Macroeconomic conditions, cross-border geopolitical conflict and a list of other factors have caused a cloudy outlook for the market’s future. For many professionals, 2022 is in the rearview mirror and they aren’t looking back, but will 2023 be a step up for dealmaking? To get a picture, Mergers & Acquisitions asked some of the industry’s top professionals to share their insights on what to expect in 2023.
“I expect the economy to take additional steps back during the first half of 2023,” says Dwayne Hyzak, CEO of Main Street Capital. “However, I do believe that the U.S. economy will continue to be resilient and will significantly outperform the rest of the global economy. Once the Fed starts slowing its interest rate activities and eventually reverses some of its actions, the economy should see significant improvement beginning in the third quarter and continuing in the fourth quarter and 2024.”
While Hyzak believes that uncertainty will continue, ultimately it appears that the U.S. economy will outperform the rest of the globe. Similarly, Brian Forman of Morrison Cohen, believes that global macro factors and low buying power could result in depressed consumer spending and poor equities performance. However, Forman notes that depressed prices always yield opportunity and that as some factors resolve themselves, there will be an appetite to raise and deploy capital.
In looking at 2023 deal flow, Randy Schwimmer, co-head of senior lending, Churchill Asset Management sees a dip followed by a bounce back, “In parallel to economic conditions we expect deal flow will slow through mid-year, then begin to build up momentum through the second half,” he says. “Overall we think total volume will be slightly down from 2022, but positioned for another strong year in 2024.”
Similarly, regarding fundraising, professionals are seeing a slow pace remaining for 2023 but once the public market bottoms out, M&A activity will gradually resume. Fraser Janse van Rensburg, managing partner at Asante Capital, believes that there will be greater liquidity for LPS and a lower number of GPs in the market as a result of saved funds. He expects fundraising will recover towards the end of 2023 and into 2024.
–Cole Lipsky
