Commentary

M&A Outlook for 2023 (Part Three)

As it turns out, there’s no better lens through which to examine the effects of the current economic environment than US middle market M&A activity. As we heard last week from five top investment bankers, a wide range of indicators – including volume, valuations, financing and sector rotation – flashed across the market in the…

M&A Outlook for 2023 (Part Two)

Any attempt to predict what the future investing climate will be is bound to be an iffy proposition. This point was driven home to us as we reviewed past candidates for Lead Left Quotes of the Week that didn’t make the cut for one reason or another. For instance, back in May 2021 one CIO…

M&A Outlook for 2023 (Part One)

The beauty of good vacations, aside from their restorative powers, is the opportunity to reflect on the big picture. On the work front, that meant we moved beyond 2022 rates and recessions to a thoughtful consideration of what comes next. Part of that appraisal is how dealmakers will find ways, as they always do, to…

The Alternative Pipeline

We noted last week the state of play with the Fed’s battle to slay the inflation dragon without also cratering the entire village. The prospect of increasing spreads on top of a five percent-plus benchmark rate has dampened enthusiasm for M&A and financings. Nevertheless we find private equity sponsors in the traditional middle market space…

Soft Landings, Hard Choices

This week the Federal Reserve raised interest rates by 50 bps at its December meeting, following four consecutive increases of 75 bps. That brings 2022’s number of hikes to seven. The Fed funds rate target now stands at 4.25% – 4.50%. It had begun the year at zero. Critics worried the Fed took too long…

Private Credit – Why Now? (Last of a Series)

A veteran of leveraged lending and astute Lead Left reader disagreed with our statement last week that private credit terms have never been more investor-friendly. In a note to the editor he compared them to more conservative loan structures and legal protections in the 1990’s. Since then, he pointed out, private equity owners and their…

Private Credit – Why Now? (Third of a Series)

The clock is ticking on interest rate hikes. Who will win the fight on inflation: the Fed with a soft landing or a recession with a hard one? The answer could either push buyers deeper into illiquid credit or reinforce indecision. But private credit has never been a timing game. Opportunistic, distressed and liquid credit are influenced…

Private Credit – Why Now? (Second of a Series)

Last Tuesday the winner of the largest Powerball jackpot winner in history – $2.04 billion – was announced (but not yet identified) by the California Lottery. A gas station in Altadena, just north of Pasadena, sold the ticket (10-33-41-47-56). The lucky recipient can elect a lump sum of $1 billion or be paid in installments…

Private Credit – Why Now? (First of a Series)

In recent weeks we’ve devoted considerable space to how the Fed’s Great Unwind and rate hikes have impacted the economy, capital markets, and private credit. We’ve also examined the backdrop for growth (or recession). Our economist friends have helped sift data to guide investors on where US and global economies are headed. Finally, we’ve analyzed…

Of Rates and Recessions (Last of a Series)

We conclude our unpacking of the rich content delivered by our three top economists in last month’s exclusive webinar [link] by looking at global policies. The Fed is way ahead of the other central banks in its quantitative tightening and rate hike program. The ECB is “dithering” and the BOE not well organized. Japan continues…