Colton Alexander LLC – Not another Investment Bank!

Colton Alexander LLC – Not another Investment Bank!

Colton Alexander LLC, an affiliate of Weild & Co., broker-dealer, provides strategic advisory services to public and private sector issuers through private placements of debt and equity, mergers and acquisitions, private markets research and advisory.  Weild & Co. founder David Weild IV has had a distinguished career as an investment banker, co-chairman of NASDAQ and as one of the architects and draftsmen of the 2010 Jobs Act, that changed issuer access to capital through expansions of Regulation A, Regulation D 506 (C) and crowdfunding. The firm’s professionals are passionate about contributing to society through the formation of capital and its role as an engine of commerce in today’s market driven system.

Colton Alexander Investment Banker Alex Kramarchuk comments on his current thinking on the Private Capital Markets and what is ahead, including a look some of the trends and ideas that impact today’s investors.

Over the past eighteen years, the private equity universe has grown more than seven times in net asset values. The number of private equity backed companies has doubled in the same time frame and publicly listed companies have declined by forty-six percent over the last twenty-five years. Following an endowment model, allocations to private markets assets are likely to continue to grow for the foreseeable future. Nearly two trillion dollars in dry powder is at the sidelines evaluating opportunities that are the new disruptive models and technologies. The indicator is that Qualified Institutional Buyers and Accredited Investors will incrementally continue to maintain or increase allocations to private equity and venture capital direct investments, co-investments, and fund structures.

The industry is rapidly evolving and can offer many avenues for investors to customize allocations and exposure. An expanding variety of product offerings make the industry more flexible and accommodative to a range of investors and their interests. Greater depth of products and services gives investors the ability to tailor, not only by asset class and scale, but also by duration, price, risk and other factors. Investing based on values has taken on greater meaning with younger generations and I believe going forward either through regulation or conscience, investors will consider the impacts of their decisions.

Much of the advancement in the Private Capital Markets is based on the proliferation of digitization and artificial intelligence. Sponsors, investors, and fund managers are reshaping interactions to improve customer experiences and reconstruct mature processes into digitized capabilities across the value chain in order to provide enormous benefit to investors. Mountains of data will gain value by being coupled to advanced analytics that provide insight into new investment theses and value creation.

“Today, there is not a conversation on any topic that does not involve coronavirus, and some have termed the pandemic a black swan event that could not have been anticipated. I disagree. Recently, I had the pleasure of reading The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore by Michelle Wucker. The title tells readers what to expect and, in my view, the pandemic is a Gray Rhino. We knew it, we were preparing for it, we saw it and we ignored it at the outset when it was most important to act. Coronavirus is here to stay. It will remain a danger to compromised populations until there is a proven vaccine and it will dwell among us in perpetuity like the flu and we will come to live with it understanding more of its nature and its devastating effects. We can only hope that common sense will prevail, and that fear and division will not overcome us. Rational opinions would have us think that the mandated guidelines will allow humankind to manage the crisis and over time come to accept its consequences as we have in the past with polio, rubella, ebola, influenza and every other malady that can afflict us,” said Kramarchuk.

“The Private Capital Markets and the world in general will take time to heal and repair and while it could be quick, more likely it will take a mid-term two to five year approach and key to preservation and growth will be the ability to assess the inefficiency in the market(s) that will generate alpha returns within specified risk tolerances. Anything more would be wishful thinking,” he continued.

For information, contact Alex Kramarchuk at akramarchuk@coltonalexander.com.