On March 9, the current bull market — the longest on record since World War II — reached its 10th anniversary. Such a milestone should be cause for celebration. But as the distance grows from the global financial crisis, the number of participants with experience navigating downturns also gets smaller.
Consider, for instance, that most deal-makers in their early to mid-30s have yet to encounter a recession throughout their professional careers. But even those longer in tooth, who recognize the catalysts that led to the last recession, remain unsure as to what could trigger the next one. While this uncertainty is doing little to slow deal activity, many have turned their attention to the debt markets for clarity, recognizing credit as the fuel that drives mergers and acquisitions.
The good news is that 2019 is in many ways indistinguishable from last year. It's certainly not a market without risk, but the opportunity set is supported by an economy showing persistent and strong growth trends, healthy corporate fundamentals and an M&A landscape — attracting both financial and strategic buyers — as dynamic as anytime in recent memory.
To get a sense of how long these conditions can endure, however, it helps to understand the supply and demand characteristics influencing M&A activity.