Investment banking firm, Highland Capital perception of merger and acquisition (M&A) performance is founded on partially political decisions by the U.S. President and the Republican Senate and House. The firm is also basing its observation on a report released by Thomson Reuters LPC, which stated bankers and investors are expecting M&A activities to rise, in 2017. The end of Fourth Quarter 2016, private equity buyout lending nearly doubled, from 2015, after President Trump was elected into office last year. Many investors and bankers are expecting the Federal Government to focus on economic growth by changing from monetary policy to fiscal policy.
Mark Okada, Chief Investment Officer of Highland Capital said to Reuters that monetary to fiscal policy is a powerful way capital is allocated and earned. Fiscal policy is beneficial to risk assets and continues to increase demand for leveraged loans. In 2016, the demand increased among investors purchasing floating-rate loans to hedge against hikes in interest rates. Mr. Okada says it’s going to be bullish for risk assets, which will take a lengthy time to materialize. There was a shortage of supply in the leverage loan market in the United States at the end of last year.
Thomas Reuters reported leverage merger & acquisition decreased to S270.4 billion from $331 billion in 2015. By December 7th, 2016 weekending, loan funds reached its highest, since August 2013, totaling $1.8 billion. Bankers and investors are expecting merger and acquisition activities to increase in 2017 as the Republican Administration introduces fiscal stimulus and tax reform policies to boost the economy in the U.S.
Mark Okada and James Dondero are co-founders of Highland Capital Management and focus on hedge funds, distressed investment funds, and structured investments. Highland is headquartered in Dallas, Texas and has office locations in NYC, Singapore, and England. As of the end of 2016, the firm manages approximately $18 billion in assets. Mr. Dondero, CEO & President of Highland and Mr. Okada formed a partnership in 1990.
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