Industrial Growth | First Quarter 2014

May 2014 – This quarter, we provide our insights on the industrial growth market, which continues to experience favorable trends despite recent weak results in the somewhat overheated equity capital markets. Economic indicators have improved this spring as the labor markets have shown positive signs with lessening unemployment strains. And, according to the Federal Reserve, banks are seeing stronger loan demand and industrial output, which have shown positive increases for two consecutive months (February and March). The equity capital markets experienced sluggish returns, as only two of the seven sectors of our Industrial Growth Universe generated returns in excess of that of the S&P 500 (+2.9% for the quarter) ‐ Electronics & Components (+4.7%) and Chemicals (+3.4%). M&A activity for the quarter rose to 221 transactions, up from 186 in Q4 2013, while transaction value dropped significantly from $10.6 billion last quarter to $3.7 billion due to the numerous small‐cap spinouts and dispositions.

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