My partner Steve Melore and I braved the latest New York snow storm to attend the Small Business Investor Alliance’s Northeast Private Equity Conference on January 22, of which Farrell Fritz was a sponsor. The SBIA is the leading professional organization for lower middle-market investment funds and the LPs that invest in them.
The Conference kicked off with a presentation on SBA goals and priorities for 2014 by Javier Saade, the new Associate Administrator for the SBA’s Office of Investment and Innovation, the division that runs an alphabet soup of programs to provide capital to private investment funds to invest in small businesses (SBIC) and Federal research grant dollars to technology companies (SBIR and STTR). Mr. Saade announced that the SBA intends to expand the SBIC program’s annual budget from $3 billion to $4 billion. He stated that another priority for the SBA in 2014 will be the promotion of equity crowdfunding, and in answer to a question posed during the Q&A from your humble blogger about how the SBA might lean on the SEC to finally pass reasonable crowdfunding rules, Mr. Saade said that he believes the SBA could play a constructive informational role in this regard.
Next up was Doug Farren, Associate Director of the National Center for the Middle Market, who deftly filled in for his boss in presenting the results of the Center’s quarterly business performance and outlook survey. The report was based on a survey of 1,000 C-suite executives of middle market companies – those with annual revenues between $10 million and $1 billion — on key indicators of past and future performance. Among other key results, the survey revealed that revenue for these companies increased during the fourth quarter of 2013 and that 57% continue to expect improvement in 2014. A majority of middle market companies, however, said that “uncertainty” regarding government policies (perhaps a euphemism for an increase or expected increase in burdensome regulation) is hampering their ability to grow and their willingness to hire and invest. In particular, healthcare legislation continues to be the largest concern.
Brett Palmer, the energetic President of SBIA, delivered an insightful analysis of this year’s midterm elections and an update on key legislative and regulatory initiatives affecting private equity.
The final speaker was the least connected to private equity, but the most talked about during the post-conference networking session. J.J. French, the founder, lead guitarist and manager of heavy metal band Twisted Sister, was clever and comedic as he regaled the audience with tales of the band’s battles with Murphy’s Law during the 70’s and 80’s in its quest to secure a record contract.
Decidedly a worthwhile conference, and I was particularly impressed with how Brett and his staff were able to control the mix of attendees, tactfully ensuring an overwhelmingly large percentage of fund managers and investors and keeping guys like me to a minimum.