Volcker Rule Rollback - Implications for Search Funds / Small Cap Deals?

searcher profile

August 16, 2019

by a searcher from University of Akron in Raleigh, NC, USA

Does anyone have a perspective on how the pending Volcker Rule rollback might impact search fund and lower / mid-market deals?

Reference links below...

https://www.wsj.com/articles/expected-volcker-rule-update-a-win-for-large-banks###-###-####
https://www.bloomberg.com/news/articles/###-###-#### /volcker-revamp-to-ease-banks-trading-rules-path-to-investments

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commentor profile
Reply by an investor
from University of Notre Dame in Pittsburgh, PA, USA
As someone that worked for a bank for many years before spinning our team out because of Volcker I don't think this will have a dramatic impact on search funds. While there may be some, I don't foresee many banks wanting to invest in the "search" phase of the typical searcher, especially directly. Maybe some people will raise fund of funds and now be able to target banks as LPs. For the big/more sophisticated banks their minimum investment size is going to be above most search funds and for smaller banks unless you have a personal connection we have found them extremely risk averse to "equity" type of investments in general. I think the more direct impact will be on your potential debt capital providers like ourselves at Tecum.
commentor profile
Reply by a searcher
from University of Akron in Raleigh, NC, USA
Tyson, I should have specified impact to search fund acquisitions vs. the fund itself. Thanks for your insight.
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