Half of Middle-Market Dealmakers See No Impact From Trump on Private Equity Fundraising

ACG New York survey shows most expect private-equity investments will outpace hedge-fund and venture-capital investments in 2H.

Middle-market dealmakers have toned down their expectations about the impact of the Trump administration, according to a survey from the Association for Corporate Growth (ACG) New York. At the end of 2016, 79% of respondents to the ACG New York survey anticipated that the incoming president would have a positive impact on private equity’s ability to raise capital. In the current midyear survey, only 37% believe the same, with another 52% expecting no impact resulting from the Trump administration.

Deal-making activity in the middle market will get stronger in the second half of 2017, compared to the first half, according to 47% of respondents. However, another 45% expect the middle-market mergers and acquisitions pace to remain constant in the second half of the year.

“This year’s mid-year ACG New York member survey comes at a particularly interesting time for the middle market; we are crossing the halfway point of the first year of a new presidential administration and the economy is holding steady with the Dow well above 20,000 and the unemployment rate at one of its lowest levels,” said David Hellier, president, ACG New York. He added, “ACG members have consistently demonstrated the ability to provide useful insights into the future of the middle-market M&A environment.”

The 105 respondents are also positive about the state of the economy, with 36% seeing it as stronger than expected this year, and another 61% believing that economic performance will meet their high expectations. Also noteworthy is that 75% expect that returns on private-equity investments will outperform returns on hedge-fund investments and venture-capital investments in the second half of the year.

The Ohio State University’s National Center for the Middle Market defines the US middle market as those businesses with revenues in the range of $10 million to $1 billion, which includes about 200,000 firms. They account for one-third of total private employment in the country, with 44.5 million jobs, and contribute more than $10 trillion in combined revenues annually to the economy.

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