Colonnade Advisors LLC

We recently published our Insurance Premium Finance Quarterly Update. Insurance premium finance is an attractive asset class for banks and independent operators alike. The asset class has a track record of consistently delivering attractive risk-adjusted returns with low credit losses. The short average term of the underlying asset allows lenders to efficiently reposition and reprice their portfolios. In an uncertain macroeconomic environment with rising commercial lines P&C premiums, borrowers are likely to leverage premium financing to better manage cash flow and liquidity, accelerating growth for premium finance lenders. Read the full report here: https://lnkd.in/eqTZYdYt #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #InsurancePremiumFinance

We recently published our M&A Quarterly Update. North American M&A activity was slow in Q1/2024, as inflation remained higher than expected and interest rate cuts continue to be pushed further into the future. Significant private equity dry powder remaining has kept sponsor M&A activity above pre-COVID levels, and there were some promising year-over-year trends in certain sectors. However, a full market recovery is not expected until inflation moves closer to the Fed’s 2% target and monetary policy eases. Read the full report here: https://lnkd.in/enSEFesf #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising

New-car inventory is improving across price segments, particularly in the sub-$30,000 range, providing relief for budget-conscious shoppers. The average new-car price has dipped below $49,000 for the first time in over a year, indicating increased dealer discounts and incentives. Entry-level vehicles are gaining market share, though still below pre-pandemic levels. With rising inventory and softening demand, new vehicles are spending an average of 65 days on lots, pushing prices down. However, used vehicles under $20,000 have significantly higher mileage compared to pre-pandemic models. On the other hand, used EV prices have dropped nearly 20%, driving a 30% increase in consumer demand. The report also highlights insights such as EV incentives impacting pricing, the fastest-moving car brands, and consumer review trends on the platform. Source: https://lnkd.in/eNT2UH4s #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #FandI #Auto #EV #Sales

We recently published our Equipment Finance Quarterly Update. Deal volume picked up slightly in Q1 24 as portfolios continued to reset to current interest rate levels. While charge-offs remained higher than normal compared to pre-COVID figures, the decline in delinquencies indicates that charge-offs are likely to return to more normal levels in the upcoming months. Lenders also remain optimistic that the Fed will cut rates in Q4 of this year, reversing interest rate compression on their portfolios. The positive trends in the equipment finance industry drove an increase in ELFA’s Monthly Confidence Index, which surveys key industry executives. Read the full report here: https://lnkd.in/eN5sVGWK #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #EquipmentFinance

I will be attending the 2024 NHSCA Home Warranty Conference to meet with industry professionals. The event will be held June 10-12, 2024, at Renaissance Hotel in Nashville, TN. Please reach out if you would like to meet during the conference: mmagee@coladv.com. There’s still time, register here: https://lnkd.in/ev5wcx9b #NHSCA #HomeServiceContract  #HomeWarranty

In April 2024, wholesale prices for used vehicles dropped compared to the previous month and the same period last year. The Manheim Used Vehicle Value Index fell by 14.0% year-over-year to 198.4. Depreciation rates were higher than usual, with vehicles losing value faster than in past years. Luxury vehicles saw the smallest decline (12.9%), while compact cars had the most significant drop (17.6%) in prices compared to last year. EV values fell more sharply (17.5%) than non-EVs (13.1%) on a seasonally adjusted basis.   Retail sales of used vehicles were estimated to be 4% lower than in March but 9% higher than the same period last year. Despite fewer sales, the average listing price for used vehicles increased by 2% over the month. New car sales also declined by 3.3% compared to the previous year, with a sales rate of 15.7 million units for April. Consumer confidence decreased, showing mixed sentiment about purchasing vehicles due to rising gas prices, which reached $3.66 per gallon nationally in April, impacting the overall economic outlook.   Source:  https://lnkd.in/eukGBskW #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #Vehicle #Auto #Automotive #AutoMarket #AutoWholesale #UsedVehicles #Manheim #CoxAutomotive

In April, wholesale used-vehicle prices saw a decline compared to March, marked by a 14.0% drop in the Manheim Used Vehicle Value Index (MUVVI) from the previous year. This decrease, magnified by seasonal adjustments, reflected a broader trend of falling prices, with major market segments experiencing year-over-year declines. Retail used-vehicle sales dipped by 4% from March but showed a 9% increase compared to the previous year, accompanied by a 2% rise in average retail listing prices. Concurrently, consumer confidence took a hit in April, with declines across various indices, affecting perceptions of buying conditions for vehicles amidst rising gas prices. These shifts underscored a complex interplay of market forces influencing both wholesale and retail aspects of the automotive industry. Source: https://lnkd.in/eukGBskW #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #Vehicle #Auto #Automotive #AutoMarket #AutoWholesale #UsedVehicles #Manheim #CoxAutomotive

The private credit market is undergoing rapid growth, prompting closer scrutiny from the International Monetary Fund (IMF), according to a report by Pensions & Investments. Private credit, which includes loans to non-public companies, has expanded significantly in recent years, raising concerns about potential risks. The IMF warns that this market's lack of transparency and oversight could pose systemic risks to the financial system. Despite its potential benefits, such as providing capital to small and medium-sized enterprises, the IMF emphasizes better regulation and supervision to mitigate risks. This call for increased vigilance underscores the importance of monitoring the private credit market amidst its burgeoning expansion. Source: https://lnkd.in/egJEGiqh #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #PrivateCredit #CommercialFinance #Lenders

We recently published our F&I Products Quarterly Update. New light-vehicle sales (SAAR) increased in the fourth quarter of 2023. Total vehicle registrations were up 2% through Q4 2023 compared to 2022. We relied on the excellent Experian report/data for much of this information. Selling F&I products with new and used vehicles is a proven path to increasing dealer profits. The total Vehicles in Operation (“VIO”) in the F&I sweet spot grew 3.6% in Q4 2023. There were six 2023 Q4 M&A transactions in the F&I products industry. Read the full report here: https://lnkd.in/eg_gRx5k #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #FandI

The auto industry was responsible for 17% of global microchip purchases in 2023, up 3% year-over-year, according to World Semiconductor Trade Statistics (WSTS). This puts it ahead of consumer electronics and industrial sectors, behind only communications (32%) and PC/computer (25%). As vehicles become more complex, the need for chips has grown, with today’s cars containing between 1,000 and 3,500 microchips, according to the Semiconductor Industry Association.   Chip production delays continue to challenge the auto market despite the rising demand. The semiconductor shortage of the past few years has eased significantly, but many auto manufacturers still need to prioritize where chips are deployed. As Sam Fiorani, VP of Global Vehicle Forecasting at AutoForecast Solutions states, “Automakers are working around shortages by eliminating an option or a feature. Nonessential features such as heated steering wheels might be cut from certain models.” #InvestmentBanking #MiddleMarket #Finance #MergersAndAcquisitions #PrivateEquity #CapitalRaising #Automotive #Microchips #ChipShortage #Semiconductors #Technology