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Dealmaking Thrives in Midwest

Last updated: Watercooler

Chicago accounts for nearly half of Fifth Street’s revenue, says CEO Leonard Tannenbaum

Chicago is very active in dealmaking, says Leonard Tannenbaum (pictured), CEO of Fifth Street Finance Corp. (Nasdaq: FSC), at the 2013 Midwest ACG Capital Connection at McCormick Place in Chicago.

"Although we've expanded our business, Chicago continues to account for 45 percent of our revenue, which is impressive," Tannenbaum tells Mergers & Acquisitions.

Much of Fifth Street's business is driven by handful of well-known middle-market private equity firms that are headquartered in Chicago: Baird Capital, Beecken Petty O'Keefe & Co., Chicago Growth Partners, GTCR, Sterling Partners and Thoma Bravo.

Chicago is also active in the lower middle market, reports Thomas Turmell, managing director of TMT Capital Partners LLC, a fundless sponsor and advisory firm located in Chicago.

"The challenge this year has been deal flow," says Turmell, who is president of ACG Chicago.

Looking ahead to 2014, Turmell is "cautiously optimistic." One sign that he says bodes well for the Chicago area is the rise of "in-sourcing."

As interest in U.S. manufacturing increases, the Midwest in general and Chicago in particular are well-positioned with a solid infrastructure for manufacturing, says Turmell.

The local M&A trends are also reflected in the fact that attendance at ACG Chicago is up in 2013. About 1,150 people were in attendance. Speakers included: Richard Daley, who served as Mayor of Chicago from 1989 to 2011 and who now serves as counsel at Chicago law firm Katten Muchin Rosenman LLP; and former Chicago Blackhawks Reginald John Kerr, Cliff Koroll and Grant Michael Mulvey.