Operating at the Intersection of Technology and the Capital Markets
Tag: Private Equity
I am in favor of increased transparency for private funds, especially as it pertains to the Private Equity industry and its highly suspect IRR calculations which inflate fund returns. As you would imagine, the Private Equity industry is lobbying this effort. My guess is that this ruling will get watered down as the Private Equity … Continue reading More Transparency for Private Funds
Seems obvious, but now would be a good time for those that are flush with cash to step into the breach as commercial banks tighten. Traditional Asset Managers, Private Equity firms, Venture Capital firms and cash-rich Corporates are all in a position to lend to the mid-market as banks pull back. Credit spreads are widening … Continue reading Good Time To Be A Non-Bank Lender
All banks have got to be tightening access to credit despite the Fed's bail out and despite the SNB's bail out. What group does tightening credit hurt most? Private Equity firms. During the COVID trough we kept hearing how Private Equity firms would not feel the pain as they had access to approximately $1 Trillion … Continue reading Private Equity & A Fed Pivot
Given higher interest rates some Private Equity deals have been executed with 100% equity. This means Private Equity firms will become more valuation sensitive in order to generate higher returns. In months and years past PE firms would use minimal equity (subscription loans were popular), when executing transactions. Minimizing the equity component would goose PE … Continue reading Further Downward Pressure On Equities
The Fed has created more zombie companies than any zombie apocalypse. The late great George Romero has nothing on the Fed. We are praying, crossing fingers and toes that the Fed will end QE and not support Government-led corporate bailouts with its money printing ability. Wishful thinking? Maybe. However, if nobody pushes back on the … Continue reading Allow Zombie Companies To Fail & Sanity To Return To The Markets
SSNC shares are flat from August 2018 to August 2022. By year-end 2022, SS&C will have grown Adjusted EBITDA by more than 60% from year-end 2018 - no small feat (table below) - yet SSNC shares do not reflect this achievement. S&P Global (ticker: SPGI), FIS Inc. (ticker: FIS) and Fiserv (ticker: FISV), will need … Continue reading Now May Be The Time for SSNC To Sell Itself
The Justice Department's Antitrust chief Jonathan Kanter is misguided in his comments about the Private Equity industry. Mr. Kanter ought to look to the Federal Reserve for perverting markets through its actions over the past decade-plus, especially during the April 2020-March 2022 period. If Mr. Kanter wishes to place blame somewhere place it at the … Continue reading The Fed Is To Blame, Not Private Equity
CEOs and Institutional Investors should not count on strategic acquirers or PE firms to bail out underperforming stocks (or private company holdings for that matter). Not only is the cost of capital significantly higher for would-be acquirers, but target company revenue and profitability forecasts have substantially less visibility and therefore more risk today than they … Continue reading Don’t Count On M&A To Bail You Out
PE firm Thoma Bravo is set to acquire Anaplan (tkr: PLAN) for $10.7 billion. That valuation implies an 18x Enterprise Value to Revenue (EV/Revenue) multiple on trailing revenue of $592 million. To us 18x revenue is a rich valuation in this environment where interest rates are climbing and recession is around the corner. Even if … Continue reading More Irrational Exuberance: Thoma Bravo to Acquire Anaplan for $10.7 Billion
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