Commentary on Current Deal Environment

The 2022 macro environment is off to a challenging start, with multiple whammies of record high inflation (7.5% most since 1980), poor public market performance (NASDAQ down 15%) and most concerning a major political and humanitarian crisis in the Ukraine.

Luckily and contrastingly, the M&A and private equity financing markets have held up well.

Over $740 billion of M&A deals were announced during the first two months of 2022, close to an all-time record and a comparable amount to Jan-Feb 2021 (ValueWalk).?

As for venture capital and private equity, bullish sentiment remains strong, with more than 75% of venture capital and private equity firms raising capital in 2021, and 80% planning to raise more cash this year.

And the money is being invested:? venture capital? funding in February was up 6% over January, and a whopping 149% when compared to February 2021 (AlleyWatch).?

Perhaps more surprisingly, in spite of all of the bad news out there, at $42 billion January 2022 global private equity investment had its third strongest start to the year since 1980 (albeit down from a record 2021 start)?

So for sure a solid “banker talking point” is that no matter how negative public market sentiment and geopolitical conditions might get, the private company investment sector remains a very good place to be and now more than ever could be considered comparably less risky than more exposed asset classes.?

What do you think? Take our Banker Confidence Survey and we will share results here.