Andrew Milgram

So if the public market, on average, has a mid-teen starting EBITDA margin, in the middle market, we're talking about mid-single digits.

So there's just less room for maneuvering, less room for error.

Those companies do also tend to have structurally constrained or more difficult balance sheets.

So they're strapped up more by their lender.

Middle market tends to access bank finance rather than, let's say, broadly syndicated loans or private credit, which will have more flexible covenants and characteristics to the credit agreements.

So it's a tighter, less flexible capital structure they're starting with.

When we look at cashflow in those two areas, we see net profits after tax in the public market strong, persistently growing.

When we look in the middle market, we see that that net profits after tax is down almost 200% over the measurement period.

So that is consistently negative over the past two years.

It's a troubling place for the middle market.

And like I said earlier, there's this nagging feeling that everyone has that there's trouble in the economy.

What we do in that data set is put some numbers to that.

We can illustrate to people, look, we understand what you're seeing in the ticker tape economy.

We understand what you see when you turn on Jim Cramer and he's screaming about it's a buy, buy, buy.

But we also understand that when you go home at night and you're thinking about the world, you have this feeling that things are tough.

Who owns them?

It's a mix.

It tends to be smaller sponsors, families, some individuals.

These are companies that a lot of the management teams have grown up inside the companies.

Maybe there are families that control them, maybe not.