With the New Year, I would like to first offer some thoughts as to lessons learned from 2021 and then on to the deal and regulatory environment for 2022.
2021 was a year of contrasts. On the one hand, capital markets performed very well, with the S&P up 27% for the year.
And more excitedly for our sector of the market, 2021 shattered records for private equity, with over $990 billion in overall deal volume, almost double that of 2020. deal volume of $470 billion (Dealogic).
Discouragingly on the other hand, the seeming inability to put the global Pandemic behind us continues to frustrate and bedevil us all. The hope for sure is that this year it will mercifully and finally come to an end.
Then there was the evolving regulatory environment.
The change of administration in Washington has trickled down through the regulatory agencies, with the signal so far being a more adversarial and stricter rules interpretation enforcement approach.
As such, for better or worse, all of us must redouble our efforts and protocols to stay in full compliance with all applicable SEC, FINRA, and State level rules and regs.
2021 was also the year that the “virtual world of work” went from a temporary response to the Pandemic to being just how business is now done.
And while for sure it has its challenges, for independent, boutique investment bankers like us it has become a better and more profitable way to do business in two fundamental ways.
First, in competition for deals and mandates it has leveled the playing field between the independent banker and larger, more branded competitors.
In this regard, in my daily conversations with a wide range of industry participants – bankers, investors, regulators, securities attorneys, auditors, et al. – the repeated theme I have heard is an increasing lack of emphasis on traditional credentials and banking “brands,” and far more focus as to what is in the “heads, hearts and souls” of the professionals on the other side of that Zoom call.
The second change is how virtualization has enabled large financial transactions and deals to be completed at a distance (both domestically and internationally) and at a speed like never before.
This virtual “comfort” developed in stages, from the ‘wait and see” mindset of the early Pandemic (March – July 2020), then a “dip the toe in the water” approach in the 2nd half of 2020, where dealmakers the world over saw the strong performance of the financial markets in spite of the global shutdown and gave virtual dealmaking and closing a “try.”
By the start of 2021, there was a realization that very many aspects of traditional deal-making – book development, promotion, initial and detailed diligence, and especially closing – could be done just as effectively without the need for as many in-person meetings and travel as was traditionally done.
In addition to contributing in 2021 to the record private equity activity for the industry as a whole, I am happy to report that it also translated into record levels of deal activity and completed transactions on the GT Securities platform, represented by 225 client mandates and 71 closed transactions with an aggregate deal value of greater than $850 million!
A major salute and kudos to the super integrity, super competent investment professionals on our platform for these amazing results! I am proud and honored to know and work with you all, and am very confident that 2022 will be a great year for us all.
Let’s do this!
To all of our success,
GT Securities, Inc.