideal for all sectors:

The number of distressed retail businesses rose 30 per cent to 14,000. There were also 11,600 distressed bars and restaurants – up 48 per cent on the third quarter.

One zombie begets another…

See also PEnews: “Secondary Market May Gain on Zombie Apocalypse” by Michael Wursthorn:

Zombies may become the secondary market’s best friend – With a number of private equity vehicles reaching so-called “zombie fund” status, the need to find a solution for agitated investors presents an opportunity for players within the secondary market.

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