Madison Street Capital released a report detailing the state of the Mergers and Acquisitions market in 2016. In the report, Madison Street explained the increase in the mergers and acquisitions market in 2015, then detailed some of the reasons for the expected increase in 2016.
This report, which can be found at pr.com, by Madison Street Capital stated that hedge funds announced and or closed 42 deals in 2015. That is up from the 32 reported 2014. The volume of transactions also reportedly climbed by 27 percent over the same period of time. The upward climb in activity in the final quarter of 2015, combined with other issues, caused an upward momentum in deal making. The report shows that 2016 could be record setting time for M and A activity by hedge funds. https://network.axial.net/a/company/madison-street-capital/
Hedge funds holdings are at their peak, even with most hedge funds had a lackluster showing in 2015. Despite the lackluster performance of the hedge funds, many institutional investors are increasingly investing in M and A deals. http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=116516616
Institutional investors are investing in the M and A sector hoping to get the higher returns needed to cover the cost of their growing liabilities. Simultaneously, small hedge fund managers are meeting with increasing difficulty attracting the new investment capital needed, thus many portfolios are operating below their optimal levels. Hedge funds are dealing with ever increasing pressure, compelling them to lower fees. At the same time they face a rise in the cost of operations. These factors have resulted in hedge fund managers seeking alternative strategies to increase revenue.
Senior Managing Director of Madison Street Capital Karl D’Cunha believes the environment for the hedge fund industry which showed strength in 2015 will be even stronger in 2016. Many different types of structures are being employed to accommodate both buyers and sellers. Along with traditional M and A, deals are being structured as incubator deals, revenue share stakes, PE stakes or PE bolt on arrangements. The industry is consolidating and the consolidation will continue especially where the opportunity for a partnership that provides a link between the distribution and product offering is available.
Madison Street Capital was founded in 2005, is a leading middle market investment banking firm with offices around the world with offices in Asia, Africa and North America. Madison Street provides a wide variety of financial services such as business valuation, corporate advisory, financial opinions and valuation for financial reporting purposes.
Madison Street provides advisory services for merger and acquisition for their clients including determining the value of the company. Determining the value of the company is an important first step in any merger or acquisition can move forward because it gives a clear idea of the companies current and future value.