Market Liquidity – Large capital resources available once Fed stops hiking interest rates: We have seen internal surveys done by large wealth advisors which show that cash balances/equivalents are approx. 40% of portfolio allocations which compares with approx. 40% equity allocations and 20% other (including fixed income). This capital is sitting on the sidelines waiting for the Fed to signal rate hikes are over before it will be put to work.
Capital Provider Interest – We have demand for complex Private Credit Opportunities that provide a Capital Provider yield between 12 and 15+%. The demand includes asset backed as well as receivable backed transactions.
Venture Capital – Valuations remain uncertain, but demand exists for “risk reduced” sectors. Most Venture Capital Providers are reserving capital to help existing investments weather the storms but firms with 5 million+ revenues withing certain sectors such as Cybersecurity, Climate Change and Energy Security are seeing interest.
US Economy – Growing consensus from Capital Providers on Q1 Rates/GDP Outlook: As per our Insights from last month where we stated that we were seeing growing consensus for Q1 to be a “soft landing”, the Wall Street Journal is now writing that “Investors Grow More Confident Fed will Pull Off a Soft Landing”1 in Q1 2023.
1 https://www.wsj.com/articles/investors-grow-more-confident-fed-will-pull-off-a-soft-landing-11670704543
Contact Us:
Deer Isle Group
info@deerislegroup.com
———–
Founded in 2007, Deer Isle is an innovative investment bank that equips capital market participants with the tools they need for transparent, seamless, and efficient capital markets transaction success.
Since our inception, we have facilitated over $5 billion in capital transactions through Deer Isle Capital, LLC—our FINRA-registered broker-dealer—for companies and funds across various security types, sectors, and geographies.
At the core of our approach are effective, unbundled capital solutions, offering expertise and guidance that can be customized to meet each client’s unique needs. Our services, available on an "as-needed" basis, include:
- Strategic Capital ConsultingTM (“Outsourced Strategic CFO services, Deer Isle Executive Management/Board Bootcamp or Sprint”) to prepare for a capital or M&A transaction leveraging the Deer Isle proprietary AI enhanced 4 pillar capital framework and real-world experience.
- Beacon (“Proprietary Technology”) offers White-label and Turnkey Capital Provider engagementwith customized content and data analyticsfrom a relevant subset from a universe of 17,000+ institutional (fiduciary) capital markets organizations/50,000+ institutional capital market people.
- Closing Advisory/Guidance (including “Shepherding”) expertise, through Deer Isle Capital, for structuring, negotiating, and completing a successful capital/M&A transaction.
