In the Market: Signs of life in the moribund US deals market
By Paritosh Bansal
(Reuters) — Singapore's sovereign wealth fund Temasek invested the smallest amount since 2019 during its last fiscal year, as it waited for when pricing got more to its liking. Now, it's starting to see what it likes.
The S$382 billion ($287 billion) fund is seeing more investment opportunities. It invested in payment processor Stripe in March after passing on earlier fundraising rounds due to high valuation, said Jane Atherton, Temasek's joint head for North America.
Temasek is also seeing deals at reasonable valuations, adjusted for risks, to invest alongside private equity firms in buyouts, as well as to buy assets from them, she said.
«We have been somewhat cautious in terms of the pace of our deployment,» Atherton said. «I would say we're getting less cautious as we continue through the year.»
Temasek's evolving view reflects a change that is becoming more apparent in some parts of the U.S. deals market in recent weeks: the gap between the price expectations of buyers and sellers — a key reason behind what has been a moribund year of deals — is closing, according to half a dozen private equity investors and deal advisers.
Buoyed by a recent market rally driven by technology and other growth stocks and the U.S. economy's surprising resilience in the face of rate rises, buyers are becoming more confident than they were just weeks ago. Some are starting to think they can afford to pay more because they expect to increase the profits of companies they buy.
At the same time, some sellers, particularly listed companies, have come to realize that if their value didn't move up much in this year's stock market rally, the prices that they had seen at the highs in 2021 might not come back.
Peter Orszag,
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