Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Goodbye to the Golden Era of US Equity Supply Shrinkage? Not So Fast!

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Cross Asset Strategy

Liquidity at US corporations has risen significantly over the past 12-months, partly due to the efforts of the Fed in the wake of the COVID-19 pandemic to make it easier for them to raise cash. Elevated cash balances will provide an important funding source for future M&amp;A activity. 
Legacy issues from the pandemic will impact M&amp;A strategy across sectors differently, notably technology companies will face greater regulatory scrutiny due the greater prosperity they enjoyed during 2020. Shifts in consumer behaviour towards online and digital platforms, particularly in gaming and media, will force companies to acquire content providers. Meanwhile, pledges by governments to "Build Back Better" and keep health care prices down will also spur M&amp;A activity in the energy and health care sectors.
Elevated equity valuations are not currently conducive for private equity firms making acquisitions of public companies at high premiums, but public markets provide ideal exits for earlier leveraged transactions. The short-lived boom in special purpose acquisition companies (SPACS) will underpin a strong pipeline of acquisitions of private companies in 2021, but the need to deploy funds over a 24 month period from their IPO will raise concerns about deal quality.
The much-anticipated rise in M&amp;A will produce higher leverage in the corporate sector, thereby raising fears about loan quality at a subsequent date, particularly for acquisitions by SPACS which could involve the use of leveraged loans. The Fed has pledged to keep financing costs low, while improving economic conditions should prevent a rise in concerns about credit quality, at least for the time being.

Liquidity at US corporations has risen significantly over the past 12-months, partly due to the efforts of the Fed in the wake of the COVID-19 pandemic to make it easier for them to raise cash. Elevated cash balances will provide an important funding source for future M&amp;A activity. 
Legacy issues from the pandemic will impact M&amp;A strategy across sectors differently, notably technology companies will face greater regulatory scrutiny due the greater prosperity they enjoyed during 2020. Shifts in consumer behaviour towards online and digital platforms, particularly in gaming and media, will force companies to acquire content providers. Meanwhile, pledges by governments to "Build Back Better" and keep health care prices down will also spur M&amp;A activity in the energy and health care sectors.
Elevated equity valuations are not currently conducive for private equity firms making acquisitions of public companies at high premiums, but public markets provide ideal exits for earlier leveraged transactions. The short-lived boom in special purpose acquisition companies (SPACS) will underpin a strong pipeline of acquisitions of private companies in 2021, but the need to deploy funds over a 24 month period from their IPO will raise concerns about deal quality.
The much-anticipated rise in M&amp;A will produce higher leverage in the corporate sector, thereby raising fears about loan quality at a subsequent date, particularly for acquisitions by SPACS which could involve the use of leveraged loans. The Fed has pledged to keep financing costs low, while improving economic conditions should prevent a rise in concerns about credit quality, at least for the time being.    

Elevated US Corporate Cash Levels to Underpin M&A Activity, but Leverage Will Rise Still Further