Welcome to our November Firm Update.
In this edition, I will share thoughts as to the election results and its impact on our deal business. Then we will provide platform updates.
To all of our success!
The Election and Our Deal Business
Well, that’s that. The very tense and intense US election cycle is now blessedly behind us.
As time passes, its true implications – good and bad – will naturally come into sharper focus.
For the immediate aftermath, the strong view here is that for us independent investment bankers and our deal business, its outcome is a strong positive, because:
1. The Waiting is Over! High on the list of the most unpleasant aspects of our business is the waiting. Waiting for documents from prospects and clients. Waiting for diligence to conclude. Waiting for the attorneys, always waiting for the attorneys! And in the last few months, waiting for the results from this election and its market impacts.
So the clear and decisive nature of the Republican victory and the quick and gracious acceptance of it by the Democrats is a BIG sigh of relief that we can now all just get on with it.
GT Securities’ platform metrics as to ratios of client mandates to deal closings show a lot of stuck deals these last few months, and the view here is that both these and new mandates will move through the closing pipeline with refreshed urgency (they already are).
2. Taxes. With the new administration along with Republican control of both houses of Congress it is a virtual certainty that provisions of the 2017 tax cuts will either be made permanent or not repealed, including:
- The reduction in the federal corporate tax rate from 35% to 21%
- 100% expensing of capital investments
- The 20% business income deduction for pass-through entities – very important for S-corps and “owner-operator” LLCs as many of both our affiliates and clients are
- The increase in the estate tax exemption to $11.2 million.
Much more important in the short term is the removal of tax uncertainty – allowing business buyers and sellers to plot and plan acquisitions and exits with greater financial predictability.
3. A More Deal Friendly FTC. The new administration almost for sure will have a more pro M&A stance, especially from the Federal Trade Commission (FTC).
As I noted in August, the current FTC has been one of the most M&A adverse in history. They have challenged and slowed deals not just in their traditional “Big Tech” and “Big Pharma” lanes, but even in markets like affordable handbags and worryingly started reviewing even smaller deals not traditionally under their purview.
While there are cross-currents in the modern Republican party as to M&A, it seems impossible that the new administration could be more anti-deal than the current one, if for no other reason then…
4. The “Art of the Deal” Candidate Won. Everyone has their opinion about Trump. What is unambiguous is that both as to persona and life experience he was clearly the more pro dealmaking candidate. Heck he made his original fame in the 1980s writing a best-selling book, titled “The Art of the Deal.” When the top guy has this mindset and perspective, it is going to trickle down.
We both shall see and as independent investment bankers of course our fate lies far less in the “macro” than in the blessed “micro” of our own efforts and attitudes.
But…good deal markets and sentiment help. A lot. The strong view here is we got those now.
Platform Resources
Research. As a GT Securities affiliate, you have complimentary access to various research platforms, including Family Offices Database, IBISWorld, and Hoovers & Statista, among others.
Additionally, analyst and associate-level research and deal execution support is provided through Evalueserve.
If you have any questions regarding how to access these databases and services, please refer to the GTS Resources Overview.
Collaboration. In addition to the organic networking and deal referring that naturally takes place every day on the GTS platform, a reminder here as to our simplified protocol to directly explore deal collaboration on the platform via:
- Completing our deal collaboration form at this link.
- Receiving compliance approval
- The deal collaboration opportunity is then automatically forwarded via email to all bankers on the platform who have requested to see the collaboration deal flow.
- All are then encouraged to directly connect with each other to discuss and explore
Referrals. Do you know an investment banker looking for the benefits of independence and professionalism provided on the GT Securities platform?
Schedule a call with us today to learn more!
Happy November to all!
