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Week in Review: QE3, Housing, and IPOs

News this week seemed to focus on the Fed’s QE3 program. While most agree that the rise in interest rates is near, the effects are up for debate. Some believe that this round of increases will help spur bank profits, while some are concerned that bonds will become unsafe. Other’s don’t see it impacting private equity investments much at all.

In other news, Wall Street is driving the housing recovery, Gleacher shuts down its investment banking division, and first Chinese IPO in US of 2013 does well.

Private Equity Bracing for Higher Rates: Will tightening lending environments slow M&A activity? Larry Fink and John Eydenberg don’t think so. Since rates are so low now, even a rise of a few basis points would leave them comfortably below average.

Unlock Value Through Real Estate Within the M&A Process: Even if the housing market recovery is uncertain, there are still ways to capitalize on real estate value in a given transaction. Glen Kunofsky explains ways to use owned real estate to help finance an acquisition, generate growth capital, increase EBITDA levels, or create long term stability.

Jamie Dimon’s $5 Billion Bet Against Bonds: If the idea of rising interest rates alarms you, you’re in good company — just not in the company of bank CEOs. Many bank CEOs are eyeing the rise in interest rates as a likely money-maker — despite what happened back in 1994.

Behind the Rise in House Prices, Wall Street Buyers: Although home prices are on the rise, the trend might not be as positive as it seems. Since a notable portion of the buyers are institutional investors, many fear the trend is temporary and unstable. Could even spell trouble for the job market.

First Chinese IPO of 2013 Delivers Decent Pop: While most eyes are on the anticipated Alibaba IPO, LightInTheBox — a Chinese online retailer — went public on NYSE this week. As the first Chinese company to go public in the US this year, the jump in first day trading was a positive sign. If the Alibaba IPO goes right, is a resurrection of the IPO market possible?

Did you hear?

Member Spotlight:

Penford Corporation (Nasdaq:PENX) is a recognized leader in modified specialty starches with a broad base of established customer markets. The company, which joined Axial in August 2012, focuses on providing customers with specialty starches and starch based formulations that are unique to each customer’s business needs.

Penford is primarily focused on investments in the food ingredient space that fit into health and wellness trends and that leverage their expertise in food coating systems, texture modification, moisture control, production of gluten-free formulations or pet chews and treats. Additionally, Penford is looking to grow their current renewable based products platform to include new specialty chemicals and performance polymers.

Click here to connect with Penford Corporation or any of the other 12,000+ Axial Members.


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