Dealmakers polled in mid-November expect M&A to expand significantly in the financial services, insurance, and real estate (FIRE) sector over the coming year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP), a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives published in partnership with McGladrey LLP.
The 12-month score of 87.2 for FIRE was nearly 17.5 points higher than the comparable score for overall M&A. It was also the highest 12-month score of the six fast-growth industries measured by the MMP – ahead of health care; technology, media and telecommunications; manufacuring; consumer goods and retail; and energy. Short-term expectations for the sector were also high. The three-month composite score of 79.3 for FIRE beat the overall market score of 71.0 but was lower than the three-month score of 84.1 for health care.
Posted in Corporate Finance, Economy, emerging market, Equity Markets, Events, Finance
Tagged Economy, equity, Finance Market, Financial Services, Global Economy, Golden Networking, Industry, M&A, mergers and acquisitions, Modern Finance Report, Private Equity
Private-Equity Payout Debt Surges
Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace, as fears mount that the window for these deals will close if interest rates rise.
So far this year, $47.4 billion of new loans and bonds have been sold by companies to pay dividends to the private-equity firms that own them, according to data provider S&P Capital IQ LCD. That is 62% more than the same period last year, which wound up being the biggest year on record, with $64.2 billion sold to fund private-equity payouts.
Buyout firms acquire companies with a combination of cash and debt, which the acquired companies aim to pay back with earnings. In dividend deals, private-equity-owned companies add more debt so they can pay dividends to their owners. Ultimately, the payouts are distributed to the buyout firms’ own investors, which include endowments, pension funds, wealthy families and the firms’ executives.
Posted in Breaking news, Events, Finance, Private Equity, U.S. Debt
Tagged $47.4 billion, $64.2 billion, Business, Company, Financial Services, Private Equity, Private equity firm, Venture Capital
Private-Equity Investors Take Profits on Bank Stakes
A handful of private-equity investors who poured money into banks during the financial crisis are cashing out, reaping billions of dollars in profits—in some cases doubling their money—even as many small lenders continue to struggle.
Their success stands in contrast to dozens of other big investors who scooped up failed institutions but are still stuck with far less profitable holdings.
The different outcomes show that, during banking crises, the lowest price doesn’t necessarily make for the best deal. The investors who do better “are the ones who bought good franchises cheap, not distressed franchises very cheap,” said Joshua Siegel, managing principal and chief executive of StoneCastle Partners LLC, a New York firm formed in 2003 to invest in banks.
Private investors pumped billions of dollars into more than 60 financial institutions from 2008 to 2012, according to data provider Dealogic. Those figures account only for deals for which public data are available. Many bank deals during the period were private and details weren’t disclosed.
Posted in Equity Markets, Finance, Opinion, Private Equity
Tagged Business, Dealogic, Financial Services, funds, Investor, New York, Private Equity, Private equity firm
Europe Starved of Later Stage Venture Capital
European tech companies are being starved of later-stage venture capital when compared to their U.S. counterparts, with fewer than one in three to four securing funding after a seed round, according to a leading venture capitalist.
Simon Cook, CEO of London venture-capital firm DFJ Esprit LLP, also said that the U.K.’s dominance as the European center for venture capital was slipping. According to Mr. Cook, somewhere between 500 to 1,000 companies a year get funding deals in Europe of under $5 million.
In the U.S. the comparable figure is 750-1,000. “This figure has been roughly static for about a decade,” he said. But when it came to funding the company’s growth stage, while roughly the same number of companies are founded in Europe as the U.S., in Europe only about 200 companies land deals of greater than $5 million; in the U.S. “that is closer to 1,000,” he said. “As I look at these figures — and I have done for a decade now — the good news is that Europe is not shrinking. The bad news is we are not catching up with the Americans in any way, shape or form yet.”
Posted in Finance, Opinion, Venture Capita;, Venture Capital
Tagged Business, Europe, Financial Services, Funding, London, Seed money, Simon Cook, United States, Venture Capital
Why 99.95% Of Entrepreneurs Should Stop Wasting Time Seeking Venture Capital
It is difficult to pick up a major business publication today without reading about venture capitalists (VCs, defined as professionally-managed VC limited partnerships that invest in early-stage ventures), about their skills in finding great investment opportunities, and about the ventures they fund. And lately in states like Minnesota, it is also about how they can create jobs if the governor would speak favorably about the need for VC and offer some state pension money for them to invest. And since we all like to talk about our successes, the stories are about how entrepreneurs secured VC and soared to wealth in a very short time via an IPO or a strategic sale. This can lead other entrepreneurs to think that this is the only model for success, that there is no other way to build a major company, and that they should write business plans, attend VC conferences, seek VC, and give VCs control of their venture.
Posted in Finance, Opinion, Research, Venture Capita;, Venture Capital
Tagged Business, Entrepreneur, Financial Services, Initial public offering, investment, Minnesota, Venture Capital, Victoria Cross
DEALTALK-Regulators put chill on U.S. private-equity insurance deals
(Reuters) – With acquisitions in the U.S. financial services industry slowing to a crawl since the 2008-09 financial crisis, private equity funds have provided a rare bright spot with their pursuit of annuity portfolios that insurers have been eager to sell.
But the dealmaking may have hit a roadblock now that New York’s top financial regulator has decided to launch a review, concerned that the private equity firms are taking on too much risk – at the expense of consumers who hold the annuities.
As a consequence, some insurers are putting on hold plans to sell their businesses, while bankers and attorneys who are working on two deals nearing completion are worried that the probe could derail them completely.
Posted in Breaking news, Equity Markets, Events, Finance, Private Equity, Regulation
Tagged finance, Financial Services, insurance, New York, Private Equity, Private equity firm, Private equity fund, regulation, Reuters
Velocity Venture Capital, NVCA, and Kauffman Kick off the 4th Year of the Entrepreneurs Showcase
SACRAMENTO, Calif.–(BUSINESS WIRE)–In collaboration with the National Venture Capital Association and the Kauffman Fellows Program, Velocity Venture Capital announced today the kick off of its fourth annual Entrepreneurs Showcase to identify and support new technology companies in the Sacramento / Northern California region. The Showcase consists of a variety of events that will take place between now and December designed to Ignite, Accelerate and Capitalize the most promising tech startups in the region — and to build a sustainable entrepreneurial ecosystem of investors, entrepreneurs and educators.
Posted in Events, Finance, Venture Capita;, Venture Capital
Tagged Business, Calif, Entrepreneur, Financial Services, Kauffman Fellows Program, National Venture Capital Association, Velocity Venture Capital, Venture Capital