Middle Market Insights
Welcome! Our blog is dedicated to providing information we think you’ll find useful, thought provoking, compelling and in some cases just entertaining.
Hopefully, you will find our views insightful and relevant though at times they are likely to be irreverent, quirky or merely interesting but always informative.
Thank you for visiting, please visit us regularly.
The long unwinding road
01.25.2012 - Money Matters
It has often been said that history repeats itself. Indeed it does. Most people have forgotten about the Savings and Loan crisis of the late 1980′s. Although it pales in comparison in many ways it was a precursor to the 2008 financial crisis.
Despite the perilous economic times there is much to be thankful for
11.25.2011 - Money Matters
Lately it seems that a day doesn’t pass without the media bemoaning the lack of progress in resolving the Eurozone’s sovereign debt crisis, the failure of the congressional super-committee to reach agreement on deficit reduction, severely diminished liquidity in the European banking system, a palpable slowdown in the emerging economies of the world and the auction of German bonds that was not fully subscribed. All of which contributes to a crisis of confidence which could potentially tip us into a recession.
However, as bleak as the outlook may be, there is cause for optimism. Entrepreneurship is alive and well throughout the world and ultimately it will lead us out of this darkness by creating new companies that will create jobs. Perhaps if it were not for the headwinds cited above it might even be flourishing.
Eurozone’s economic outlook in dire straits
10.16.2011 - Money Matters
The financial crisis embroiling the Eurozone is now well into its second year. In May of 2010 its political leaders temporarily managed “to kick the can down the road” with the establishment of the European Financial Stability Fund (EFSF) of 440 billion Euros. The fund’s purpose was to provide financial assistance to member countries facing economic difficulty.
The August downgrade ofU.S.debt by Standard & Poor’s, after the debacle over raising the nation’s debt ceiling, set the stage for a crisis of confidence in the financial markets. With no clear resolution in sight to the Eurozone’s sovereign debt crisis there was grave concern regarding the viability of its banks – the ingredients for the perfect storm.
IPO market disarray dims private equity outlook
09.17.2011 - Private Equity
For the first six months of 2011, the IPO market looked to be a bright and shining beacon for private equity firms. Exits via IPO offerings by private equity portfolio companies continued their upward trend. Exits via the M&A market also continued to improve although well below the heady days of 2006 and 2007.
Using mezzanine debt to fund growth
09.06.2011 - Capital Markets
Mezzanine debt can be an excellent source of capital for middle market companies to fund acquisitions, develop new products and expand production facilities or pursue other growth opportunities. In recent years mezzanine debt has provided a source of liquidity for company owners who did not want to sell their company in the less than robust M&A market of recent years. Dividend recapitalizations have provided business owners with a means to take money out of the business and diversify their assets.
Las Palmas, not your typical Mexican taqueria
09.02.2011 - Banquet Of Life
Las Palmas serves some of the best Mexican food in theNapaValley. The restaurant is owned and operated by Juan Lopez and his wife Maria who are both natives ofMexico. You will find Juan hard at work behind the hot stoves of an open kitchen and always with a big smile on his face. Juan genuinely loves what he does, and it shows. Maria, who does a bit of everything, makes the tamales and chicken mole from family recipes.
Much ado about a downgrade
08.26.2011 - Capital Markets
On August 5, 2011, Standard & Poor’s (S&P) lowered theUnited States long-term sovereign credit rating from AAA to AA+. This led to a massive worldwide sell-off of equities the following week and the subsequent market turmoil that continues.
The long and treacherous road ahead
08.21.2011 - Money Matters
The Bureau of Economic Analysis recently confirmed what most of us in the trenches have known for some time – the economic recovery was barely that. GDP growth for the first quarter of 2011 was revised down sharply from 1.9% to a paltry 0.4%. Its initial estimate for GDP growth in the second quarter was a whopping 1.3%, the lowest quarterly growth rate since the recovery began in 2009.
Asset based loans maximize borrowing capacity
08.07.2011 - Capital Markets
An asset based loan, or ABL in the parlance of its practitioners, is a loan secured by the assets of a company and includes accounts receivable, inventory and often machinery and equipment. Since the financial crisis of 2008 ABL’s have seen remarkable growth among middle market companies that have had difficulty meeting the increased underwriting standards instituted by commercial banks.
Private equity’s roller coaster ride
07.30.2011 - Private Equity
Since early in the first quarter of 2011 it has been our view that the spike in activity during the fourth quarter of 2010 was not a return to better days but a result of expectations that the Bush tax cuts would be allowed to expire. The Private Equity Breakdown report issued by PitchBook earlier this month lends credence to our theory as it reflects a marked decline in activity compared to the fourth quarter of 2010.