The word is spreading. Investors are nervous about the stock market. Wall Street is preparing for problems on Main Street, and many investors are looking for alternative assets. Economists think the world is heading toward another Great Recession, and there are signs that this major recession has already begun. Hedge fund managers are well aware that Europe, Asia, and South America are already in a deep recession. The United States is one step away from recession mode, and investors are searching for assets that will hold value during tough times. Madison Street Capital, the Chicago-based investment firm that specializes in Mergers and Acquisitions as well as hedge funds, is prepared for a global recession. According to PR.com, Madison Street had 42 hedge fund transactions in 2015. In 2014, the company only had 32 transactions.
Madison Street Capital’s founder and CEO, Charles Botchway, is an expert in the M&A business, but he is also an effective hedge fund manager. Botchway thinks 2016 is going to be a difficult year for hedge funds for several reasons. Operating costs are increasing, fees are being reduced, and the uncertainty about China has hedge fund managers scratching their heads. But Botchway has seen the market go through tough times before, and the team at Madison Street Capital has been preparing for a downturn by watching the exchange-traded funds market and various alternative assets that perform better during recessionary periods.
Other financial advisers are pushing ordinary investors into mutual funds that are not as risky and don’t offer the returns that riskier assets offer. The Federal Reserve won’t raise interest rates, and that’s good for investors, according to the senior managing director of Madison Street Capital, Karl D’Cunha. D’Cunha thinks interest rates will stay where they are because of China’s economic issues. D’Cunha also said that Madison Street Capital hedge funds don’t have any junk bonds, esoteric investments or bank loans that other funds have.
D’Cunha believes that Madison Street Capital is in a position to ride out a global recession because the merger and acquisition business increases when corporations start to feel the impact of a global recession. Most corporations have an international presence and profits are already suffering because of recessions in Asia, South America, and Europe. Madison Street is working on several mergers in 2016, and those mergers are international mergers. Botchway and the Madison Street Capital team is ready for another good year in spite of the economic downturn.
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