|Capital Provider Inquiry: Family Office interested to invest into $5 to $10 million EBITDA companies with good governance and focus on cash flow. Growth is not a primary requirement. Rather, strong consistent cash flow is the primary interest. The investment thesis is to buy cash flow at reasonable multiples.
Capital Sourcing/Fundraising: Capital Provider feedback indicates a significant pullback in private market capital deployment due to public market valuation changes. While Capital Providers are still investing, the standards are higher, and preparation is key.
· Deals: Valuation metrics are being repriced, resulting in a mismatch between Capital Seeker and Capital Provider expectations. This environment has heightened competition for capital due to slowing deal allocations.
· Funds: With public markets down in value, private assets represent a larger allocation in portfolios making private funds an overallocated asset class and therefore making it more competitive to garner assets.
Interest Rates: There is growing consensus expectation that the Treasury yield curve will invert, possible later this year, which would signal that rate increases are over. Expectation is that GDP growth would begin to increase after the short-end rallies.
Shipping: The proliferation of mega-cargo ships at the expense of historical standard cargo ship sizes has put stress on the limited number of ports able to accommodate the larger ships, adding to supply chain imbalances and pressures since the limited number of ports which can accept these have had operational bottlenecks. It seems more shipping companies are going back to using historical sized ships meaning bottleneck should decrease as more ports become useful.
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Deer Isle Group
Founded in 2007, Deer Isle Group empowers Capital Seekers with the right tools to ensure transparent, smooth, and efficient capital sourcing. Since our founding, we have successfully transacted over $5 billion in capital for companies and funds in a wide variety of security types, sectors, and geographies. Deer Isle provides innovative unbundled capital sourcing capabilities, expertise, and guidance that are customizable depending upon capital seeker requirements. These include a proprietary technology that offers Capital Seekers “direct issuance” capabilities to curated set of potential Capital Providers from a universe of 10,000+ institutional capital sources and “as needed” strategic capital consulting to prepare for a capital raise/M&A, as well as closing expertise/guidance for completing a successful capital raise/M&A.