Top executives from investment banking, private equity, and the corporate world addressed key issues in mergers and acquisitions, corporate finance, and related areas.
the levels of leverage today are uncomfortably high but the people doing it wrong, because there is a chance that in two years’ years they’ve done exactly the right thing.
It feels uncomfortable in the same way that 2000 felt uncomfortable but we can’t say what’s going to happen. We tend to get very upset when we find that the people (at investment banks) we are paying enormous amounts of fees to then turn up on the other side of the table competing with us. In talking to investors in the Middle East they do have liquidity and are looking to invest, but they are being very selective.
It is hard to beat the market over the long term by simply trying to buy low and sell high. What you need is a clear idea of what you want to do with a business.
History will tell whether private equity has improved these companies (in which it has invested).
Credit spreads have tightened enormously, they’re at a very low level and cannot tighten. If we see a risk it is in this area, and the (companies doing) refinancings will be the very first ones who will be hurt by that (an interest rate up-tick).
Hedge funds are vocal, they keep people on their toes and introduce Anglo-Saxon shareholder thinking into corporate Europe, but they don’t go around looking for companies to put into play.
A regulatory environment that is uncertain will always stifle mergers and acquisitions activity, but water tends to move around barriers. We believe the market will move around (regulatory uncertainty) in a constructive way that allows deals to happen.
We don’t think this is about high oil prices or high gold prices, we are seeing a shift in the institutional investment community from nothing in terms of asset allocation in commodities to 5 percent, 10 percent or 15 percent. It is a real shift and a sustainable shift.
The world is in a benign situation as far as risk (is concerned). We have never seen liquidity this robust.