Industrial Growth | Fourth Quarter 2013

February 2014 – This quarter, we provide our insights on the industrial growth market, which continues to experience favorable returns and sector activity. Manufacturing activity is reaccelerating as the Institute for Supply Management’s global Purchasing Managers’ Index (PMI) is at its highest level since Q1 2011. High cash balances, moderate commercial and industrial loan volume growth, and attractive equipment leasing activity all support higher end demand for the industrial production sector. In the equity capital markets, all seven sectors of our Industrial Growth Universe generated positive returns for the quarter, while two sectors ‐ Electronics & Components (quarterly return of 13.6%) and Plastics & Packaging (10.3%) ‐ outperformed the S&P 500, which had generated a 3‐month return of 9.0%. Sector acquisition activity for the quarter rose to 186 transactions, up from 159 in Q3 2013, while transaction value dipped slightly from $11.8 billion last quarter to $10.6 billion due primarily to fewer large cap transactions being completed prior to year-end.

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