Although an exciting week here at Axial (officially announcing our 1 millionth Member to Member connection and a rebrand!), it was relatively quiet on the front lines of M&A. Probably the most intriguing story is the return of Romney to private equity, by way of Tagg’s Solamere Capital.
In other news, 8% hurdle rates could be threatening the stability of private equity, the new Federal Account Tax Compliance Act may be a headache for some firms, and the Q4 Market Pulse Survey learned that the retirement of baby boomers is helping to drive deal activity in the lower-middle market.
Q4 Market Pulse Survey: More Boomers are Looking to Sell their Businesses: According to a recent survey, retirement among baby boomers is one of the driving factors in business sales. The report also offers interesting insights into deal terminations, valuation multiples, and buyer types.
Mitt Romney Returns to Private Equity: After being trumped by Obama, Romney is returning to private equity as the executive committee chairman of Solamere Capital, Tagg Romney’s firm. Ironically, the firm is not commenting on the hire, apparently in an effort to avoid the “politics” of it.
Why Having Lots of Bankers is Dangerous For Any Economy: Quartz has recently been host to a debate on the benefit (or harm) of a large finance sector. While some say bankers can help improve the world by charitable donations, others believe that the number of bankers outsizes the available capital, and endangers growth.
Private Equity’s “Potential Crisis’: According to some senior PE execs, the current hurdle rates may be too high. The current 8% bar may cause junior level professionals to seek out new opportunities closer to the carry and potentially pose a risk to the stability of the industry,.
Private Equity in the Lower Middle Market: In this short video, Kirk Griswold of Argosy Capital explains his thoughts on the 2012 deal market and his future predictions of 2013. He makes special mention of the booming energy industry and of rising valuations.
New Headache for Private Equity, Hedge Fund Firms: Forget cap gains and carried interest — the Federal Account Tax Compliance Act may be the next big headache for private equiteers. The new law will require financial institutions to “identify Americans who have investments in non-U.S. financial accounts or entities.”
AxialMarket Becomes Axial: We would be remiss not to include the big news coming out of Axial HQ this week. Yesterday, we announced some major milestones: 1 million Member to Member connections, 10,000+ Members, and a rebrand. You can read the press release here.
Thanks to Gage Skidmore for the photo.