At M&A SoCal, Dealmakers Emphasized Connection, Inclusion and Modernization

Bridging the Political Divide

In support of that tailwind, M&A SoCal invited guests to catch a variety of panels in between DealSource meetings and networking. Much of the event’s programming focused on the value of overcoming differences, building connections and promoting cooperation, in M&A dealmaking and beyond.

The event’s keynote on Tuesday, Sept. 17, for example, featured political consultant Mary Matalin and political strategist and analyst Donna Brazile (with Scott Kolbrenner, a managing director in Houlihan Lokey’s Business Services Group, moderating) for a political discussion on the importance of reaching across the aisle and acknowledging commonalities in today’s polarized environment.

Regardless of political affiliation, Matalin and Brazile, longtime friends despite political differences they may have, both emphasized the importance of finding common ground and “merging cultures” to promote progress together—much the way dealmakers must do when merging businesses, they remarked.

Building Connections Through Inclusion

The theme of building connections was also present during the day’s “Diverse Investment Manager Perspectives” panel, which explored how dealmakers can promote diversity within their own firms.

Moderated by American Discovery Capital Managing Director Anna Halloran Jacob, panelists conversed on a variety of topics surrounding DEI (diversity, equity and inclusion) initiatives and ESG (environmental, social and governance) investing.

Middle-market investors—particularly limited partners—have grown more varied in how they approach ESG, but panelists agreed diversity and inclusion remain essential components to successful leadership hiring, value creation and other aspects of dealmaking.

“In my eyes, our panel showcased the diverse approaches to value creation across fund managers,” panelist Marlo Goldstein, principal at Marlin Equity, tells MMG, adding that the M&A backgrounds of each panelist were varied, spanning traditional buyout firms, impact investors and international growth equity. Yet they all shared similar views on how diversity can drive value through initiatives including “smart hiring, impactful advisor networks, strategic M&A, targeted operational improvements” and more. “It was refreshing to see that our shared approaches outweighed the differences in fund strategies and structures,” she adds.

Panelist Astrid Soto, a private family office chief investment officer, acknowledges the “negative reputation” that ESG investing has developed in recent years as merely a check-the-box practice for some. Yet she says the core intent of ESG investing has widespread applicability, even for dealmakers who may not consider themselves impact investors. “We argue that all investments should aim to make some level of positive contribution,” she says.

A global hiring strategy is one particularly effective way to drive inclusivity within the investment community, adds Soto, noting that hiring talent from remote regions and younger professionals hungry to learn “has allowed us to build a diverse, resilient and ambitious team capable of achieving meaningful impact.”

Soto and Goldstein were joined on stage by panelist Hope Mago, a partner at HCAP. The panel was sponsored by American Discovery Capital and hosted by ACG Los Angeles DEI Committee chair Cornelia Cheng. 

The Future of AI in Dealmaking

Embracing diversity is part of a broader push within the investment community to modernize, says Soto. While family offices and strategics have “flexibility and creativity” to weather market uncertainties and changes, private equity “must evolve to be more agile,” she says.

“The norm of easy money and stable growth is gone,” says Soto, “forcing investors to demand more agility and stronger returns.”

M&A SoCal’s “Accelerating Market Mapping and Industry Knowledge with AI” panel highlighted another strategy some PE firms are deploying to promote modernization and agility. The panel featured Texas Capital Chief Information Officer Don Goin and Cook M&A Director of Research and Strategy Sarah Shizas to discuss how their firms are using artificial intelligence and the ways M&A dealmakers must take caution with the technology.

Privacy concerns should be top-of-mind for firms considering adoption of AI, as many large language model (LLM) and other AI and machine learning model platforms use input and data from users to further develop their solutions. Panelists also acknowledged the limitations of AI solutions that often still require human oversight and intervention to ensure that outputs are accurate.

Still, the panel highlighted the opportunity for AI solutions to significantly accelerate what would otherwise be time-consuming manual processes. For instance, instead of manually aggregating shortlists of potential acquisition targets, automated tools can collect that information from a variety of data sources, freeing up human capital for the more strategic process of analyzing that list based on clients’ investment goals.

Today, AI’s capabilities remain somewhat limited in the context of M&A, experts said. As the technology continues to evolve, though, private equity firms, investment banks and other M&A partners may continue to grow more comfortable deploying AI to accelerate manual tasks, driving efficiency in a dealmaking climate that increasingly demands agility and speed.

The AI panel discussion was sponsored by Sourcescrub and moderated by Sourcescrub CTO Jonathan Dodson.

Carolyn Vallejo is Middle Market Growth‘s Digital Editor.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.