Global M&A, lending falls off a cliff after logging record years, as investment banks prepare for the new normal with slimmed-down teams.
Hi. I'm Aaron Weinman. Today will be my final dispatch as the author of 10 Things on Wall Street. I'm absolutely gutted to be leaving, but after nearly 11 years abroad, I've decided to head back to Australia. But you're in good hands — my Insider colleagues will be leading the newsletter from here.
Alas, the show must go on. With a new quarter about to start, the numbers from the third quarter looked pretty bleak.
Global M&A deal values reached about $2.7 trillion for the first nine months of 2022, down 34% for the same period last year, according to data from Refinitiv.
Cross-border M&A was down nearly 40% for the first three quarters, while private-equity-backed buyouts dipped roughly 26%, the data showed.
The slump in deals has led banks to trim workforces and reduce their expenses.
Let's do this one last time.
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1. Deal values, and volumes, slumped for the first nine months of the year. Persistently high inflation, economic uncertainty, and increased borrowing costs have made it tougher for companies to stomach debt, and many have held off from moving ahead with mergers and acquisitions.
Globally, the number of M&A deals fell to 39,250 from January through September, down 18% from 48,045 in 2021, Refinitiv data showed.
Cross-border deals reached 11,753 for the first nine months of 2022, down 12% from last year's 13,385 transactions. And in private-equity land, sponsor-backed buyouts fell 27% to 8,348 from 11,503, the data showed.
Debt capital markets also turned bearish last quarter, and lending took a hit, according to Maria Dikeos, the head of global loan contributions for Refinitiv.
US syndicated loan volumes hit $1.8 trillion for the first three quarters, down 15% year-over-year.
Companies are tightening their purse strings in a bid to ride out the market volatility. Industries from big tech to Wall Street have conducted rounds of job cuts to trim their expenses, and shore up their balance sheets ahead of potentially more choppy economic conditions.
To be sure, global M&A is still ahead of 2020's first three quarters — roughly $2.17 trillion worth of deals were completed during that time — and only slightly behind the $2.8 trillion in deals that were completed during the first nine months of 2019.
While the slowdown is notable, it's important to remember that 2021 was a record year for M&A, capital-markets dealmaking, and private equity, which is still sitting on trillions of dollars of unused capital.
In other news:
2. Credit Suisse sought to calm worries about its financial strength. CEO Ulrich Körner said Friday that the bank has a "strong capital base and liquidity position," Bloomberg reported, but that statement failed to quell speculation about the health of the bank. Hedge fund manager Boaz Weinstein tweeted Saturday that the chatter on Twitter "feels like a concerted effort at scaremongering." The Financial Times Alphaville tried to filter out the noise surrounding the Swiss bank. Amid the concerns, Credit Suisse shares fell nearly 8% in early trading Monday.
3. Hedge fund stars, other former colleagues, and relatives of Julian Robertson gathered in a Manhattan chuch Friday morning to remember the billionaire Tiger Management founder who died in August at age 90. Insider attended the memorial service.
4. Elon Musk vs. Twitter: Text logs show Reid Hoffman, Jack Dorsey, and Joe Rogan texting the billionaire about Twitter. Here are all the juiciest private texts between Musk and his wealthy friends discussing plans for the social-media platform. The bevy of messages also make clear that, at least at one point, Musk was serious about buying Twitter.
5. Hedge funds are on the hunt for talent in Florida. Two recruiters have described the rush, the roles they're trying to fill, and the challenges that even the big firms face.
6. JPMorgan plans to hire about 2,000 engineers worldwide through the end of this year, Reuters reported. The bank added more than 5,000 software developers and data scientists last year and aims to attract more at a time when tech giants have slowed hiring.
7. UBS's U-turn on acquiring WealthFront followed pressure from shareholders and US regulators, reported SonntagsZeitung of Switzerland, citing unidentified bank sources, according to Reuters. The Swiss bank and US robo-advisor announced in September that they had agreed to terminate the $1.4 billion deal.
8. A member of the Safra banking family is trying to stop private lenders from taking over Spring Mountain Vineyard, a large Napa Valley vintner of award-winning cabernet sauvignon wines.
9. Biotech firm Prime Medicine is gearing up for a $200 million initial public offering. We dug through the company's 282-page filing to find five key points about Prime's plan to commercialize gene editing.
10. Blackstone used to target places where people worked and shopped before buying people's homes. Here is how one country took on the world's biggest commercial landlord, in this deep dive from the Guardian.
- Investment manager Clear Sky Advisors has hired John Holl as president of North American carbon and president of environmental trading. He joined from ACT Commodities. Clear Sky focuses on sustainable investment strategies.
- Private-credit firm Brightwood Capital Advisors has appointed Kristan O'Connor as a managing director in the firm's portfolio management and risk group. Before joining Brightwood, O'Connor was a senior vice president and credit risk executive at Bank Leumi.
- Shane Akeroyd has joined Digital Asset's executive team as a president. He will focus on developing customer relationships and new business. He joined from IHS Markit.
Curated by Aaron Weinman in New York. Tips? Email email@example.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.
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