Finance Leaders Eye Deals at Milken Confab Amid Market Woes

Key Takeaway

• The Milken Institute Global Conference in Beverly Hills attracts finance leaders to discuss critical issues, including M&A and interest rates.
• Notable speakers like Elon Musk and CEOs from Citigroup, Carlyle Group, and Wells Fargo highlight optimism for deal revival amid market uncertainties.
• Private equity faces challenges with subdued M&A volume and high undeployed capital, seeking opportunities in a cautious investment climate.

Finance Luminaries Gather in Beverly Hills

The Milken Institute Global Conference, often referred to as the Davos of the West, is set to commence in Beverly Hills, California, with an impressive roster of speakers from the finance world and beyond. This year's conference will cover a broad range of topics, including artificial intelligence and the ongoing conflict in the Middle East. Among the notable attendees is Elon Musk, who will be interviewed by Michael Milken, a figure known for his transformation from a 1980s-era junk bond king to a philanthropist. The event is drawing attention not only for its high-profile speakers but also for the critical financial issues it aims to address, such as the prospects for higher interest rates and the state of mergers and acquisitions (M&A).

Wall Street's Concerns and Expectations

The finance sector is currently navigating through a period of uncertainty, with concerns over sustained high interest rates and a slowdown in M&A activities compared to the peak levels of 2021. Harvey Schwartz, CEO of Carlyle Group, expressed optimism for increased deal activity, citing improvements in investor confidence and the availability of capital from the banking system and private credit. The conference will also feature discussions by finance leaders like Citadel’s Ken Griffin, Citigroup Inc. CEO Jane Fraser, and Wells Fargo & Co.’s Charles Scharf. Additionally, hedge fund billionaire Bill Ackman will participate in an invite-only discussion on diversity, equity, and inclusion, following his public stance against such programs at companies and universities.

The State of Dealmaking and Private Equity

The conference is occurring at a time when the M&A volume remains subdued, influenced by higher interest rates and valuation disagreements. This environment has posed challenges for private equity firms looking to exit investments and return capital to investors. Panels at the Milken conference, including discussions led by Hellman & Friedman CEO Patrick Healy and Blackstone Inc.’s Joe Baratta, will delve into the current state of private equity, exploring both its opportunities and pitfalls. The lack of new deals has resulted in private equity and private credit firms accumulating significant amounts of undeployed capital, increasing the pressure to find viable investment opportunities.

Beyond Finance: A Diverse Agenda

The Milken Institute Global Conference has evolved significantly from its origins, moving beyond its focus on finance to include a wide array of topics and speakers. This year's event will feature discussions with biomedical pioneers, retired athletes turned entrepreneurs, and international figures like Queen Rania Al Abdullah of Jordan. The conference will also address pressing global issues, such as the Israel-Palestine relations, in an invitation-only panel. The diversity of topics and speakers underscores the conference's broad appeal and its role as a platform for addressing some of the most pressing challenges and opportunities facing the world today.

Street Views

• Harvey Schwartz, CEO of Carlyle Group (Bullish on deal activity):

  "Capital from the banking system and private credit is more readily available. These are clear improvements from this time last year, which is driving increased investor confidence, and if sentiment continues to improve, we expect a higher level of deal activity."