Posts Tagged ‘investing’
Trends from the Money Men
23 Jun 2009
by Andy Schultz
Last week I attended a conference on Private Capital that reflected the optimism, pessimism and opportunity at the leading edge of our economy.
The meeting was a series of presentations, interviews and panel discussions on topics for the private equity industry and among the 230 attendees were private equity and venture capital firms, plus large banks and law firms specializing in deals-making.
On the optimistic side of the ledger, the current marketplace is teeming with investment opportunities. Those with free cash to spend can pick and choose among companies for sale at bargain rates; “distressed” assets of real property whose values are under water; and troubled divisions of major firms being cut loose from the balance sheet as “desperation carve-outs.” The problem is, few have the necessary cash to act, and the banks either aren’t lending or can’t lend because they are tied up in fiscal knots of their own devising on the prior lending fiascos that got us into this mess.
The few deals that are going forward feature “creative” financing, where the sellers become the bank and help the buyers, who with other investors are putting their own debt-free “skin in the game.” It’s a different world and we may never go back to the go-go days lately past.
Another arguably positive trend is that things are not-bad-to-downright-good for so-called Second World economies, led by China, India, Russia and Brazil. These non-Western economies are still growing at a rapid pace and there was a strong difference of opinion over whether China or India was the place to make a big bet.
Another key trend is that the debate over climate change is over, at least in an investment sense. The question of whether we are suffering from man-made warming or not has been overrun by the politics of energy independence and economic growth. These top gun investors believe in the potential of “clean tech,” “sustainable materials,” “alternative energy” and anything “green” as real and substantial growth opportunities.
The biggest take-away from the meeting– a keen desire and openness among these very sharp and accomplished businesspeople to re-engage each other and the world toward the task of revitalizing the economy.
