Leading deal and relationship management technology provider finds capital markets firms are looking past the crisis as they gear up for post-pandemic deal flow and increased competition
Jersey City, N.J.— June 15, 2020 – A new survey of private capital dealmakers reveals a significant shift of focus, with the vast majority of respondents saying efforts to mitigate the economic effects of COVID-19 and guide portfolio companies through the rebound will take a back seat to finding new platform deals and add-on acquisitions in the second half of 2020. Conducted by DealCloud, a leading provider of deal, relationship, and firm management solutions for capital markets firms, the poll also found that two thirds of dealmakers surveyed believe a lack of attractive businesses to buy will present the biggest challenge for the rest of the year.
DealCloud’s Dealmaker Pulse Spring 2020 Survey polled more than 100 dealmakers to gain key insights into how capital markets firms are dealing with the effects of the global pandemic and thinking about opportunities for the second half of the year.
“It’s clear that private capital investors and advisors have overwhelmingly moved past portfolio concerns and switched their focus to identifying new deals,” said Ben Harrison, co-founder and president of DealCloud, an Intapp company. “The results also show dealmakers believe technology is the single most important driver of success in an increasingly competitive environment.”
The survey yielded the following key findings:
- Only 31% of respondents say their firm’s primary focus will be on portfolio company operations during the next six months.
- Only 14% of surveyed investors view mitigating the effects of COVID-19 as a primary focus for their firm.
- 83% of respondents said portfolio company management teams’ ability to guide companies through the pandemic and recession is not a major concern.
- A majority of surveyed investors (52%) said they are primarily focused on acquiring new companies or finding add-on/bolt-on opportunities in the next six months.
- 65% of respondents said their deal teams are concerned that a lack of attractive businesses to buy will be their firm’s largest challenge during the next six months.
- 80% of respondents said technology has allowed their firm to stay on par with or beat their competitors during the past six months.
- 31% of respondents said superior technology enabled them to beat their competition during the past six months.
“We expected to see more firms solely focused on keeping portfolio companies afloat amid this wave of uncertainty, but the data suggests that, even at the height of the outbreak, dealmakers were looking toward the future,” said Harrison. “As we cautiously return to work and a more normal business environment, the data also suggests that capital market professionals can expect a busy second half of 2020. As financing becomes more available, dealmakers will be met with increased competition as firms look to deploy record amounts of dry powder with add-ons, roll-ups, carve-outs and bolt-on deals. That competition is already forcing firms to evaluate their operations to maximize dealmaker efficiency, productivity, and data analysis.”
The online survey was conducted via DealCloud’s integrated marketing solution, Dispatch, during the height of the COVID-19 crisis, from April 20th to May 5th, 2020.
DealCloud will host a series of audience-focused webinars in the coming days provide more detail on the results of the DealCloud Dealmaker Pulse Spring 2020 Survey:
- The Pulse for Private Equity Firms and Fund Managers
Tuesday, June 16, 10 a.m. ET
- The Pulse for Investment Bankers and Advisory Firms
Wednesday, June 17, 12 p.m. ET
- The Pulse for Credit Firms and Leveraged Finance Professionals
Thursday, June 18, 12 p.m. ET
To see the full results of the DealCloud Dealmaker Pulse Spring 2020 Survey, please visit dealcloud.com/pulse.
DealCloud, an Intapp company, provides a single-source deal, relationship, and firm management platform to enable more than 800 clients to power their dealmaking process from strategy to origination to execution. We offer fully configurable solutions purpose-built for the complex relationships and structures of private equity and growth capital firms, investment banks, private and publicly traded companies, debt capital providers, and other investors. For more information, visit dealcloud.com.