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As the dust settles from the recent implosion of the credit markets, it seems the middle market has escaped the worst of the credit crunch. Panelists at The Deal's Fifth Annual Private Capital Symposium on Wednesday discussed the credit crunch as well as other issues at the "Deals in the middle market" panel moderated by The Deal senior editor Nathaniel Baker.
The overall attitude of the panel was that midmarket deals are happening at a greater rate than large-cap deals over the last year or so, but there's also a cautiousness because of the uncertain state of the economy, which is prompting lenders to put stringent terms on funding.
But large-cap funds have also noticed the opportunities in the middle market. "Larger-cap funds are investing in middle-market transactions," said James Epstein, partner, Pepper Hamilton. He also added that when it comes to funding these midmarket deals equity capital will be used as opposed to straight debt. But the middle-market gravy train will, of course, have to slow down. "The economy is the big question. ... The economy will get worse before it gets better," Sokoloff said. The other panelists concurred that a slower economy will cool off midmarket deals. Another thing to watch out for that may impact midmarket deals is the rise of commodity prices in such items as food and oil. - Gerald Magpily See Private Capital Symposium agenda CategoriesContributed content from Middle market video
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