The recent ACG Conference in Atlanta was very well attended with over 120 exhibitors. Based on what we learned at this conference, and what we are seeing in the landscape, there are three key trends emerging for private equity firms in 2019:
- DRY POWDER – One of the most positive outlooks from the ACG conference, in addition to what we are consistently seeing in the space, is the robust market for M&A for 2019 and well into 2020. There is a lot of “dry powder” in the market that needs to be put to work with a sense of urgency. Many funds are wrapping up fundraising, fueling their search to find platforms, acquire tuck-ins and become creative in how to combine assets, especially as the bigger options have been taken off the market by larger funds. Firms are leveraging vertical experience to creatively combine companies in this competitive market.
- BANDWIDTH– Team members of middle market PE firms have to wear many hats. They must raise funds, proactively source and execute deals all while working to deliver returns to investors. As a result, many firms are in need of resources to support in target sourcing, transaction execution, integration or all three. There was a lot of positive reception to our CATALYST offering that augments internal M&A teams through a proactive strategy to source, execute and integrate growth through acquisition.
- FAMILY OFFICES– Some new funds in the market are part of family offices with founder-friendly terms and longer-term outlooks. They are also deploying their own capital so deals are easier to execute with fewer layers of approval. These emerging family offices are giving way to a new urgency for PE firms to execute transactions.
In the current M&A market, competition for the best acquisition targets is fierce, and to win deals, PE firms need more than just a strategy. They need holistic and proactive approaches with a sense of urgency to get over the finish line. It is an opportune time for firms to seek outside support, and CATALYST for Corporate Development is well suited to add bandwidth to put their “dry powder” to work.
We look forward to even more insights at the ACG InterGrowth Conference in Orlando this May.