NEW YORK--(BUSINESS WIRE)--Sutton Place Strategies, LLC, whose Deal Origination Analytics™ service helps private equity investors, mezzanine firms, senior lenders and family offices improve their deal origination and business development effectiveness, today released proprietary industry rankings that showed that deal sourcing in the competitive middle market in 2013 was highly fragmented, and that the fragmentation will almost certainly increase in 2014.
“Deal sourcing in the middle market is becoming increasingly competitive but also increasingly diffuse,” said SPS founder Nadim Malik. “Out of a total of 636 active intermediaries in the middle market in 2013, the 14 top sell-side advisory firms accounted for only 18.4% of the total deal volume, while 472 firms completed three or fewer transactions. That’s what we mean by ‘fragmentation,’ and that reality has implications for both investors and intermediaries in 2014.”
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The SPS Deal Sourcing Fragmentation Rankings: 20131 |
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| Firm | # of deals | % of total | Cumulative % of Total | ||||
| Houlihan Lokey | 41 | 1.9% | 1.9% | ||||
| Raymond James | 41 | 1.9% | 3.9% | ||||
| Lincoln International | 35 | 1.7% | 5.6% | ||||
| Jefferies & Co. | 29 | 1.4% | 6.9% | ||||
| Evercore Partners | 27 | 1.3% | 8.2% | ||||
| RBC Capital Markets | 27 | 1.3% | 9.5% | ||||
| Sandler O'Neill & Partners | 27 | 1.3% | 10.8% | ||||
| William Blair & Co. | 27 | 1.3% | 12.1% | ||||
| Lazard | 25 | 1.2% | 13.2% | ||||
| Robert W. Baird | 25 | 1.2% | 14.4% | ||||
| Harris Williams | 22 | 1.0% | 15.5% | ||||
| BMO Capital Markets | 21 | 1.0% | 16.5% | ||||
| Moelis & Co. | 21 | 1.0% | 17.5% | ||||
| Generational Equity | 20 | 0.9% | 18.4% | ||||
| The Rest of The Market: | |||||||
| 26 firms completing 10-19 deals | 329 | 15.6% | 34.0% | ||||
| 9 firms completing nine deals | 81 | 3.8% | 37.9% | ||||
| 12 firms completing eight deals | 96 | 4.6% | 42.5% | ||||
| 14 firms completing seven deals | 98 | 4.7% | 47.1% | ||||
| 14 firms completing six deals | 84 | 4.0% | 51.1% | ||||
| 26 firms completing five deals | 130 | 6.2% | 57.3% | ||||
| 50 firms completing four deals | 200 | 9.5% | 66.8% | ||||
| 57 firms completing three deals | 171 | 8.1% | 74.9% | ||||
| 114 firms completing two deals | 228 | 10.8% | 85.7% | ||||
| 301 firms completing one deal | 301 | 14.3% | 100.0% | ||||
| Total**: | 2,106 | 100% | |||||
Adding to the challenge in the deal sourcing community is the fact that too many investors are still relying on their traditional sources of deal flow, including the larger investment banks and intermediaries, Malik noted. “What we face in 2014 is a large overhang of capital, robust lending markets, and increased competition for middle market deals from PE firms, family offices and strategic buyers. Investors who do not diversify and optimize their deal sourcing efforts risk missing out on relevant deals and adversely impacting their returns.”
About Sutton Place Strategies, LLC
Founded in 2009, Sutton Place Strategies has established itself as the thought leader in deal sourcing intelligence in North America. The firm’s core service is Deal Origination Analytics™, a subscription-based information service for private equity and mezzanine lender firms. This service consists of a customized report package designed to quantify the addressable universe of a client’s transaction target market, measure market penetration, and serve as a road map to increase the effectiveness of a firm’s internal business development efforts. The reports are backed by proprietary data tracked on a primary basis by Sutton Place Strategies since May 2009.
1 Based on private equity and M&A transactions completed in 2013 with deal values between $10 million and $250 million that had at least one sell-side advisor. **Total exceeds actual number of deals closed in 2013 due to multiple sell-side advisors on some transactions.
