Jeff Horowitz, global head of real estate, gaming and lodging for Bank of America Merrill Lynch, joined REIT.com for a video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Horowitz joined Bank of America Merrill Lynch’s Real Estate Group in 2005 and covers a broad range of public and private companies as well as works on mergers and acquisitions, public and private capital raising and general corporate advisory transactions.
He spoke about the REIT deals taking place, specifically those in the various subsectors of the health care industry.
“This is a space that has performed very well throughout the cycle,” Horowitz said. “The companies have had very strong balance sheets, they paid their dividends and their stock prices went up. That’s all a great backdrop to have a successful acquisition story.”
In addition, Horowitz added that unlike many other spaces, when health care company’s buy a company often times the original company may continue to manage the portfolio.
“This is a space where we’ve had some very strong CEOs that have had confidence and conviction in their vision in terms of growth and in terms of when to really push on the accelerator in this marketplace. Their stocks have been rewarded and hence they have repeated the cycle and done many acquisitions again and again,” he said.
When it comes to the IPO pipeline, he explained that he’s not necessarily surprised by the relatively small amount of activity we have seen in 2012.
“We are not going to see a return to the mid 1990s where 20 or 30 companies go public per year,” he said. “We are going to see a more mature marketplace that we work within where we may see a handful of companies each year depending on the moment.”
However, Horowitz added that there may be some large portfolios of companies that went private that may go public again.
“I do think when you look forward you’re going to see this continuation of large-scale, high-quality companies coming back to the markets just because so many went private in the 2005-2007 time period,” he said.
Horowitz also discussed the capital markets and said 2012 was a year of record issuance in almost every product type.