Private Equity

Frontrunning: April 18

  • Britain's May seeks snap election to boost Brexit hand (Reuters)
  • Trump to seek changes in visa program to encourage hiring Americans (Reuters)
  • Trump appointee Gorsuch energetic in first U.S. high court arguments (Reuters)
  • Pence Reaffirms U.S.-Japan Alliance Amid North Korea Provocations (WSJ)
  • Blackwater Founder Erik Prince Said to Have Advised Trump Team (BBG)

Median LBO Multiple Rises To 10.8x, Highest Since The Financial Crisis

According to a new report by PitchBook, after reaching new highs in 2016, acquisition multiples inched even higher in the first quarter of this year, and as a result the median EV/EBITDA multiple hit 10.8x in 1Q 2017, up from 10.7x last year. That was the highest median multiple paid since the financial crisis.

Financialization & The Erosion Of Growth

"As fees go up by half-a-percent, we reach into the client’s balance sheet, snatch the half-a-percent, and turn it into income; it’s almost magic - capital into income... but we lower the savings rate of our clients (savings and investment rate) by half-a-percent as our fees go up, so we get short term GDP kick from our income, at the expense of lower long-term growth on the part of the system."

This Economy Is Ruined For Many Americans

In the dazzling glitter and excitement of soaring asset prices that central banks around the world, and particularly the Fed, have tried so hard to engineer, it’s easy to forget that not everyone has those assets, that a lot of people can’t get “rich” just sitting on inflated assets, that they have to work long hours in measly jobs just to stay one paycheck ahead of hunger and homelessness.

Will The Oil Price Slide Lead To A Credit Crunch For U.S. Drillers?

The recent drop in oil prices, which has almost wiped out the price gains since OPEC announced its supply-cut deal, is coming just ahead of the spring season when banks are reassessing the credit lines they are extending to support drillers’ growth plans.

Howard Marks Redux: "There They Go Again" - Why Stock Investors Develop Amnesia

"Contributing to... euphoria... is the extreme brevity of the financial memory... There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present."

Passive Aggressive Pigs Get Slaughtered

"Most of the money supporting ETF asset growth is coming from investors ignorant (or willfully ignorant) of risk. As with active investing, ETFs provide mostly long exposure. Unlike active investing, the higher cap-weighted indexes move beyond sustainable value, the more likely ETFs will disappoint investors."

Frontrunning: March 21

  • Gorsuch Strives to Present Himself as Above Political Fray (WSJ)
  • Investigation Could Hurt Trump’s Clout in Congress (WSJ)
  • U.S. to Ban Laptops and Tablets in Cabins of Some Mideast Flights (BBG)
  • Tillerson no-show at NATO renews European disquiet about Trump (Reuters)
  • Don’t Blame Your Social Media Feed for the Growing Political Divide (BBG)
  • High-Frequency Traders Fall on Hard Times (WSJ)

Credit Suisse "Climbs The Wall Of Worry", Raises S&P Target To 2,500 From 2,350

"Following the reaching of our mid-year S&P 500 target, we raise both our mid-year and year-end S&P targets to 2,400 and 2,500, respectively (from 2,350 and 2,300). We continue to see a clear-cut risk that we get an overshoot to the upside in equities that then reverses later on; more realistically, this reversal is likely to be a very late-2017 or 2018 event." - Credit Suisse

Frontrunning: March 16

  • Fed's 'dovish hike' sends shares to record highs, dollar dips (Reuters); Markets Rally After Fed Rate Increase Decision (BBG)
  • Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy (BBG)
  • Europe Gets Reprieve in Dutch Election, But the Center Fragments (BBG); Relief in EU capitals as Dutch PM sees off far-right's Wilders (Reuters)
  • Trump's first budget: military wins; environment, aid lose (Reuters)
  • Trump Says He Based Charge of Obama Wiretapping on Media Reports (BBG)