With dealmaking being sporadic and inconsistent in 2022 and capital allocations seemingly harder to come by, firms have struggled to consistently source deals as larger investment banks have shifted their concerns away from the middle market. As a result, firms like Atlas Merchant Capital are looking for investments that can solve this issue and bring some more dealmaking options back to this part of the market.
Atlas, a global investment firm, has made a strategic growth equity investment in Cascadia Capital, an independent middle-market investment bank. The investment will extend Cascadia’s geographic, product, industry and sponsor coverage growth across the U.S., while expanding the firm’s investment banking team.
“Our investment in Cascadia reflects our thesis that larger M&A advisors and investment banks have underserved middle-market companies,” Bob Diamond, founding partner and CEO of Atlas who was previously CEO at Barclays, tells Mergers & Acquisitions. “We believe that Cascadia is uniquely positioned to be the franchise to attack this opportunity and generate strong growth in the coming years.”
The larger Wall Street banks have become less entrepreneurial, and less versatile while trending more towards a rigid and more standard commodity model. Along with a wave of consolidation including deals like TD’s purchase of Cowen and B. Riley’s acquisition of FocalPoint Securities, there has been a new need for Cascadia’s flexible independence and middle-market focus as an investment bank.
As most independent M&A advisors of scale have been acquired by the larger commercial and corporate banks, Cascadia’s independent nature, entrepreneurial culture and nimbleness paired with its concentration on the middle market, has created an opportunity to thrive in the investment banking world, adds Diamond.
Cascadia intends to build out its investment banking team and focus on growing its presence in the healthcare, technology and industrial sectors to enhance its subsector specialty expertise.
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