Five Questions With: Jeff Mortimer

JEFF MORTIMER is director of investment strategy at BNY Mellon. / COURTESY BNY MELLON
JEFF MORTIMER is director of investment strategy at BNY Mellon. / COURTESY BNY MELLON

Jeff Mortimer is director of investment strategy at BNY Mellon Wealth Management.
Mortimer, for more than two decades, has designed a data-driven model to track economic and stock-market cycles. He recently gave a presentation at the University Club in Providence detailing how the model can help guide business owners in the decision to either buy or sell a business.

PBN: Can you tell our readers a little bit about how your model helps business owners think about mergers and acquisitions?
MORTIMER:
It gives a nice window into where the public markets are and how that applies to one’s business. Linking the two up helps a business owner – who may not have any money invested in the stock market at all – watch how the market influences behavior. Should they add more staff? Should they feel comfortable selling their business in today’s world? Should they feel comfortable buying someone else’s business? Here’s a way to view the market with complete rigor and that’s where it’s been helpful. It’s an unbiased window into the link between public and private.
PBN: Last year was a banner year for M&A activity, what does that mean for business owners this year?
MORTIMER:
The banner window that was open for 25 months closed Aug. 25 [last year]. Now buyers and sellers have equal skin in the game. That’s all that this means. The public market changes, the private market changes, so the allocation for our clients changes, but for the business owners it means that your ability as a seller to name your price and sit around and wait for multiple offers, that window closed. Now it’s going to be a tougher sale, it might not be quite the price that you would have gotten, or the multiple you would have gotten … those frothy days ended last summer.
PBN: How has the public equity market impacted M&A activity this year?
MORTIMER:
You look at the data and it shows the drop-off in M&A took place in the fourth quarter of last year. In January of this year, there were no public IPOs in our equity markets. None. And IPOs are now just beginning to come out after having really gone dormant for the past year.
PBN: How about volatility?
MORTIMER:
The volatility that happened in the equity markets scared people in the private transaction sector.
PBN: What’s your take on the current state of inflation?
MORTIMER:
You’re getting some wage pressure right now in the cycle. I also look at velocity of money, [which] continues to be dormant. Those are the two drivers of inflation historically, and while I continue to look at velocity of money and consider that an important variable that has been very favorable to low inflation, wage inflation is beginning to show some signs of awakening, which will help the employee, and give them a little more power. People are leaving jobs, people are finding other work, and higher pay, and you’re starting to see that take place and show up in the data.

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