Investors are nervous about the events that are taking place around the world. The Chinese economic debacle is creating recessionary waves around the globe. According to some of the leading economists, the world could be facing another recession that will rival the 2008 meltdown. If that happens, hedge funds will take a serious hit to their bottom lines. Hedge fund managers are trying to prepare for an economic downturn in 2016 even though Madison Street Capital, the Chicago-based investment firm, recently released the 2015 hedge fund merger and acquisition report and it was a good one. According to an article published by PRNewswire.com, there was 42 successful M&A transaction in 2015. That beats the 2014 total of 32. Those 42 deals accounted for a 27 percent increase in volume over the dollar volume in 2014.
Charles Botchway, the Chief Executive Officer of Madison Street Capital, is as concerned about the global recession as any investment manager, but Botchway thinks his company will still have a successful 2016 in terms of completed mergers and acquisitions. The reason, according to Botchway, is Madison Street Capital’s ability to offer merger and acquisition clients all the tools they need to make an informed decision about the transaction. Madison Street offers clients portfolio valuation, financial analysis, inventory management information, capital input, and other tools, so companies have all the information they need to close the deal.
Madison Street Capital is not like other investment firms that go after the big fish in the corporate pond. Botchway and Chief Operating Officer Anthony Marsala like to work with companies that are considered medium-size or small-size companies. Marsala and Botchway also like to work with companies that understand the needs of both companies. Madison Street Capital’s merger and acquisition programs show companies how to achieve those needs the best possible way. That means finding financial as well as operating solutions.
But even though Madison Street Capital is going to have another great year, many investment firms are going to be faced with some challenges going forward. Botchway thinks many hedge funds will close in 2016, and that means less hedge fund mergers. Botchway also thinks the big hedge funds will face some radical government regulations that cut the amount of money investors can make. The loopholes that are in place that avoid taxes are going to be eliminated in 2017 and that will force hedge fund managers to make adjustments.
It’s not going to easy for investors or companies in 2017, according to Mr. Botchway. The investment industry is going to change because of regulations, and the recession is going to put a strain on hedge fund returns. But Madison Street Capital’s Charles Botchway is still optimistic about his company’s future.