SHEUMACK GMA

The SHEUMACK GMA Global Financial Market HeatMap Edition 2025 0103 RECAPPING 2024 AND LOOKING ENTHUSIASTICALLY TO 2025 - THE SUPER BULL CONTINUED TO RUN In 2024, U.S. equity markets reached new heights with the S&P 500 setting records 57 times and closing the year at 5,882. The DJIA blew through and remains > 40,000, the Nasdaq-100 is now above 20,000, and the Russell 2000 is edging towards an all-time high. By year end, the Nasdaq-100 rocketed +24.9%, the S&P 500 +23.3%, the Dow +12.9%, and the Russell 2000 +10.0%. U.S. equity market valuations expanded in 2024 with the S&P500 trading at more than 30x LTM Earnings, well above long term averages and medians. So, what drove U.S. equity market performance in 2024? In our view, solid corporate earnings, fortified balance sheets with record cash stockpiles, solid economic growth, falling inflation (including a general embrace of soft-landing), Fed loosening (and an expectation of another couple cuts in H1, 2025) and the undeniable and continued magnetism of the U.S. market driving further demand for risk assets and the greenback during a period of highly complex geopolitics and a more-of-the-same bland European economic scene…… Deal activity was generally better in 2024 with ~$3.5T of announced corporate M&A representing an improvement over 2022 and 2023 in terms of both transaction volume and announced value, and signs of a stronger pulse in the Scale-deal segment (transactions of >$1.0B). But to put this in longer term perspective, 2024’s M&A ledger resembled the level of activity more consistent with the mid 2010s and was by no means the type of year that was hoped for and or expected. 2024 is best characterized as a year of expectation and hope as compared to a compelling case for “M&A is fully back.” Heading into the new year, we expect the levers driving M&A volume to synchronize in a more constructive manner including buyers and sellers getting closer to aligning, sponsors returning to the ring, and both Scale and Scope based combinations converging to generate higher and more consistent deal volume. Your Success = Our Mission

With the October 2024 announced ~$1.1B acquisition of a 75% equity interest in Chicago-based specialty credit manager, Monroe Capital LLC, Europe’s Wendel Group (ENXTPA.MF // ~ €4.0B EMC) accelerates the mobilization of its global growth, expansion and diversification plan in building a global private markets focused asset management platform.   The transaction also underscores the strong secular growth catalysts underpinning non-bank credit origination and private markets credit asset management AND showcases the importance of fusing compelling business synergies and smart transaction structure in the forging of strategic collaboration-based business combinations.   This SGMA Midweek TCA Flash captures the essence of both principles. The commercial compatibility between and among these two parties sets the stage for immediate, significant and long-lasting post-closing business opportunities and drives intelligent transaction structuring intended to immediately align interests at both the business level and at the equity ownership level. Complementary origination capabilities, client networks, LP networks, asset management strategies, product mix and regional footprints and know-how form the basis for long dated and meaningful business synergies. Retention of a significant equity interest by current Monroe management, the incorporation of additional performance-based deferred contingent consideration providing owner-managers with additional upside, and the sharing of both fee-related and performance-related earnings are just a few of the transaction structuring “alignment levers” incorporated into the transaction.   YOUR SUCCESS = OUR MISSION

In December 2024, BlackRock Inc. (NYSE: BLK // ~$160B EMC), the world’s largest asset manager with total AUM of ~$10.5T, offered up to ~$13.7B in an all-stock transaction (including an ~$675M equity based retention program and other incentives such as participation in contractual carried interest) two acquire all of the equity interests and businesses of HPS Investment Partners, LLC (Private), one of the largest independent private credit investment management platforms with total AUM of ~$148B. Among other elements and features driving the significance of this transaction, which is expected to close in mid-2025, is the immediate creation of a Top-5 global private credit asset manager, based on total private credit AUM, and the 2nd largest global private credit platform based on 5-year fundraising, with more than $240B of AUM. We expect consolidation in the asset management industry to continue apace in 2025 with some of the primary catalysts being the strategic imperative to be multi-asset class, global, and of scale (with the definition of “scale” constantly evolving). Read all about the strategic thesis driving BlackRock’s acquisition of HPS, the structural contours of the transaction and the financial and business profile of both parties in this week’s SGMA Midweek TCA Flash.   YOUR SUCCESS = OUR MISSION

2025 New Year Greeting

Closely held by ~120 Swiss and non-Swiss financial institution consortia members, Zurich based SIX Group Ltd. was formed in 2008 via the merger of SWX Group, SIS Group and Telekurs Group. With roots dating back to the 1930s and a ~100 year legacy as one of the most forward-thinking financial market structure innovators, SIX now owns and operates the Swiss exchanges, the Spanish exchanges (since the 2020 acquisition of BME), equity interests in other exchanges and a comprehensive portfolio of businesses providing securities services, clearing, settlement, custody, tax and trade repository services; financial information, reference, corporate action & market data, indices & ESG data products and services; open banking, billing, payments & ATMs, and; information technology architecture and applications in support of all its operating units. On November 11, SIX Group announced the entry into definitive agreements with Aquis Exchange plc (AIM: AQX), the 7th largest European stock exchange under the terms of which SIX will acquire AQX for 727 pence per share in an all-cash transaction representing aggregate consideration of ~£225M. Once combined, the complementary SIX Group and AQX’s platforms, offerings and firm culture are expected to further propel the development of both pan-European and global markets infrastructure, including in the area of exchange operations and management solutions. In terms of the SGMA big picture: nationalistic tendencies notwithstanding, we expect the evolution towards longer term unification of financial market structure in respect to asset class, product type and frictionless regional points of access/presence to continue into 2025 (and beyond).   YOUR SUCCESS = OUR MISSION The Global Financial Market Structure Specialists

After several years of executing aggressively and effectively on a North American and Australasian asset and wealth management consolidation program, the senior leadership team of Canada’s CI Financing Corp. (TSX: CIX), with more than 30 acquisitions under its belt and an international platform comprising more than 3,000 employees and client assets under management, advisement and administration of more than $535B, is along with its sponsor Mubadala Capital, demonstrating high conviction in both the sizable global growth opportunity (still) available AND that it and CI will be best able to seize on this opportunity as a closely-held (i.e. private) company. In this week’s installment of the SGMA MidWeek TCA Flash, we provide vivid insights on the valuation parameters, transaction structure and strategic rational of this ~$4.7B sponsored take-private transaction in the hotly-contested global wealth management sector.  The Global Financial Services Industry and Market Structure Specialists YOUR SUCCESS = OUR MISSION

In this week's SGMA Midweek TCA Flash, our RRA Team highlights and underscores the continued quest of traditional asset managers to further penetrate the private credit asset class and accelerate AUM growth in the private markets and alternative asset management strategies, generally speaking. In this case, incumbent Janus Henderson Group plc (NYSE: JHG / $7.0B EMC / $360B AUM) announced in August its entry into an agreement to acquire Chicago based Victory Park Capital and an affiliate (Private / $6.0B AUM), a 20-year specialist in asset backed, consumer and real estate finance related investment strategies, taking its alternatives-based AUM to ~$15B, still relatively small compared to the overall JHG franchise (~$320B) but nonetheless accelerating. VPC’s established network of institutional investors including insurance companies and its proprietary deal/investment origination channel were of particular appeal to JHG. The transaction closed recently (Q4, 2024).   From a transaction structure viewpoint, JHG acquired a 55% interest in VPC’s equity ownership. Principals of VPC remain closely aligned with their new strategic investor. Further, VPC principals retained 100% of carried interests associated with legacy funds and will continue to have significant (though less than 100%) exposure to all future funds. Adding to both the strategic connective tissue and future business alignment: (i) JHG agreed to provide seed funding for future fund strategies; (ii) the transaction consideration included closing consideration as well as earn-out based (i.e. deferred) consideration; (iii) the consideration package was structured to include both cash and JHG common stock, and; (iv) the transaction included a call option, providing JHG the right to acquire up to 100% (i.e. all remaining equity interests not acquired at the closing) of VPC, an option we expect will be exercised in the future. Structured in this manner, the transaction highlights alignment of interests of and among acquirer/investor and seller/target through BOTH the equity purchase (i.e. “corporate transaction”) itself and through the ongoing business integration plan (i.e. “business transaction”). Increasingly, we see in the industry and are involved as advisors ourselves in a growing number of transactions involving partial initial acquisitions in conjunction with carefully engineered strategic collaboration agreements. This is one such example. YOUR SUCCESS = OUR MISSION SHEUMACK GMA The Global Financial Services Industry and Market Structure Specialists

The SGMA Global Financial Markets HeatMap (December 2024 Edition) A RIPPING MONTH! U.S. equity markets posted the best monthly returns of 2024 in November with the S&P500, Nasdaq, and Dow Jones Industrial Average each advancing more than 5%. Two days following the November 5 U.S. general election which culminated in former President Donald J. Trump (R) becoming the first comeback U.S. President (#45 and #47) since Grover Cleveland (D) (# 22 and 24), Federal Reserve Chair Jerome Powell spoke of the progress made in maximizing employment and stabilizing prices as he announced the FOMC’s decision to lower the federal funds rate 25bps to 4.50 – 4.75%, continuing an easing cycle commenced in September. While Chair Powell affirmed that “the election will have no effects on our policy decisions as we don't know what the timing and substance of any policy changes will be,” the popularity of the risk-on trade only increased through November as the Red-Wave materialized via the GOP’s ascension to a majority in both the U.S. Senate and House of Representatives. Fueling U.S. equity market performance, in our opinion, was and is the expectation of business-friendly(ier) policies, softer-touch regulation (note the performance of U.S. bank stocks!), augmented U.S. corporate earnings growth via higher levels of corporate deal-making, and; strong net capital inflows from overseas markets having a “piling on” effect on the demand for U.S. equities. In our view, both November and the YTD period highlight once again our long-held view that the U.S. is, from a capital markets structure point of view, the undisputed and default “World Liquidity Pool.” The degree of conviction in a “buy America” strategy demonstrated by both domestic and foreign investor segments is both manifestly evident and especially resonant today in the presence of what appears to us to be generational geopolitical tensions, serious regional conflicts, rising nationalism, and even the signaling from the incoming administration of probable (and potentially exacerbating) punitive protective trade measures. Enjoy this edition of the SGMA GFM HeatMap. Your Success = Our Mission