Mass. MEDIC LEADING IN TURBULENT TIMES Mark Gallagher Senior Vice President Silicon Valley Bank March 5, 2009
Agenda • Global Economy – The world is on fire! • Med. Tech Economy – Doing ok? • The Good News – sifting through the ashes • Shamless Commerce!
How bad can it be?
Negative Events Accelerated… Fed Cuts 25 bps, Establishes TAF Market-supporting events above the timeline Fed Cuts 75 bps, Creates TSLF and PDCF GSEs taken into conservatorship TARP Approved/ Global Rate Cuts Fed Cuts 50 bps Fed Cuts 125 bps Fed Cuts 25 bps Q 107 Q 207 Q 307 Fed Begins Purchasing MBS Q 407 Fed Cuts 25 bps Q 108 Q 208 Q 308 Fed Cuts Rates to 025 bp Q 408 Q 109 Madoff >50 Mortgage Brokers Shut Down Housing Bubble Articles at all-time high FNM/FRE/ Lehman/AIG CDO-Backed ARS Fails First Extendible CP Extends Negative events below the timeline Fed Leaves Rates Unchanged Oil peaks at $147 GSEs encouraged to expand /raise capital Bear Stearns Bailout Majority of ARS Fail Stanford 3. 6 million jobs lost since 1/08
…Convert to Daily in September… 9/14 Fed injects $70 B - most since 9/11 9/17 Paulson plans TARP 9/19 SEC bans Short Sales 9/20 TARP request finalized - $700 B 9/21 Mitsubishi invests $8. 4 B in M Stanley 9/26 Global Swap Lines Increased September 2008 9/8 FNM/FRE Conservatorship 9/17 Fed lends $28 B to AIG 9/15 Reserve fund "Breaks the Buck", Fed Leaves Funds rate at 2% 9/14 Lehman to file BK, Merrill forced on Bof. A, Stocks fall most since 9/11 9/12 Market expects Lehman Bailout 9/29 Citigroup to acquire Wachovia 9/25 WAMU Seized
The Markets Source: SNL Financial
Federal Funds Rate Source: Federal Reserve Bank, St. Louis
Housing Prices Plunge…
Home Construction Plunges As Well
Auto Sales Drop
Manufacturing Drops
Labor Markets Deteriorate
Consumers Cut Back
Household Names Disappear
Market Values Plunge • In $ billions A collective loss of over $1. 1 trillion (or 82%) in Market Cap since 2007 • Over $400 billion in Market Cap lost since the start of Q 4 2008 $167 $74 $82 $238 $117 $85 $274 $86 $24 $31 $37 $35 $18 $17 $37 $81 $23 $12 $108 $43 $39 Winners / Survivors $18 Sold / Buried Source: SNL Financial; Yahoo Finance Market Cap 12/31/06 Market Cap 01/22/09
Volatility and Fear at an All-time High Current Crisis 9/11 Accounting Scandals Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. A high value of VIX corresponds to a more volatile market. Source: Chicago Board Options Exchange
Total medtech financing While venture capital held up, total financing was down sharply … Source: Ernst & Young, Think. Equity Partners, Windhover, Dow Jones Venture. Source and Jefferies & Co.
Medtech mergers & acquisitions 2008 M&A activity fell to pre-2006 levels … Source: Ernst & Young
Medtech mergers & acquisitions … with most of the decline occurring in the second half of the year. Source: Ernst & Young
Are Banks Pulling Their Weight?
Banks Do NOT Dominate the Credit Markets Source: Arbor Research • For better or worse, securitized markets dominate credit availability • Securitized markets are shut due to investor fear • Unrealistic to expect the banking sector to immediately replace this market
Obligatory Pie Chart
Fed Lowers Forecast Dramatically
Medtech Financials Net income of non-conglomerates is on pace to grow by 46%
Medtech market capitalization … but company valuations plummeted in the fourth quarter.
SVB Financial Group (SIVB – Nasdaq) SVB Financial Group SVB Silicon Valley Bank SVB Analytics SVB Capital SVB Global SVB Private Client Services SVB Securities/ SVB Asset Mgmt Commercial Banking Valuations & Capitalization Software Venture Capital & Private Equity Global Networks Private Banking Funds Management -Private Co. Valuations (409 A) – 30 people -Relationship Mgmt with VC / PE for SVBFG -London office: lending to emerging cos. in Europe -Family of funds: VC fund of funds, Co-Investment Fund, Gold Hill venture debt, Partners for Growth -Israel and Canada: commercial banking in ’ 07 -LP Investments (parent company) since 1995 - Assisted 450 clients and VC / PE firms overseas -VC / PE Backed & Large Tech Cos. : Term Debt, Asset based lines, Cash Flow lending -Total Loans $3. 0 B -Deposit & Cash Management Services - Total Deposits: $4. 0 Billion -Private Equity Services: Lending and Cash Mgmt -International: foreign exchange, letters of credit, etc. -Cap Table management (e. Prosper) – 900 companies and 30, 000 optionees -Established in 2006 - Hundreds of engagements in first 12 months -FAS 157 in 2008 -India & China: Consulting offices -Personal loans to CEOs, CFOs, General Partners and extended SVB network. $20 Billion of SVB client assets under management in: REPOs: collateralized, overnight investments which generate interest income only SVB Securities: self directed investment in money market mutual funds SVB Asset Mgmt. managed accounts for greater performance, customization and reporting
It is a cycle! Y
Скачать презентацию Mass MEDIC LEADING IN TURBULENT TIMES Mark Gallagher
6e79342b58dd331c73a27f202a63eca9.ppt