Becker Private Equity & Business Podcast
Weathering the Private Equity Slowdown: Insights from Rick Kes of RSM 5-5-25
Mon, 05 May 2025
In this episode, RSM Partner Rick Kes joins Scott Becker to discuss the current lull in private equity deal flow, the impact of market uncertainty, and why leadership, adaptability, and business fundamentals matter more than ever in a volatile environment.
Chapter 1: Who are the hosts and guests of this episode?
This is Scott Becker with the Becker Private Equity and Business Podcast. Thrilled today to be joined by RSM partner, Rick Kess. Rick, so many different things going on in the private equity world. A big deal announced today for Skechers, a $9.4 billion deal. That's a welcome positive after a quarter that seemed very slow on deals.
Apollo, their CEO says in an interview that they've largely been on deal pause for a little bit. What is the reading of the tea waves? What are you seeing at RSM in terms of the deal world? And what can we expect?
Chapter 2: What are the current trends in private equity deals?
Yeah, I mean, Scott, I think, you know, obviously the deal world's been a little slower than anyone would probably like it to be. Lots of reasons for that, obviously. You know, we've got interest rates, you know, higher than we would normally like them to be. We've got, you know, political uncertainty, things of that nature.
Chapter 3: How is the healthcare sector influencing private equity?
Obviously, I think people that listen regularly know I follow healthcare the closest, and healthcare's got a lot of headwinds between Medicaid changes and other things that might impact the healthcare world, especially in the services sector. I think there's a lot of headwinds in that respect. I think a lot of us are still thinking at some point, big deals have to happen.
You mentioned this deal today with Skechers and other deals. I think with the amount of capital that's available to be spent. And then, you know, the hold period that some of the investments are at, you know, in terms of what happened in, you know, 19 and 20 and 21, you know, with the deal flow volumes that we saw then, a lot of those kind of are at the hold period end.
Chapter 4: Why is there a slowdown in deal activities?
So you'd think at some point, some of these assets will start trading again, and some of these funds will put their capital that they have available to use. But at what point that might be, it's hard to tell.
I mean, unless you have a crystal ball, I guess, you know, so, you know, I think, I think we'll continue to kind of work on, you know, being prepared when, when that deal full volume kind of opens up, if the spigot opens up, so to speak. And then, you know, I think at this point we're still kind of waiting for that to happen.
Chapter 5: When might the private equity market rebound?
Thank you. And what do you sort of see in terms of, of sort of opening up, starting to get going again and, What is your sense? Are you starting to hear more rumblings of it as the stock market returns? Are people feeling a little bit more confident? Or what do you see?
Yeah, I mean, obviously the public markets inform people just because of the availability of data, right? People can access it, they understand it, they see it on the news, everything, you know, it's right in front of you all day long. So, you know, I think the public markets influence sentiment, they influence lots of things. So,
Chapter 6: How do public markets affect private equity sentiment?
I think as the public market continues to hopefully recover from the turmoil we saw during the last couple of weeks related to tariffs and other things, I think that will create better sentiment, which will obviously just hopefully change the mindset of a lot of people. But I think because of that, you'll see hopefully some recovery, some rebounding. But I do think the other part too is just,
Timing is everything. And, you know, as we see these, you know, negative news stories come out, you know, as time elapses, people start to forget about it or we start to understand what the real impact is and not just rely on kind of the news headlines. We see like, OK, well, if tariffs went up, what happens to the price of this product or that product?
Chapter 7: What strategies can businesses adopt during market uncertainty?
instead of uncertainty, now we have certainty. We start to know, we start to figure things out, we start to realize how we can adapt. And I think the successful businesses will adapt quickly and hopefully be prepared to move forward with things that they were originally planning on doing. So again, I think these times, just like any times, we talk a lot about
when deal flow isn't happening, focusing on your business model, focusing on your efficiency and focusing on becoming the highest grade asset you can be, I think in addition to focusing on those things, also focus on being nimble and understanding how to adapt and change to the economy as it continues to change because those are the companies that are likely to be the most ripe for sale are those that can prove that they're
their ability to adapt is a market differentiator against their competitors.
Yes, and you mentioned something about the headlines. The headlines cause all kinds of turmoil, and then things sort of seem to calm down. How do private equity funds, buyers, sellers, sort of filter through that noise so they stay calm and keep on trying to put money to work and build businesses?
I mean, I think that's the definition of success in some respects is to, you know, I think a good leader can lead their team through that turmoil, right?
You hear something, you know, I hear a bad news story or something, maybe even something that's impacting your sector, say you're in healthcare services and you hear all these news about potential cuts to Medicaid and maybe you're heavily relying on Medicaid. If the leader of your company or the leader of your PE group is telling you, hey, We're going to get through this.
We're going to move forward. We're going to find a way to be profitable even under reduced reimbursement rates or something. If the leader of your group is telling you that and making you feel that that's accurate and that you can achieve those goals, well, then, you know, that's how you succeed in the business. So I think it all comes down to good leadership, really.
And a lot of it is staying calm under pressure. I mean, I know that, for example, I've been through this bug enough for 30 plus years that when one of my kids or colleagues asks me, oh, my goodness, should I sell my stock because it's all tanking right now? I've at least been in this long enough to know don't sell into the dip.
And I think it's the same thing for private equity leaders that have been in this for long enough time to know it's going to be up, it's going to be down, but it's going to be okay. So try and hang tough a little bit and we'll keep on moving forward.
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