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Semaphore's 2019 Surprising Survey Responses

I’m not surprised very often.  I have to admit to being shocked by some of our results this year. This is labeled a Confidence Survey.  Other than in isolated cases (mostly about our politicians and their institutions) you have been supremely confident these past eleven annual reflections. For more than a decade the results about our national and international economy have generally been in a narrow range of reasonable confidence.  Not today.

Our respondents were only half as confident in the US national economy as the year before with just 37% expressing such as opposed to 76% last year.  More alarming is that by a factor of more than five some 41% specifically stated a lack of confidence in the economy compared to only 8% feeling negatively  a year ago.  Confidence in the International economy fared even worse with only 13% expressing confidence as opposed to 69% last year.  53% specifically noted a lack of confidence overseas compared to a 4% response last January.  Ruh roh.

Is this an early warning that compels behavior change as investors?  Maybe, seems the answer. Real Estate investment broke the top five of intended investment markets for the first time in our survey history.  Crypto/Blockchain joined the other usual leaders of software and health care in intended deal flow for 2019.

Despite impending economic doom our respondents remain confident in themselves with 93% remaining sure of their own skills backed up by 75% certain they will earn even more personal income next year than last (where  61% reported earning more last year than the 2017).  Is this simple hubris given the huge downturn in general economic confidence or are continually rising incomes for our industry compatriots just baked into the advantages of the profession? Reflect that 41% reported the Trump tax cuts advantaged their personal income while 72% said that same corporate tax policy did not influence a single judgment they made.

Speaking of Trump, there was more bad news for the president given that his lack of confidence number rose 7 points to 81%.  Politicians are by and large not very popular although Obama was an anomaly when in the past more than 70% expressed confidence in him. New Speaker Nancy Pelosi had a 41% confidence rating, almost twice as high as then Speaker Ryan last year and nearly 4 times higher than Senate Majority Leader McConnell today.   

If our survey takers know anything it is politics. A year ago you proved prescient with a super majority predicting that the Democrats would take the House.  By similarly large margin, 79% believe that the president will remain in office through the end of the year despite your lack of confidence in him and his national economic team. One commenter noted, “Lies turn into crimes and cost him taxpayer paid housing. He may earn fully paid housing in a federal prison - he at least deserves the latter.” Many equally strong opinions were expressed along with political tactics pro and con.

In this #MeToo year our industry continues to at least recognize it remains wildly deficient with 88% agreeing that sexual misconduct, harassment and gender bias is an industry problem. We even had a confession of such behavior – but while recognition is appreciated he (presumably a male) declared “I'm guilty of it. Not proud of it but trying to change my abuse of the power dynamic.  I can’t honestly promise I will succeed.”  The question continues to be left hanging is what to do about it.  One simple answer preferred was “Just be a normal human being.” This question garnered the largest response in commentary ever in the history of our survey. Many representative comments are highlighted in the accompanying documents detailing responses Click here to read.  

The distribution of respondents in the US changed from past years - the  top six states were 21%   from New York (vaulting into first place displacing California for the first time); 20% California, (down from 33%  a year ago); 19% Massachusetts; 6% Texas and 6% Connecticut; with DC, Pennsylvania and Illinois coming in at 5% each.

The UK represented 21% of international respondents (down from 31% - maybe  folks fleeing prospect of Brexit); 17% Canada; 7% Germany; 7% China; and 2% from both France and Italy, with multiple respondents  in descending order from Australia, Singapore, the Philippines, Taiwan, Brazil, Russia, Japan, Israel, Columbia,  Spain, Viet Nam and single responses from 9 other nations.

Of the record 604 respondents  who participated this year 30% were from PE shops (double last year’s number); 21% were VCs (down 10 points); 9% were LPs (down from 14% last year); 10% were operating executives; 9% were Investment Bankers; and 21 % were third party vendors/advisors to the industry (lawyers, accountants, etc.).

It’s difficult to interpret what our results really mean but the severe lack of confidence in the economy portends a potentially rough ride.  We’ll all find out in the next 11 months and you can count on us polling you once again next year. Long time readers will be amused by the return of one commenter after a few years’ hiatus who once threatened to murder his boss.  This time he makes an odd admission.  Please take some time away from the usual deal terms and spreadsheets to review and analyze the full results yourself and be entertained – and perhaps informed - by many of the comments made about sexual misconduct, President Trump, and our industry in general by clicking here.

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore,, 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 nine  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, Survey

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