The year is almost over.  As such, now seem like a good time to review how financial employment did in 2018.

There are two charts here.  The first compares growth in financial employment with other major sectors.  The second compares growth in financial industry employment by president for the first almost 2 years in office.

Before looking, which industry would you guess won 2018?  Perhaps the financial industry?  What the health care sector, construction sector, or education sector?  Any of these sectors boom more than others in 2018?  Maybe the tech sector shows up on top?  Life has been good in the tech sector recently.

What about looking at how financial industry jobs have expanded by president?  Would you guess Trump has been good or bad for the finance sector?  Would you guess Trump beats Obama?

The looks follow.

Financial Industry vs. Other Sectors

First, here’s the look at growth in finance jobs vs. growth in other industries.  Surprised by top growing industry?  Natural Resources – mining, drilling, and the like – looks like it will end 2018 on top.  Through November, Natural Resources firms have added jobs at a 3.8% pace.

In second place is Construction at 3.4%.  Rounding out the top 5 are Professional & Business Services (2.6%), Manufacturing (2.0%), and Education & Health Services (1.9%).

The industry of interest – Finance – comes in middle of the pack at 1.3%.  Decent.  Definitely stronger than what we’ve seen in prior years, but nowhere near the boom and eventual bust of the volatile Natural Resources and Construction industries.

financialemploymnet

The Financial Industry by President

Next, here’s a look at growth in financial industry jobs by president.  Are you surprised?  On top of the list is President Truman.  During his first couple years in office, finance grew by a whopping 18.4%.  Almost unbelievable by today’s standards.

In second place is the Carter administration at 10.6%.  Eisenhower, Nixon, Johnson, and Roosevelt also show up on top of the list.

Shifting to presidents since the 1980s, the top modern president was Clinton at 3.7%.  Not bad.  President Trump comes in second at 2.68%.

Reagan at 2.1%, Bush II at 2.0%, Bush I at 1.3% round out the other 3 presidents with growth.

Obama shows upon the bottom of the list.  During his first two years in office, Obama saw financial industry employment decline by a massive 4.2%.

Overall, it wasn’t a good experience working in finance during Obama’s first 2 years in office.  The evidence so far for the Trump administration suggests that’s turning around in a healthy way.

financebypresident

Conclusion

In sum, the finance industry is doing fairly well in 2018.  Employment is looking up.  Part of that may stem simply from the business cycle and part may stem from more favorable policies of presidential administrations.  All in all, it’s still a good time to be working in finance.

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Private equity data provider Pitchbook recently released some interesting data on the top 11 private equity (PE) investors in the U.S. Midwest.  Which entities would you guess show up on top?

Would you guess the big entities – Canadian Pension Plan Investment Fund, AlpInvest Partners, Hamilton Lane, HarbourVest Partners, or Washington State Investment Board show up on the list?  (Here’s a list of other big investment companies)  Perhaps the private equity arm of Goldman Sachs shows up on the list?  Blackrock?

Take your guess now.  The results follow.

The Top 11 Private Equity Investors in the US Midwest?

What follows is Pitchbook’s accounting of the top 11 private equity investors in the Midwest.

Fascinatingly, on top of the list is AEA Investors.  AEA Investors is headquartered in New York, New York.  The firm mainly represents private investment vehicles for family offices with substantial assets.  AEA Investors operates by using leveraged buyouts and mezzanine and senior debt investing.  The firm covers a host of physical industries, including industrial products, specialty chemicals, and retail sectors.  It is the wide swath of sectors that probably places AEA Investors on top.  The Pitchbook list has 20 private equity investments in the US Midwest.

In second place is Apollo Global Management.  The New York, New York-based company was founded in 1990 and invests in a similar space as AEA Investors, with the addition of a stronger focus on credit and real estate investments.  Pitchbook’s accounting has Apollo Global Management having made 18 investments in the US Midwest.

Tied for third place are two relatively well-known investment firms – Blackstone and McCarthy Capital.  Blackstone is one of the largest private equity investment companies in the world, with 742 investment professionals and 1,284 investments.  McCarthy Capital is much smaller on a global scale, with 14 investment professionals and 78 overall investments.  Pitchbook has Blackstone and McCarthy Capital having made 16 investments each in the US Midwest.

Rounding out the top five is Capital for Business.  According to Pitchbook, Capital for Business has 6 investment professionals and has made 125 investments.  Of the 126 investments, 14 have been in the US Midwest.

The remaining members of the top 11 are TA Associates (13 investments), Clearview Capital (13 investments), Eagle Private Capital (13 investments), The Riverside Company (11 investments), Summit Partners (11 investments), and Silverhawk Capital Partners (11 investments).

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Conclusion

In an interesting review of the top private equity investors in the US Midwest, some surprising results show up.  Overall, Pitchbook’s list sums to 156 investments made by the top 11 private equity firms across the US Midwest.  Times are certainly good to be a private equity investor or an owner of a company that captures the attention of an interested private equity buyer.

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One of the most well-known data providers used by private equity professionals is Pitchbook.  They’re out with their take on the top 9 trends in US-based private equity activity right now.

Before looking at the list, which topics would you guess show up?  Take your guess now – the top 9 list follows.

#1: 2018 is on pace for a record

The first trend Pitchbook mentions is overall deal value.  With a flurry of $1 billion and above deals closed so far in 2018, the year is on pace to be a very good year for total deal value.  Interestingly, of the total deal value, a large chunk comes from just one deal – the $21 billion buyout of Dr Pepper Snapple Group by JAB Holding and BDT Capital Partners.

1 Source: Pitchbook

#2: 2018 may end up being the year of the buyout

One of the more intriguing Pitchbook observations is that deal add-ons as a percentage of total buyouts is on track to be the highest ever.  Should the Pitchbook data prove-out for the remainder of 2018, the percentage of total private equity buyouts that are add-ons may approach 70%.  Amazing.

2 Source: Pitchbook

#3: Business to Consumer and Energy Gets Outpaced by IT and Healthcare in 2018

This observation is probably completely unsurprising.  Should current trends continue through the end of 2018, deal counts for the IT and Healthcare sectors will outpace Business to Consumer and Energy.

3 Source: Pitchbook

#4: Smaller deals are losing favor

The fourth observation is that smaller deals – those with an aggregate value of $25 million or less – are making up a smaller percentage of total private equity activity in 2018 than any year since 2010.  This is interesting given the incredible strength of the small business sector over the past few years.  That growth has either not attracted private equity interest or has less interest in private equity.

4 Source: Pitchbook

#5: The number of exits are down, but exit value may reach 2017′s healthy figure

The fifth observation out of Pitchbook is that the number of exits is down in 2018, but exit value could potentially reach the healthy levels of 2017.  Overall, a very good, but not unsustainable year, for private equity exits.

5 Source: Pitchbook

#6: Financial services and energy look to be the darling in 2018

Pitchbook’s sixth observation is that initial public offerings (IPO) are more likely in financial services and energy in 2018.  This is somewhat unsurprising given the immense interest in fintech and the rise of clean energy.

6 Source: Pitchbook

#7: Median IPO size is down slightly in 2018

It’s been a relatively eventful year in the public markets, and that might be showing up in IPO sizes.  The most recent estimate has IPO size down slightly in 2018 compared to 2017, although still relatively healthy.

7 Source: Pitchbook

#8: Fundraising is down a lot

Perhaps the most surprising point in Pitchbook’s list is that fundraising is down significantly in 2018.  Private equity fundraising reached almost $224 billion in 2017.  As of now, 2018 fundraising has only garnered $121 billion.  Not pretty, but at least better than the doldrum days of 2009 through 2012.

8 Source: Pitchbook

#9: Bigger funds gain favor

The last observation from Pitchbook’s list is that investors shifted attention to mid-large funds in 2018.  Mid-large funds ($1 billion to $5 billion) have accounted for about half of all private equity fundraising in 2018 so far.

9 Source: Pitchbook

Conclusion

Overall, there’s a flurry of private equity activity going on right now.  Part of this is driven by historically low interest rates.  Another part is driven by a booming economy.  And others parts are driven by stronger expected returns from private equity funds relative to other financial vehicle managers.  All in all, it’s a good time to be working in private equity.

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A Look at Pitchbook’s 2018 Startup Graveyard

October 29, 2018

In an almost interesting fashion, Pitchbook, the private equity data provider, is out with a look at the 2018 startup graveyard.  The tally reviews companies that died in the year of 2018. Before looking at the list, which companies would you guess are on the list?  Does a certain blood-testing company come to mind?  Perhaps […]

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Looking at the Most Valuable Startups in Each State

October 15, 2018

Private equity data provider Pitchbook is out with a fascinating new look at the most valuable startups by U.S. state. Before looking at the results, take a guess.  Would you guess the most valuable startup is headquartered in Massachusetts, with its biotechnology-centered cluster?  What about California?  Silicon Valley certainly has some very valuable startups.  Perhaps […]

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Are the Heydays of Private Equity Over?

October 1, 2018

Private equity data provider Pitchbook is out with an interesting question – “Is declining fund performance a sign that PE’s good times are over?“. It’s a question worth asking whether you’re in the private equity sector, or whether you’re an investor seeking to maximize your returns. Before looking at the return data for private equity […]

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Where is Financial Employment Booming?

September 17, 2018

Every now and then we review how the financial sector is doing.  Before looking, which U.S. state would you guess is #1 for financial sector employment?  Would you guess New York – the home of Wall Street?  Perhaps Chicago (Illinois), with its heavy focus on insurance services?  What about California, with its heavy focus on […]

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Which Universities Produce the Most Venture Capital-Backed Companies?

September 3, 2018

Private equity data provider Pitchbook is out with their annual report on which universities produce the most venture capital (VC)-backed companies?  Before looking, which universities would you guess show up on the list? Would you guess Ivy League schools, with their highly ambitious, academically fresh graduates?  Perhaps you’d guess universities in places where the state […]

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Where and Who are the Top Private Debt Companies?

August 20, 2018

Private equity data collector Prequin is out with a fascinating look at the top 100 private debt companies.  Which companies would you guess show up on the list?  Where would you speculate the majority of private debt companies are headquartered?  Make your guesses now, because the answers follow. Where the Top 100 Private Debt Companies […]

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How is Financial Employment Doing Compared to Other Sectors?

August 6, 2018

The economy is booming.  Last week’s GDP figure – a measure of how large and strong an economy is – came in at $20.4 trillion.  This was the first time nominal GDP had come in above the $20 trillion mark.  On a year-over-year basis, GDP is growing at a 5.4% click.  Healthy, very healthy. Employment […]

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