Upswing in M&A activity expected in second half 2020

As the effects of the ongoing COVID-19 pandemic continue to unfold, mergers and acquisitions (M&A) deals have endured despite market volatility.

David Hodes, a founder and co-managing partner at Hodes Weill, told IREI in a recent video interview that he expects M&A activity to ramp up, rather than slow down, during the second half of 2020. Hodes expects the impact of COVID-19 on these markets to present themselves in a number of ways.

One momentum driver is the expectation that more managers will be looking for embedded equity in their platforms that can attract outside investors. In the search for the most efficient form of equity, managers may sell businesses on a minority basis, sell a stake in the company or undertake a full-on sale of the platform to a larger global institution. In particular, Hodes has observed a notable expansion in the market for investors who like to buy minority stakes in high-quality alternative asset managers.

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