Day Three Part Two from the Milken Institute Global Conference
May 9, 2024
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Guests from top financial firms discuss liquid credit markets, real estate investments in Africa, potential recession risks, upward mobility in the US, and M&A trends, exploring regulatory impacts on deal-making.
Strategics drive M&A for growth amid economic challenges and tech advancements.
Forced selling is rare, but many private companies seek strategic exits or IPOs.
PE firms to redeploy assets cautiously post-lull in IPOs; valuation challenges remain.
Deep dives
M&A Market Trends and Growth
The M&A market is experiencing growth with higher troughs and peaks. Strategics are driving the market as companies seek external growth opportunities to enhance returns amidst economic challenges and technological advancements. The strategic value, synergies, and cash flows in deals are more significant than just premiums.
Forced Selling and Troubled Companies
Amidst a strong market, companies facing challenges like overleverage or operational disruptions may resort to forced selling or seek merger solutions. However, there is no widespread forced selling expected, but there may be thousands of privately held companies searching for strategic exits or IPO opportunities.
Private Equity Dynamics and Future Transactions
Private equity firms holding assets are expected to bring them to market following a temporary lull in IPOs. However, valuation challenges remain as assets were acquired at higher multiples. The market may see slow redeployment of private equity capital with a focus on a patient approach.
Opportunities in Different Sectors
The M&A activity is widespread across sectors with strategic buyers leading the market growth. Valuations are high due to liquidity and current economic challenges, driving deals for growth and transformation. Companies are exploring various sectors for opportunities in a strategic-led M&A environment.
Regulatory Impact on M&A Transactions
Regulatory scrutiny has increased timelines and costs for M&A deals, impacting how transactions are structured and closed. Competitive authorities globally are reviewing transactions, extending the closure process and influencing deal sizes due to higher entry prices. The regulatory environment is a crucial factor affecting M&A activity.
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Television and Radio broadcast live from the Milken Institute Global Conference featuring Armen Panossian, Co-CEO at Oaktree Capital Management, Runa Alam, Co-Founding Partner and CEO at Development Partners International, Al Rabil, CEO at Kayne Anderson, Raj Chetty, Harvard University Professor of Public Economics and Andrew Bednar, CEO at Perella Weinberg. Hosts: Carol Massar and Romaine Bostick. Producer: Paul Brennan.