Insights
This video is the seventh installment in a series examining the multifaceted impacts of tariff and trade policies. By delving into the nuances of these policies, we aim to provide valuable insights and perspectives that will inform strategic business decision-making and foster resilience in an increasingly volatile global market. Future pieces in this series will explore the specific implications for key sectors, offering targeted analysis and recommendations to help businesses navigate and thrive amidst evolving trade landscapes.
Publication Date: May 15, 2025
Unprecedented uncertainty brought on by quickly-evolving tariff policies is creating challenges and additional considerations for investors and other capital providers. Different countries will have different tariffs, resulting in major impacts to due diligence for acquisitions, capital projects, intellectual property rights, and supply chains.
In the video below, Brian Gleason, John Peiserich, James E. Malackowski, and Tom Burns – experts in turnaround, supply chain, intellectual property, and political risk – discuss the issues investors should be aware of in this era of shifting tariff policies, including:
Dori Marlin: Brian, your team advises investors and other capital providers, so what is your guidance to these teams right now during this time of increased tariffs?
Brian Gleason: Tariffs have presented investors and other capital providers with unprecedented uncertainty from both the macro and micro level. The adoption of tariffs and the potential commitments for additional tariffs are more significant than any time in the past 90 years.
There is not a management team around today that has faced this level of tariff uncertainty. For investors, one thing we can be relatively certain of is almost every company forecast that you have is wrong. For your current portfolio, for those in acquisition diligence, many of these assumptions have changed. Today we are seeing more companies withdraw forward guidance than at almost any time. Not quite COVID-level of uncertainty, but almost that level. I expect this to increase, and for good reason.
For decades, our turnaround and restructuring professionals have been guiding companies through times of uncertainty. So while this moment of stress or distress is different, we know there are common themes to lead through uncertain times.
What should your portfolio management teams know?
In the stress and distress advisory world, we know there are common themes when encountering economic situations such as this. They need to know and manage their liquidity. They need to overly communicate. They need to be in regular communications with you, with other investors, with lenders, customers, vendors, and even employees. During times of uncertainty, communications are critical.
They need to update their forecast – their P&L forecast, their balance sheet forecast, and their cash flow forecast. Make sure they know what they know and what they don't know, and they need to be prepared to transparently communicate these things. What assumptions are they using in their forecast? This is very important. The explainable deviation is much easier to deal with than, “We missed our forecast.” They will be judged in retrospect on the thoughtfulness of this moment, how they are able to explain their assumptions, and what was known will be critical to maintaining credibility, particularly with companies’ lenders.
And they need to get their leadership team together. They need to establish their core analytical and response team. These are the leaders who can think creatively and analyze without full information. Not everyone on their executive team is situated to help in this regard -- don't include team members that cannot help. This is not the time to play nice. Look below the executive team for A-players that can help. Bring in your outside advisors to help now. And make sure your Ops and finance teams are on the same page. Those are the lessons we've learned from other situations like this.
Dori: Now, Tom, on the other side, your team focuses on pre-transaction diligence for investors. So how have the tariffs changed your approach at this time?
Tom Burns: Yeah, it's very interesting, so traditionally we really just focus in on the company acquisition target and the management team to understand the track record and reputation. The new tariffs have sort of added a new wrinkle into that because we're looking more at the supply chains. So instead of just looking at the sort of top layer of diligence, we're now looking at the target companies, who their third parties are, who they used, where they’re geographically located, and sort of the flow of product to the company that our client might be looking to acquire.
Obviously, geography is a huge part of this. Different countries will now have different tariffs and to that point what we're also recommending our clients – particularly when an acquisition target might have decided to change their supply chain, so perhaps they've moved away from China and now they're going to flow through Vietnam – to be very, very conscious of this issue around transshipment. And this is the illegal movement of product from China to a place like Vietnam and then from Vietnam to the US. Again, lots of companies think that they're now going to be getting product from Vietnam, but, in fact, it started in China. So this is a huge, could be a huge issue, and this is something that we'll look into. We'll look at it by tracking shipments, we'll look at on the ground, where the company is located, we'll do site visits, we'll talk to people on the ground just to get a better understanding of where you're actually getting your product from.
Again, this is the sort of information that might come out post-acquisition and could completely disrupt your supply chain and be a game changer in terms of your acquisition.
So that's really the main focus -- it's going a level deeper and letting our clients know to take your time on the diligence. Be more deliberate with your diligence. And really look at those third parties.
Dori: Great information there. And then looking at capital projects, switching gears. John, what are the key impacts from the tariffs from that standpoint, and then how should investors be managing those?
John Peiserich: Yeah, Dori, I think it's an interesting spot because the investor is dependent on the owner/operator of the project and you have to be able to trust that they have a good handle on the traditional risks – supply chain being one of them, as Tom mentioned – because what we see is in these very large projects, be it Greenfield projects or even just rebuilds of existing facilities, the ability to obtain the goods is complicated because of COVID and the things that we saw there. But now we're seeing additional costs that weren't anticipated in the planning phases of this.
So you really need to go back and look -- does the owner operator have a good handle on supply chain? Do they have a good handle on the additional cost of the tariffs? That additional complexity around obtaining the equipment is just a real opportunity for delay, which then, as an investor, really runs you out of the value of your investment.
Dori: Finally, looking at tariffs from an intellectual property perspective -- Jim, what do you see as the risk or as the opportunity that the investor should be focused on?
James Malackowski: So when we think of IP and tariffs, we think about manufacturing rotation or relocation to more desired countries, whether that be outside the US or within the US and that presents the risk and the opportunity. So if your portfolio company is moving manufacturing to what they think would be a more desired location, say from China to India, they need to give thought about what are the IP barriers that might exist in India that they had previously not considered.
And they need to give thought to what know-how may be incorporated in their prior manufacturer that needs to be transferred, and whether or not they have all the rights to that know-how. So that's the risk situation.
If, on the other hand, it's a US portfolio company and they're seeing new competitors relocate to the US to avoid tariffs, there may be an opportunity to commercialize some of their domestic US IP by going and licensing those new-found competitors who really do need their IP rights to be successful.
But in the end, what we tell investors is: make sure you're communicating with your portfolio, reach out to the company, ask to speak to their chief intellectual property officer, or CIPO. If they don't have a CIPO, find out who on the board has the committee responsibility for overseeing their intangible assets, and most importantly, just make sure they're thinking about IP as an issue whenever they respond to tariffs, especially with a relocation proposition.
Dori: Really appreciate the insights here and for more you can always visit jsheld.com/insights.
Brian Gleason, CTP, is a Senior Managing Director at Phoenix Management, a part of J.S. Held. He joined the company in October of 2023 as part of J.S. Held's acquisition of Phoenix Management Services. As a Certified Turnaround Professional (CTP), Brian has managed or participated in excess of 250 turnaround engagements over the past 28 years using his executive, operational, financial, and negotiating skills. He has significant experience in interim management roles, including CRO, CEO, COO, and CFO of sponsor-backed, privately held, and publicly reporting entities. He has been a board member in many companies including private and public companies and is often engaged in these roles when there is significant disruption in the company, or at the board level. In certain circumstances, he represents capital providers directly to advise on operational and restructuring matters for their portfolio companies.
Brian can be reached at [email protected] or +1 610 659 8118.
John Peiserich is an Executive Vice President and Practice Lead in J.S. Held’s Environmental, Health & Safety practice. With over 30 years of experience, John provides consulting and expert services for heavy industry and law firms throughout the country with a focus on Oil & Gas, Energy, and Public Utilities, including serving as an expert witness in arbitration proceedings and in state and federal courts. He has extensive experience evaluating risk associated with potential and ongoing compliance obligations, developing strategies around those obligations, and working to implement a client-focused compliance strategy. He has appointments as an Independent Monitor through EPA’s Suspension and Debarment Program. John routinely supports clients in a forward-facing role for rulemaking and legislative issues involving energy, environmental, Oil & Gas, and related issues.
John can be reached at [email protected] or +1 504 360 8373.
James E. Malackowski is a Senior Managing Director of Ocean Tomo, a part of J.S. Held. Ocean Tomo provides Financial Expert, Management Consulting, and Advisory services related to intellectual property (IP) and other intangible assets; corporate accounting investigations; regulatory and reporting obligations; solvency and restructuring; and contractual or competition disputes. Practice offerings address economic damage calculations and testimony; accounting investigations and financial forensics; technology and intangible asset valuation; strategy and risk management consulting; mergers and acquisitions; debt and equity private placement; and IP brokerage. Subsidiaries of Ocean Tomo include Ocean Tomo Investments Group, LLC, a registered broker dealer. With more than 100 offices globally, J.S. Held assists clients – corporations, insurers, law firms, governments, and institutional investors – on complex technical, scientific, and financial matters across all assets and value at risk.
James can be reached at [email protected] or +1 312 327 4410.
Tom Burns is a Managing Director in J.S. Held’s Global Investigations practice, serving as head of the US Business Intelligence team. He has extensive experience leading intelligence collection assignments for financial institutions, law firms, and blue-chip multinationals around the world. Tom primarily supports his clients with discreet pre-transaction due diligence; asset tracing and fact-finding research related to global disputes and arbitration; investment and market entry strategy development; and competitive landscape analysis. He also consults for c-suite teams and other high net-worth individuals advising them on their exposure and threat profiles.
Tom can be reached [email protected] or +1 917 590 1568.
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