Becker Private Equity & Business Podcast
Economic Trends and Private Equity Insights with Rick Kes of RSM 6-2-25
Mon, 02 Jun 2025
In this episode, Richard Kes, Partner at RSM, shares key insights on inflation, interest rates, job markets, and global trade trends.
Chapter 1: What key economic trends is Rick Kes observing?
Hello, and welcome to the Becker Private Equity and Business Podcast. My name is Chanel Bunger, and today I'm excited to speak with Rick Kess of RSM, who joins us regularly to share insights on economic trends he's keeping an eye on. Rick, thank you, as always, for joining me. Why don't you take it away and tell us about some of the things you're seeing out there?
Yeah, well, thanks, Chanel. Appreciate being on the call, as you know. I'm a partner at RSM, and at RSM we focus on the middle market, which private equity tends to invest heavily in. A large percentage of our work as a firm is somehow related to private equity groups as well as their portfolio companies.
I think a lot of our corporate infrastructure is really designed to try to identify trends and opportunities that we're seeing within the private equity ecosystem. You know, I think we think about things kind of from, I'd say, starting at the highest level from an economist or economics perspective.
And, you know, when I talk to our economist team, their focuses tend to be kind of heavily square on jobs, inflation, interest rates, and now, you know, really global impacts related to tariffs and things of that nature. You know, so when I think about those things for our clients, you know, I think when we've had these calls, I think over the last few years, we've been doing this podcast.
And for many, many parts of those years, the jobs environment was probably the toughest part of the conversation for many of our clients was just really finding the talent that they needed to grow and to execute on their strategies. And I think for many of our clients, the talent part of the problem has sort of maybe became less of an acute issue.
Maybe not so much in areas where you have really highly skilled professionals. As you know, Chanel, and obviously Scott knows this, that I follow healthcare the closest. And I think some of the job displacement there, whether it be nursing or nursing,
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Chapter 2: How does inflation affect private equity investments?
know physicians or other you know highly skilled individuals those problems still sort of persist but outside of the you know highly skilled environment you know you're starting to see a little bit of easing on the jobs front interest rates obviously still elevated beyond a point of that where they were you know in the past and especially during the zero interest rate environment that we kind of got to see through you know most of the post-pandemic period you know so that is obviously a drag on kind of deal flow and activity
Chapter 3: What are the current challenges in the job market?
And, you know, really uncertain in terms of where that might go over the next, you know, six to 12 to 18 months. But doesn't seem like a lot of change in the near future there. You know, when it comes to inflation, I think there's been some news of late that inflation may be cooling a bit again. And, you know, obviously that's good news in the overall perspective, you know, as we manage inflation.
Chapter 4: How are interest rates impacting deal flow?
operating expense and other things that obviously hit, you know, kind of EBITDA, which obviously drives valuations and all those types of important metrics for our private equity backed companies. And now we're entering kind of a new era of things to kind of monitor. And that's obviously the global trade conversation around tariffs and other things of that nature.
Chapter 5: What is the outlook on global trade and tariffs?
And I think with all those things, there's good and bad that come out in the news cycle almost every day on all four of those topics. But most of our clients continue to be a little bit uncertain in terms of what the next six to 12 months looks like and whether or not they'll be able to execute on any of their growth strategies other than their own organic growth.
Those types of opportunities still exist. A lot of our clients are very, very focused on trying to do as much as they can within the four walls of their business without having to do an acquisition or anything of that nature to necessarily grow.
But obviously, most of our private equity companies have seen success in the past by buying other companies, putting them into a platform, and then really spinning up kind of a larger platform for the next turn of that transaction cycle. So
I think although there is opportunity to really focus inward and really optimize and manage what we can manage within the four walls of our company, we're also really optimistic that over the next six or 12 months, some of those other economic factors could probably change a bit. Interest rates probably being the one that would have the greatest impact to our deal flow of our clients.
But also the uncertainty related to the global economic importance. I think those things could really, as we continue to kind of mature through those cycles, understand how they impact our businesses and really
hopefully enable the opportunity for inorganic growth through M&A, which will obviously fuel the private equity community at large to really be able to kind of execute on some of the growth strategies that they've had.
So again, that kind of gives you a little bit of how we think about things from like kind of a blocking and tackling perspectives, the areas that we focus on the most and kind of how we kind of develop our data forward kind of perspectives around those four areas using really a kind of an economics view of the business cycle.
Perfect. Well, Rick, I want to thank you as always for joining me today and sharing your insights on the Becker Private Equity and Business Podcast. Looking forward to getting more updates from you as the year progresses. Thank you so much.
Thank you.
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