“We know what to expect, what is going to be for the next couple years,” says Spencer Hoffman, an MD at Lovell Minnick Partners, at the Financial Services M&A Symposium.
Hoffman, who spoke Thursday on the panel, “Investing in the Financial Services Industry,” ticked off a list of negative factoids. Next year will likely bring higher taxes combined with a low growth economic environment, he said. The mutual fund industry has been producing five years of net outflows. And, people are getting older and need retirement assets. “No matter what your income you need to be self sufficient,” he says.
Hoffman, despite these issues, says he’s “somewhat optimistic.” There are a “large swath” of middle market firms that will do well, he says. “There is lots of opportunity out there,” he says.
Still, the only thing worse than being a financial services investor, Hoffman says, “is being a private equity investor in financial services.” UPDATE: Hoffman says his quote referred to the negative portrayal of private equity and financial services put forth by the media recently.
Bankers, earlier in the day, discussed the lack of financial services M&A. Deals are expected to remain muted next year, except for some sectors like asset management. “Private equity likes those businesses,” Halle Benett, UBS’ head of FIG and global head of specialty finance, told peHUB on the sidelines of the event. “It’s one of the areas we may see activity because it’s less regulated.”
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