Condoleezza Rice to keynote major US private equity conference

Former US Secretary of State Condoleezza Rice will address delegates to the Association for Corporate Growth (ACG) Intergrowth 2012 Conference on Wednesday, April 25 in Gaylord Texas.  The ACG is comprised of private equity and other advisors to the American middle market economy, which represents over a third of American jobs and more than $9 trillion in annual revenue, according to a study by the Middle Market Center at Ohio State University.

Secretary Rice’ address is particularly apropos at a time when 70% of global purchasing power lies outside the United States and the US International Trade Administration is calling for middle market companies to export for growth.

The Middle Market Economy: An Overview

According to the Middle Market Center, in a study entitled The Market that Moves America, the middle market economy is one of the most important drivers of America’s economy, compromising companies with annual revenue in excess of $10 Million Dollars and less than $1 Billion dollars.  Indeed,  if the Middle Market were a country, its GDP would rank it as the fourth-largest economy in the world — just behind Japan but ahead of Germany.

The Middle Market comprises publicly traded, privately owned, and family-owned companies, partnerships, sole proprietorships, companies transitioning through the Middle Market, and emerging growth businesses transitioning from small or start-ups to bigger businesses.  They employ 41 million workers, representing a full 34% of total U.S. private employment.  27% of all large companies in 2010 were still Middle Market firms in 2005 — and this dramatic growth occurred while the U.S. economy shrank during the same period.  Research cited by the Middle Market Center indicates there is a resilience associated with Middle Market firms by virtue of their size, diversity and responsiveness.  Further, a large number of public Middle Market companies are tapping into the capital markets, and now account for 59% of all businesses raising financing through that channel.

Middle Market executives are “confident about the future but also recognize need to build and evolve internal capabilities in order to compete in what is likely a more global, more regulated, and more competitive marketplace” concluded the study.

Middle Market Corporate Leadership is Positive About 2012

The New York Times reported this month that “U.S. chief financial officers (CFOs) of middle-market companies have grown more positive about the state of their industries and businesses as well as the state of the domestic economy over the last six months.  94% expect the U.S. economy will grow or remain stable in 2012, up 14 points from the previous survey, with 23% shifting to a growth outlook.”  The article cites Dan Henson,  president and CEO of GE Capital, Americas:  “Mid-market CFOs are more optimistic despite the  European fiscal crisis and inconsistent job growth.  A larger majority sees  top-line growth and stable or better profits this year, and more will be hiring. These companies have access to affordable capital, which in 2012 is most likely to be targeted for investment to finance growth and to  purchase equipment.”

Connecting Private Equity with Corporate Leadership Remains a Challenge

One of the greatest challenges facing middle market advisors is connecting to key decision makers within middle market companies due to the sheer complexity and volume of the market.  Most advisors use traditional methods of connecting via networking with peers within the industry.  According to David Teten, CEO of Navon Partners, a more diversified approach using outbound origination programs and social media, would yield greater access to more opportunities for both advisors and the corporate leadership they seek to serve.

As America’s middle market economy continues to expand its’ exposure to international markets, the advisors that serve the market will be well placed to use best methods available to streamline the process whereby business owners can connect with the advisors who can help them achieve both domestic, as well as global goals.