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Healthcare Innovation and the Dynamism of Michigan Entrepreneurs through The Mid Michigan Healthcare Innovation Partnership

“It is not the strongest of the species that survives, but the most adaptable…” – Charles Darwin Darwin might be proud of the alliance forged by Bluewater Angels, the Central Michigan University College of Medicine and the Central Michigan University College of Business Administration. The…

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Healthcare Innovation and the Dynamism of Michigan Entrepreneurs through The Mid Michigan Healthcare Innovation Partnership

10:00 08 April in Blog

“It is not the strongest of the species that survives, but the most adaptable…” – Charles Darwin

Darwin might be proud of the alliance forged by Bluewater Angels, the Central Michigan University College of Medicine and the Central Michigan University College of Business Administration. The Mid Michigan Healthcare Innovation Partnership is a prime example of the strong becoming adaptable. 

Healthcare currently represents 18% of our GDP.  The U.S. spent three and a half trillion dollars on health care in 2017 – the most current year for which accurate figures are available.  That expenditure represents 10,739 dollars for every man, woman, and child in the country.  We spend more per-capita than any other country.  The health challenge and the weight of this fiscal burden is something we must address!

Health care cost are growing at an unsustainable rate.  Yet the promise of our free enterprise system
offers us hope that we will meet this challenge and continue to lead the world
in not only medical breakthroughs but also the development of innovative
business solutions to the myriad and vexing challenges facing the health care
industry.

It is well known that start-ups have created the
lion’s share of new jobs in the country over the past 20 years.  Consider data from the Federal Reserve Bank
of St. Louis (stlouisfed.org).  Net job
growth in the U.S. between 2011 and 2014 was 10,173,430 jobs.  Of that total, 91% or 9,271,799 jobs came
from start-ups.

At the nexus of these facts is a Darwinian
opportunity.  A prospect that three
diverse and forward-thinking organizations (Bluewater, the CMU Colleges of
Business and Medicine) saw as a chance to do something special—something
entrepreneurial.  My favorite definition
of an entrepreneur suggests that he or she is someone who in the face of risk
and uncertainty marshals resources to create new markets and new business
opportunities.  It is that very ethos
that has driven the establishment of the agreement among these three parties.

This Wednesday, the fruits of that liaison will be
manifest in the Partnership Speaker Series that brings two high level
executives from Medtronic:  Dave Roberts
and Paul Verrastro.  Dave is Vice
President of the Americas Cardiac and Vascular Group and Paul is Vice President
of Global Marketing Strategy.

Medtronic is the world’s largest medical device
company and contributes to human welfare through biomedical engineering.  The two Medtronic executives who will speak
Wednesday evening, will sketch-out the landscape of opportunities and pitfalls
that lay before would-be entrepreneurs who seek to advance the field of
healthcare through their start-up ideas.

This event has been made possible through the vision
and commitment of Ken Kousky, President of Bluewater Angels, Bruce Marble,
Executive Director of Isabella Bank Institute for Entrepreneurship, and Dr.
Sethu Reddy, Chair of Medicine at CMU’s College of Medicine.

We look forward to an engaging day later this
week.  Messrs. Roberts and Verrastro will
also present from noon till 2:00pm at CMU’s Health Professions Building.

It promises to be an enlightening day.

Source: http://bluewaterangels.com/healthcare-innovation-and-the-dynamism-of-michigan-entrepreneurs-through-the-mid-michigan-healthcare-innovation-partnership/

Private Equity

Biden win seen spurring rush to close M&As before tax hikes bite

‘There’s a real skittishness about the US election, which is fuelling some of the big M&A transactions coming to market currently’

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A Biden administration could trigger a new round of dealmaking as executives rush to close mergers and acquisitions ahead of corporate tax hikes, if power in the White House shifts to the Democrats.

If Biden wins the election on 3 November, he could disrupt the plans companies have made around the 21% corporate income tax rate by increasing it to 28%, which would drag on companies’ revenues, leaving them with less firepower to do deals.

In the short term, the prospects of these changes could “serve as potential catalysts for taxpayers to close M&A deals this year” Law firm Skadden said of the tax changes in a 22 October note.

Biden has been ahead in the latest polls — leading by as many as nine percentage points over Trump in the polls.

Global dealmaking already reached a record $1trn in the third quarter as confidence returned to boardrooms after a lull at the height of the pandemic in March. That number could surge further by the end of the year.

“There’s a real skittishness about the US election, which is fuelling some of the big M&A transactions coming to market currently,” the head of investment banking at one large US bank said.

Private equity groups could also try to cash in on their investments ahead of any tax changes, which would add even more dry powder — or uninvested capital — to the $2.6tn they have amassed, according to data provider Preqin, and are struggling to spend amid a scarcity of assets.

Todd Albright, chief revenue officer for software services provider and data firm Datasite, added the change in tax and trade policy under a new administration may represent an opportunity for some, especially private equity, to make investments now — before potential tax or other policy changes take place.

“A change in administration may also mean more use of taxes versus retaliatory tariffs as a cross-border business lever,” Albright said.

Concerns about changes in corporate tax during a Biden administration are top of the agenda in C-Suites, with 62% of business leaders citing it as a key concern in a recent PwC survey.

As well as the corporate tax increase, Biden has also proposed raising long-term capital gains tax to 39.6% for the highest earners, compared to Donald Trump’s plans to keep it at 20%. This would include carried interest payments for private equity executives.

This is a portion of future profits which is taxed at lower rates and forms the bulk of their compensation.

“The likelihood that US capital gains tax rates will be raised in 2021 will certainly spur some sellers to close deals by the end of 2020. This will clearly have a greater impact on private company deals,” Frank Aquila, global head of M&A at international law firm Sullivan & Cromwell, said.

Under both Obama and Trump, private equity executives have been given tax breaks on carried interest payments. “A more draconian approach can suppress deal activity,” said Cornelia Andersson, head of M&A and capital raising at Refinitiv.

“We’ve seen particular examples of this in the financial sponsor and PE-backed market where proposed taxation reforms affecting certain types of financing or carried interest may slow PE-backed acquisitions or even hawkish fiscal policy,” Andersson added.

Overall, Trump has been supportive of business. In 2017, Congress passed a Republican-backed tax law which helped companies build up acquisition war chests by removing obstacles to repatriating their overseas profits back to the US. According to the commerce department, companies made $776.5bn in overseas profits in 2018.

His first term in office has coincided with a rush in M&A activity — with the value of deals up by 62% compared with the number during the first four years of Barack Obama’s Democrat administration, according to Refinitiv.

“President Trump is viewed as being pro-business, although his administration has blocked or attempted to block several deals, citing antitrust reasons or national security concerns,” said Alan Wink, managing director, capital markets at tax consultant EisnerAmper.

Since Trump took office there have been over 500 withdrawn deals, or around 16% of the total, compared to 11% under Obama’s first term. In 2017, AT&T’s $85bn merger with Time Warner prompted Trump to claim the deal would place “too much concentration of power in the hands of too few.”

His Justice Department filed a lawsuit to block the deal, but the two companies were eventually given the go-ahead to complete their merger.

One year later, Singapore-based microchip maker Broadcom withdrew its $117bn bid to acquire Qualcomm, after Trump blocked the attempted takeover citing national security concerns.

Refinitiv’s Andersson cited President Trump’s 2017 executive order banning Chinese investment firm Canyon Bridge Capital Partners’ planned $1.3bn acquisition of Lattice Semiconductor, which sent a signal to Beijing that Washington will oppose takeover deals that involve technologies with potential military applications.

“In recent years, we’ve seen an increase in the scrutinisation of cross-border technology, infrastructure and data deals, specifically,” said Cornelia Andersson, head of M&A and capital raising at Refinitiv.

Trump has ramped up the rhetoric against China in recent months, offering tax credits for American companies that relocate manufacturing facilities to the US from China and encourage more investment at home.

Biden is seen by many in the industry to be more open to cross-border acquisitions, allowing US companies to freely expand abroad.

“Non-US buyers will be more likely to seek US acquisition targets and US companies will be more comfortable making acquisitions abroad without fear of a stinging tweet from the White House,” Aquila said.

To contact the authors of this story with feedback or news, email Paul Clarke and Lina Saigol

Source: https://www.penews.com/articles/biden-win-seen-spurring-rush-to-close-mas-before-tax-hikes-bite-20201028

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Private Equity

Pandemic pushes Deutsche Bank to go faster on plans to reduce office space

Deutsche is considering moving to a ‘hybrid’ model for its workforce of 86,984, according to chief executive Christian Sewing

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Deutsche Bank will speed up and increase its plans to slash office space as the Covid-19 pandemic has opened more opportunities for the German lender to cut costs.

The German lender will “accelerate and deepen” its plans to cut the size of its offices beyond the 25% target it set last year as the because of the “learnings” of the coronavirus crisis, its chief financial officer James von Moltke told journalists during the bank’s third-quarter earnings call on 28 October.

Deutsche is considering moving to a “hybrid” model for its workforce of 86,984, its chief executive Christian Sewing told a conference in September as the German lender seeks new ways to get its cost-cutting initiatives on track after pausing plans to cut 18,000 jobs across the organisation in March.

The bank’s headcount has increased for the past two quarters, and von Moltke said that employee turnover – people leaving the bank of their own accord – had slumped by half during the pandemic as new job opportunities have dried up.

Like most of its rivals, Deutsche paused job cuts at the height of the pandemic, a hiatus that last just six weeks as it looked to get its overhaul back on track. The bank has been looking for other ways to rein in costs, including shrinking its office space and cutting back on employee travel and the pandemic has presented new opportunities to strip out costs.

The bank is exiting its Wall Street office next year, and von Moltke said the bank has already offloaded 25 floors of the building ahead of the lease expiring next year, with the affected employees instead set to move directly into its new headquarters, One Columbus Circle.

Investment banks have been looking to shrinking their office space after the Covid-19 crisis forced thousands of employees into working-from-home arrangements. Deutsche, HSBC and JPMorgan are among the banks considering plans to keep a proportion of their staff working remotely permanently for a portion of the week.

Sewing added that the bank’s plans to cut jobs is a “glidepath to the future” rather than a particular target to cut a certain number of roles before the end of the year. Around 1,000 employees from Deutsche’s prime broking and electronic equities units have transferred across to BNP Paribas, which acquired the divisions, he added.

To contact the author of this story with feedback or news, email Paul Clarke

Source: https://www.penews.com/articles/pandemic-pushes-deutsche-bank-to-go-faster-on-plans-to-reduce-office-space-20201028

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Private Equity

EMH Partners raises €650m for second growth fund

The Munich-based firm plans to invest its latest fund in midsize companies across Germany, Austria and Switzerland that have what the firm calls high digital potential

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European firm EMH Partners has raised €650m for a new growth fund focused on midsize companies across the DACH region of Germany, Austria and Switzerland.

The Munich-based private equity firm’s second fund closed with nearly double the €350m it raised for a previous fund in 2017, despite some fundraising delays caused by the coronavirus pandemic.

“We were hoping to wrap up the fundraising earlier this year,” said EMH co-founder and Managing Partner Maximilian Kuss, who added that travel restrictions and remote due diligence slowed the fundraising process. “We lost a couple of months.”

The delay didn’t stop EMH from reaching the fund’s hard cap or attracting new limited partners, including ones in North America. According to Kuss, North American investors that hadn’t backed the firm’s first effort accounted for 25% of the capital raised.

The remainder came from European LPs, including ones in the DACH countries.

EMH’s portfolio held up comparatively well during the pandemic. As of the end of June, assets in its first fund were valued above their levels before the pandemic, he said. The firm also had no exposure to highly impacted industries such as travel or traditional manufacturing, according to Kuss.

EMH backs minority stakes in midsize companies in Germany, Austria and Switzerland, focusing on rapidly growing, profitable businesses with €50m to €500m in annual revenue, according to the firm’s website. The firm seeks to support technology-enabled businesses and to help digitise companies that lack tech-savvy.

EMH has already backed two deals out of the new fund, Avantgarde Gesellschaft für Kommunikation mbH and Liganova Group, according to Kuss. Avantgarde is a global brand management and marketing services company based in Germany, while Liganova Group is a German-based brand experience management company that helps retailers transform physical spaces into digital experiences.

Kuss co-founded EMH in 2010 alongside his brother Sebastian Kuss, who is also a managing partner at the firm. The brothers started and sold two technology companies while still attending university, reaping gains from both, according to the firm’s website.

Write to Isaac Taylor at Issac.Taylor@wsj.com

From The Wall Street Journal

Source: https://www.penews.com/articles/emh-partners-raises-e650m-for-second-growth-fund-20201028

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