John Fiorentino Discusses Hidden Inflation Risks for Private Equity Firms Amid Tariff Uncertainty in S&P Global Feature
As private equity firms navigate the ripple effects of U.S. tariffs, John Fiorentino, Managing Director of A&M's Private Equity Performance Improvement practice, highlights a critical and often overlooked vulnerability: the inflationary exposure buried deep in the supply chain.
In a recent S&P Global article, John explains that while many fund managers understand direct tariff exposure, few have visibility into how their suppliers' suppliers are driving up costs behind the scenes, revealing a hidden threat that could delay exits and chip away at returns.
“What you don’t know is the inflationary exposure that’s underneath that, when your supplier now passes on a 25% [price] increase,” Fiorentino said.
These hidden pressures can have significant downstream effects, threatening to:
- Delay transaction timelines
- Complicate buyer negotiations
- Reduce exit multiples and ROI
How A&M Can Help
A&M is experienced in conducting rapid assessments for manufacturers, resellers and distributors across industrial, med tech, electronics, consumer goods, food/beverage and other related industries. That’s why we’ve developed our TRaCCO (Tariffs, Resiliency and Cost/Cash Optimization) assessment, which is designed to rapidly expose risks, identify opportunities and provide a roadmap to create competitive advantage.
We focus on key areas to help companies mitigate tariff risks, including:
- Rapid Tariff Impact and Mitigation Assessment
- Inflation Management, Resiliency and Gross Margin Mitigation
- Working Capital Cash Optimization
A&M understands the urgency to respond to this challenge and would like to discuss your best path forward as soon as possible.
