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Week in Review: French Free Fall, IPOs, and Uncertain PE

With the fiscal cliff temporarily stayed, media attention has mostly turned back to the major mainstays of recent months: the European crisis, a lackluster IPO market, and an underwhelming year for private equity.

On the European front, some fear that the situation may worsen as France’s economy becomes burdened with further debt and economic upheaval. On the other hand, IPOs are expected to recover in 2013 — mostly thanks to the ACA — suggesting that the Facebook fallout is finally dwindling. Private equity, caught somewhere in the middle, still stands on somewhat uncertain terms after a meek 2012.

Last Week on Axial
1,054 Pursuits by Members on active Opportunities
135 new Members joined the Axial Network
143 new Opportunities were brought to market 

The Euro Crisis No One is Talking About: France is in Free Fall: The French economy may be headed for trouble. Despite its current position as a leading economy in the Eurozone, signs — like increasing national spending, falling exports, and deteriorating competitiveness — suggest that France may soon be mired with debt. Unless serious changes are implemented by the Hollande administration, France may join the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) as a threat to a stable Eurozone.

Year of Failed Deals for Private Equity: Independent of Europe, 2012 was a challenging year for private equity. On top of the media onslaught fueled by Romney’s candidacy, there were few good deals to speak of. Despite rumors of privatizing Advance Auto Parts, Coinstar, and others — in this last quarter alone — few of these big deals were completed. With financing easily available, was the Romney-related media to blame for the inactivity? Or was it something else — like underwhelming opportunities?

After a Tough Year for IPOs, Bankers Expect Active 2013: Like the take-private market, the IPO market was lackluster in 2012. Many bankers expect 2013 to be marginally better, with a 6% uptick in IPO activity. This increased activity would create $34 billion in total IPOs. Despite the general threats from tax hikes and uncertain economic outlook, the impact of the Affordable Care Act is expected to have major implications for the healthcare, technology, and biotechnology industries. Additionally, energy and real estate are expected to contribute to some of the growth.

Entrepreneurship: A Working Definition: Although ‘entrepreneurship’ is a term commonly used in investment vernacular, it’s exact meaning tends to vary from person-to-person. According to HBS Professor Howard Stevenson, “entrepreneurship is the pursuit of opportunity beyond resources controlled.” This definition, albeit a bit abstract, works to remove entrepreneurs from a specific industry, and instead places the emphasis on a certain mindset. Having this alternative vision of entrepreneurship might enable investors to find value in innovative, yet non-traditional entrepreneurs.

In other news, Axial is hosting two Webinars this week:

The ABCs of SBICs: Small Business Investment Companies (SBICs) are a unique type of investment partner; they are designed to put a combination of private and public capital to work. But how exactly are they structured? What types of investment opportunities do they target? Are there restrictions on the types of companies they can invest in? Join Axial Member Joe Burkhart, Managing Director at Saratoga Investment Corp., as he presents the ins and outs of the SBIC program. 

Introducing Contacts: We’ve introduced new functionality that makes it easier to send Opportunities to your personal network— Contacts. On January 15th, please join Axial’s Colin Cunningham as he showcases the power of this new functionality. 

Thanks to jmayrault for the photo. 

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