Multi-billion dollar mergers and acquisitions (M&A) often make headline news in the financial section of newspapers, but even the amount of M&A activity between mid-sized enterprises can be a definitive sign indicating the health of the economy. The strength of the stock market is often a motivating factor during bursts of M&A activity. Madison Street Capital (MSC) has released its fourth edition of the hedge fund industry M&A overview and has noted particularly that while only thirty-two hedge fund deals were closed in 2014, that number rose to forty-two in 2015. In a HedgeWeek.com article, Karl D’Cunha, MSC’s Senior Managing Director, speculated on key drivers that will continue to create momentum in 2016.
• A wave of transactions during 2015’s fourth quarter may be positioning 2016 as a record year for hedge fund m&A transactions. Transaction volume was up twenty-seven percent according to AUM (Assets Under Management)
• Despite mediocre 2015 hedge fund strategy performances, industry assets are at an all time high. 2016 will see more non-traditional M&A transactions such as incubator deals, PE stakes, and revenue share stakes.
• Institutional investors seeking higher returns are looking to alternate assest management sectors to offset higher operational costs and pressure to lower fees.
• Although the hedge fund industry is highly fragmented at the present time, 2016 will offer more opportunity for consolidation in the form of opportunistic partnerships that will bridge the product offering distribution.
Madison Street Capital is a privately held international middle market investment banking firm, located in Chicago, IL. As a corporate finance and merger & acquisitions (M&A) advisory firm, the company has built upon a team of exceptional professionals that combine experience and extensive relationships which have made MSC one of the worlds premiere investment banking firms. With offices in North America, Africa and Asia the firm offers a wide variety of additional financial services including corporate restructuring, buy side and sell side PE services and business valuation and financial reporting services.
With a current in-house deal count of over one hundred exclusive contracts, their strategy of analyzing each clients unique needs to select the best match between buyer and seller along with arranging the appropriate financing and creating a capitalization structure that optimizes the clients potential has set the firm apart as unparalleled leaders in the industry. Their client profile includes companies with revenue ranging from $10 million to $500 million annually, in industry sectors from aviation, IT, real estate, energy, consumer goods and more.
As a commitment to building strong businesses in communities, MSC has partnered with United Way to make a difference in local and global communities by helping families become economically independent and to assist communities to overcome financial instability.
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