NEW YORK, NY / ACCESSWIRE / December 7, 2022 / 2022 was a significant year for Chatsworth Securities LLC. Since its founding over 25 years ago Chatsworth has been intertwined with technology, asset management and capital raising. Given its proximity to Wall Street and New York City the securities industry has always been a source of professionals, transactions and capital.
Technology transactions have been a staple of our firm since our founding especially given how exciting the 1996 to 2000 period was for technology. Our technology industry practice continues to grow, particularly in the payments sector where one of our earliest transactions occurred in mid-2007 when Chatsworth represented Xign, a leading provider of business-to-business on-demand financial settlement solutions, in its sale to JP Morgan. Our robust technology practice also encompasses: B2B SaaS, green energy and transition energy technologies where we presently represent clients with transactions in hydrogen production, energy saving specialty coatings, fuel cells, gasification, water remediation and clean refining.
Chatsworth's new European presence is attracting European companies seeking capital, an exit (M&A) or expansion into the U.S. Here too we represent clients with exciting technologies with a particular focus on payments technologies and green energy, although we are also representing real estate entities and an airline. Our outreach in Europe is focused on introducing Chatsworth and indeed we have met with a substantial number of companies, Venture Capital and Private Equity firms and have also spoken at several conferences. We are learning that the European capital markets and economies have some significant differences compared to the US. For instance, compared to the US, credit is more difficult to obtain compared to the US. Many companies are unable to easily attain lines of working capital and are forced to use factoring as a source of alternative credit, incurring unusually high costs. This credit challenge could be remedied with an American source of capital or a strategic partner.
Chatsworth Securities 2023 Outlook:
- Mergers and Acquisitions
The current economic and political backdrop leads us to conclude that M&A activity is harder to predict than it has been in several years, but it is more than likely that it will continue its present trend which is lower. For example, in the first nine months of 2022, the total value of global M&A is down more than 35% year over year. Should the Federal Reserve slow or reverse its tightening cycle this could result in a turnaround of dealmaking in the next 12 months.
- Investors Prefer Established Organizations Over Early Stage
With the combination of inflation and potential recession, venture capital firms, private equity firms and strategic buyers are continuing to seek our companies with proven business models and a growing and sustainable customer base. Investors prefer revenue generating companies that have moved out of their unprofitable years and proven themselves to be a good financial bet. Audited financials are particularly important to potential capital providers and strategics.
- Consumers continue to migrate to mobile and alternative payment solutions
Growing adoption and confidence in digital financial services and mobile is changing how consumers spend, borrow, and save money, opening the doors for new providers to gain market share from legacy systems. All generations are less likely to select a bank based on their physical locations, which puts digital-only banks on a more even playing field when it comes to new customer acquisition. Consumers will continue to experiment with "buy now, pay later" options and seek lower cost credit cards.
- The Credit Card Competition Act of 2022
Around 1,700 corporations, including Walmart & Target, and over two-hundred merchant processors, asked the U.S. Congress to support the bipartisan Credit Card Competition Act of 2022. This legislation aims to enhance competition and choice in the credit card market. At present Visa and Mastercard control more than 83% of the U.S. credit card transactions. Swipe fees in the United States are seven times higher than in Europe as Europe limits interchange fees to a maximum of 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards, while in the in the United States, the fee averages approximately 2% of transaction value.
- Energy Prices Continue to Rise
The public finances of most western European countries have outperformed in 2022 due to exceptional economic growth that brought unemployment rates to a new all-time low and contributed to a strong nominal GDP growth. This has facilitated energy-related spending without significant revisions to governments' 2022 deficit targets. Rising energy prices, caused by continued supply chain disruptions, will reduce revenue performance in 2023, while indexation of social benefits (including pensions) will pressure public spending. The EU is among the most exposed economies, due to its heavy reliance on imports of fossil fuels. Economic activity is expected to remain subdued over the first half of 2023, after a mild contraction in the first quarter, with investment falling on the back of higher production costs and heightened uncertainty.
For more information about technology join the "The Exit Strategy", a podcast co-hosted by Ralph DiFiore, Marcus Magarian and Swatick Majumdar, all of whom are Chatsworth bankers.
About Chatsworth Securities LLC
Chatsworth Securities LLC, based in Greenwich, CT, is an investment banking firm that has been providing financial advisory services to corporations and entrepreneurs since 1996. Chatsworth advises on both domestic and international M&A transactions, digital transformation, and capital raises for large and small companies and alternative investment funds. Chatsworth has deep investment banking experience in the asset management industry, FinTech, MarTech, B2B SaaS, real estate, the green energy and transition energy industries. Chatsworth has participated as an underwriter in over six hundred public offerings and has raised over $5 billion for traditional and alternative money managers and their funds.
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SOURCE: Chatsworth Securities LLC