For Aryeh Bourkoff, the star tech, media, and telecom
(TMT) banker and founder of the boutique financial institution LionTree, 2017 will
be a year of uncertainty.
But it will also be ripe with chance, specially in the TMT
and purchaser areas.
That’s the information Bourkoff gave his team in
a year-end letter sent out in December.
“Politics and know-how can be destabilizing forces… They
problem our financial and civil orders,” Bourkoff, who is
a former vice chairman at UBS, wrote.
“I have generally thought that in buy to best provide the firm and
our shoppers, we should understand new uncertainties, create
tactics to account for them and keep on being nimble and inform to
sudden shifts in the landscape.”
He referred specifically to the election of Donald Trump as US
president and said that political change could direct to a
repatriation of money, amid other matters. That could cost-free up
money for mergers and acquisitions — specially for firms like
Apple, Microsoft, Alphabet, Cisco, and Oracle, which put together
keep some $five hundred billion in money overseas.
But it’s not just heading to be mergers, Bourkoff wrote:
“We’ll see firms exam what it indicates to have the proper
ratio of debt to equity. We’ll see PIPE (Private Expense in
Community Equity) specials turn into much more well-known as a way to bridge the
hole among buyers with small-time period desires and CEOs with
prolonged-time period eyesight. This is a massive chance for private funds
He explained the current market is underpricing the chance these shifts pose as
they create volatility and dislocation in asset prices.
‘The middle-gentleman is more and more pressured’
Within just the media marketplace, specifically, Bourkoff said that
technologies and distribution platforms will go on to evolve
but the international urge for food for content material will keep on being consistent.
“In this paradigm, price shifts to the bookends – the fundamental
content material and the know-how platforms that touch the end user –
and the middle-gentleman is more and more pressured,” he explained.
That could have an impact on long term dealmaking.
He explained massive media makes — like Time Warner, Comcast, and
Verizon — and tech giants — like Apple, Netflix, and Facebook —
have scale, entry to funds, and international audiences. But they
have to have to innovate and adapt to youthful audiences and transforming
Their disruptors are firms like Snap, Buzzfeed, Jaunt
VR, and Thrillist.
“The convergence of regular and digital media will
generate content material synergies, promotion scale throughout quite a few
platforms and revenue force efficiencies,” Bourkoff wrote.
He added that this convergence does not mean that we’ll
see much more over-the-best streaming and skinny programming bundles.
Desire for OTT falls sharply when prices increase,
Bourkoff said, and the programming charges necessary to create
skinny bundles of channels will force prices so high that
demand will ween.
Bourkoff explained his firm’s deal pipeline bundled fifty
mandated stay specials at the end of the yr.
“As we establish out LionTree in 2017, I firmly
imagine it has by no means been much more crucial to choose a prolonged-time period
investment see as it is now,” he explained.