Welcome to our January Broker-Dealer Newsletter and to 2024!
To all of our success!
A Last Word on 2023 and 2024 is Shaping up to be a Very Good Year
Stasis – A Period or State of Inactivity. (Webster’s Dictionary)
For better or for worse, “stasis” is the word that comes to mind when describing 2023 middle market deal activity.
And the statistics bear this out – with both VC investing and PE activity down more than 50% from their 2021 highs.
Encouragingly, closer to home there were more bright spots. Last year on the GTS platform both new mandates and transaction volume were up from 2022, and as of January 1 there are more mandates live (328 of them!) on the platform than ever before.
This large number of mandates points first to the awesome hard work and professionalism of our GTS platform bankers, but also to the inevitable fact that no matter how intensely we all pressed down on the deal accelerator, what we got back last year was just too many stuck deals.
But that was then and this is now.
And with a big 9 week public equity market rally to close out 2023 – driving the S&P up 26% for the year and the NASDAQ up 54% – if history is any guide then private equity M&A and financing upticks are likely to follow.
In this spirit, let me share three ideas to jumpstart the new deal year:
First, Let’s communicate this message of market optimism to the executives and technologists in our networks seeking growth capital to propel their businesses to the next level. The combination of these public market tailwinds and pent up PE demand (see below), now is the time to engage operators and capital providers in meaningful, action-focused investment dialogues.
Let’s connect with our PE, VC, and Family Office relationships as to their acquisition game plans for their various portfolio companies. I think we will be pleasantly surprised by their New Year, refreshed receptiveness to platform add-on plays and ideas, especially as we are able to connect them with under-the-radar M&A opportunities (for which as independent bankers we can be paid on either the buy or sellside).
Let’s explore Fund Marketing Opportunities. PE and VC funds have had a highly interesting past 4 years. 2020 and 2021 were characterized by a record amount of capital raised, and then, in 2022 and 2023 by…a whole lot of tire-kicking and not investing.
So what we have now is a renewed sense of urgency to put this record $2.59 trillion amount of investment dry powder either to work via investing it or…
…returning it to their long-waiting LPs in the form of actual investment return – ideally yes in the form of portfolio company exits but as that remains elusive then via alternatives including secondary sales to third party investors.
So whether its financings, M&A advisory, PE buyside work, secondaries, investment advisory, and more, the percentages in 2024 are for more in our favor than they have been in some time
And that is all us independent bankers really ask for, isn’t it?
Happy New Year to all, and let’s go!
Referrals. Do you know an investment banker looking for the benefits of independence and professionalism provided on the GT Securities platform? We are always interested in speaking to highly ethical and credentialed banking professionals to join our platform. Please reach out to me at [email protected]
Happy New Year to All!
