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The Results to Semaphore's Annual Confidence Survey Are In!

Semaphore's 2017 Semaphore Confidence Survey Highlights

All Trump. All the time. Why should the PE community be any different?   The often virulent opinion directed at the President and attendant fears about the capacity of the White House team appears to have no deleterious personal effect on our brethren.  Despite being frightened about Trump our respondents are highly secure about doing well professionally, despite their White House fears. 

The 9th annual Semaphore Confidence Survey is nothing if not entertaining and has enjoyed a reasonable level of accuracy.  While some fear goose stepping brown shirts, “So....this is what Nazi Germany felt like in the beginning.” And, with apologies to Neil Young, “Only Trump can break your heart...and the national will,” we hope neither of those comments proves true.  Last year’s survey showed a trend where, for the first time, our colleagues were reporting not only that they earned less in 2015 than the year before but that they expected their income to go down once again in 2016.  Nope.  80% reported they earned more in 2016 and fully 76% expect to continue that upward trend.  

And apparently Trump will remain good for the 1%.  Sticking to personal income, 57% believe personal income tax rates will drop in 2017 and a full 70% are certain a drop in corporate income taxes will follow.

Notwithstanding Trump’s oft repeated campaign trail pledge to end the currently favorable tax treatment of Carried Interest income only 22% believe he will fulfill that promise. If those 78% are right there is little doubt that the prediction of increased personal income, coupled with drops in corporate and personal income taxes will afford a true personal triple witching hour. No wonder 93% are confident in themselves.

That confidence is shared with few other people or institutions. While President Obama fared extremely well (78% on the confidence scale) his successor only had a 22% confidence score, with 61% not confident.  For some reason, our perennial last place finisher in the confidence polls is Congress (67% no confidence) enjoyed a 21% confidence vote which is 4 or 5 times its usual scoring.

Our respondents continue to be blunt and one of my favorite comments this year was full of industry hubris “Industry, not the president, will continue to create jobs and economic vitality in many sectors.” They present very certain opinions such as “2018 is when the wheels start coming off the bus,” while believing that “2017 will be the year of M&A/IPOs.” Hello Snapchat.

Sectors of investment remained essentially static. Health Care, Enterprise Software, and Financial Services are #1, #2 and #3 in 2016. Those three sectors remain the top three targets of investment in 2017 with Consumer Products and Entertainment breaking into the top 5

The distribution of respondents in the US changed only slightly from past years - the  top six states were 34% California, 21% Massachusetts, 19% New York, 5% Connecticut and 5% Texas. Washington DC 4%, Pennsylvania and Illinois came in at 3% and no other state represented more than 1%.

The UK represented 31% of international respondents, 15% Canada, Germany 9%, China 2% and 2% France, with multiple respondents from Australia, Singapore, the Philippines, Brazil, Russia, Japan, Peru, Spain, Viet Nam and single responses from11 other nations.

Of those who participated this year 30% were from PE shops; 26% were VCs; 7% were LPs; 9% were operating executives; 11% were Investment bankers; and 17 % were third party vendors/advisors to the industry (lawyers, accountants, etc).

Our second year of gender queries showed slightly more diversity with   81% male (89% last year) and 19% female (11% a year ago).

Last year our group overwhelming predicted the correct finalists for President even before the primary votes started.  However, Fully 83% believed Clinton would win the election. Someone I know walking the woods of Chappaqua, NY wishes our colleagues were correct…alas.

I have no better answer for my annual question of what does it all mean. We’ll find out together next year.  If you have time to tear yourself away from getting richer in the face of Armageddon please review and analyze the full results and read many of the comments by clicking here

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore, www.sema4usa.com, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eight funds, is a New Markets Tax Credit provider and advises Limited Partners around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Semaphore

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