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Healthcare Services | Fourth Quarter 2014

February 2015 – With more than $386.7 billion and 1,256 deals, 2014 healthcare M&A volume was the largest in this century, according to preliminary figures from Irving Levin Associates, Inc. The combination of robust levels of private equity (over $1.2 trillion dollars committed to private equity funds as of Q4 2014, according to Preqin) and favorable credit markets helped spur deal activity during the year. For global institutions, the favorable corporate tax rates for companies domiciled overseas accelerated transaction volume.

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Business Services | Fourth Quarter 2014

February 2015 – After underperforming for much of 2014, the SCA Business Services Index outperformed the broader markets in Q4 2014, increasing by over 11.2 % compared to an increase of 5.8% for the S&P 500. Virtually all subsectors of the SCA Business Services Index outperformed the broader market as a result of consensus predictions of enhanced economic growth in the U.S. during 2015. In particular, the SCA Marketing Services sector (+29.6%), the SCA IT Consulting sector (+16.9%), and the SCA Professional Staffing sector (+11.6%) recorded significant growth.

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Industrial Growth | Third Quarter 2014

November 2014 – The industrial sector is beginning to face some cyclical headwinds as market indicators are sending a range of mixed messages with respect to expansion or contraction. Certainly, to the positive, the latest ISM Report reflects strong growth with a composite index for October of 59.0 vs. consensus of 56.0 and a September mark of 56.6. This matches August’s level and is the strongest since February 2011. Conversely, the PMI Manufacturing Index came in at 55.9, below both consensus (56.1) and last month (57.5). Key to this report was (i) new business as monthly growth slowed to its lowest rate since the severe winter weather in Q1, (ii) slow export sales, and (iii) little increase in total backlog orders. Given the mixed readings, the sector, predictably, is experiencing cyclicality in light of the pockets of positive momentum and declining input costs, such as oil, which are offset by rising geopolitical instability, concerns of overbought equity markets reaching new all-time highs, and a search for sustainable drivers of growth.

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Capital Restructuring | Third Quarter 2014

November 2014 – In this edition, we provide our third quarter 2014 perspectives on the restructuring market. Default rates reported by Moody’s and S&P held relatively steady during the Third Quarter 2014, remaining low at 1.7% and 1.6%, respectively. With some indications of strengthening economic conditions, few corporate defaults are expected in the near term. Loan investors who responded to a recent survey predict loan default rates will remain low for the next 12 months in part because low amounts of debt are coming due in the short term, U.S. companies as a whole are expanding their cash flow, and a moderate economic forecast through 2016.

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Business Services | Third Quarter 2014

November 2014 – The SCA Business Services Index underperformed the broader markets in Q3 2014, declining by 4.5% compared to an increase of 0.5% for the S&P 500. In particular, the SCA Marketing Services sector (down 17.0%), the SCA Professional Staffing sector (down 10.0%), and the SCA IT Consulting sector (down 5.0%) reflected growing concerns about slowing revenue growth and missed revenue forecasts. Despite overall investor caution regarding the Business Services sector, there were several bright spots. Healthcare staffing stocks in particular showed strong appreciation based on the positive impact of health reform driving demand for physicians and nurses. AMN Healthcare (NYSE: AMN) was up 24.1% in the third quarter and Cross Country Healthcare (NASDAQ: CCRN) was up 42.3% during this same period.

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Healthcare Services | Third Quarter 2014

November 2014 – Merger and acquisition volume for the healthcare industry in Q3 2014 set a record high in terms of deal value compared to all previous third quarter results on record, according to preliminary figures from Irving Levin Associates, Inc. Figures show a total of 323 deals were announced, totaling $119.5 billion. The closest Q3 period was in 2011, when 336 deals were announced, totaling $118.3 billion. The Pharmaceutical sector contributed to 75% of the quarter’s dollar volume with $89.4 billion in transaction volume as six of the 10 largest deals in Q3 2014 were for pharmaceutical targets. Biotechnology, eHealth, Long-Term Care and Medical Device targets made up the remainder of this transaction list.

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Capital Restructuring | Second Quarter 2014

September 2014 – In this edition, we provide our second quarter 2014 perspectives on the restructuring market. According to Moody’s and S&P, default rates held relatively steady during the Second Quarter 2014, at 1.9% and 1.6%, respectively. EFH’s bankruptcy was already heavily expected, and hence has been excluded from the reported figures. A potential bankruptcy filing from another struggling giant, Caesars Entertainment Operating Co., would propel the trailing 12-month U.S. high yield default rate to higher levels.

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Industrial Growth | Second Quarter 2014

August 2014 – This quarter, we provide our insights on the industrial growth market, which is experiencing strong momentum as industrial production, construction and the auto sectors all are expanding. Industrial production increased 0.4% in July, which equaled the pace in June, and capacity utilization reached its highest rate in over four years led primarily by a strong 1.7% increase in production of durable goods. According to manufacturing surveys from the Federal Reserve and industrial publications, manufacturing recoveries appears to be robust in broad sectors like auto manufacturing. The equity capital markets reported mixed results for the quarter, as only one sector of our Industrial Growth Universe – Resource Recovery & Waste Management – generated a strong return (+14.1% for the quarter) relative to the S&P 500 (+4.7%), while three sectors were generally in line with the broader market – Metals (+5.5%), Chemicals (+5.3%) and Analytical Instrumentation & Testing Equipment (+5.2%). The remaining four sectors of our universe all generated returns below the S&P 500.

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Business Services | Second Quarter 2014

August 2014 – The SCA Business Services Index underperformed the broader markets in Q2 2014, declining by 2.7% compared to an increase of 4.0% for the S&P 500. Despite strong performances by several staffing sector leaders (Manpower, Robert Half), the overall sector was dragged down by concerns of slowing economic growth. In particular, the SCA HR Services sector (down 8.0%), SCA Marketing Services sector (down 22.6%) and SCA Professional Staffing sector (down 5.0%) were particularly impacted by concern about slowing U.S. employment growth and small business investment. In addition, several sub-sectors, such as healthcare staffing and advertising, continue to experience challenges related to the fundamental transitions occurring within their respective industries.

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Healthcare Services | Second Quarter 2014

July 2014 – Merger and acquisition volume in the healthcare industry in Q2 2014 was one of the busiest in recent years. The quarter saw 268 transactions announced, up 11% from Q2 2013 and had the highest deal value of any second quarter at $138.8 billion, up 154% from Q2 2013’s $52.7 billion, according to preliminary figures from Irving Levin Associates, Inc.

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May 2014 – Compared to the prior quarter, default rates during the First Quarter 2014 fell across all three ratings agencies to the 1.4% (Fitch) to 1.7% (Moody’s) range. Looking ahead, default rates are expected to remain relatively steady over the next 12 months, absent a significant market event based on main factors: (1) short watch lists, (2) scarce near-term maturities, (3) plentiful liquidity across the credit markets, and (4) issuers continuing to post solid cash-flow growth. The EFH bankruptcy filing was captured in 2Q14 and hence did not impact 1Q14 default rates.

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May 2014 – This quarter, we provide our insights on the industrial growth market, which continues to experience favorable trends despite recent weak results in the somewhat overheated equity capital markets. Economic indicators have improved this spring as the labor markets have shown positive signs with lessening unemployment strains. And, according to the Federal Reserve, banks are seeing stronger loan demand and industrial output, which have shown positive increases for two consecutive months (February and March). The equity capital markets experienced sluggish returns, as only two of the seven sectors of our Industrial Growth Universe generated returns in excess of that of the S&P 500 (+2.9% for the quarter) ‐ Electronics & Components (+4.7%) and Chemicals (+3.4%). M&A activity for the quarter rose to 221 transactions, up from 186 in Q4 2013, while transaction value dropped significantly from $10.6 billion last quarter to $3.7 billion due to the numerous small‐cap spinouts and dispositions.

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Business Services | First Quarter 2014

April 2014 – After outperforming the broader indices in 2013, the SCA Business Services sector suffered a weak Q1 2014, declining by 1.0% compared to an increase of 3.2% for the S&P 500. This market pullback was led by the SCA HR Services sector (down 8.8%), SCA Marketing Services sector (down 2.3%) and SCA IT Consulting sector (down 1.0%). While some of the sector decline can be attributed to a general market correction from the run‐up experienced in 2013, investor concern about slowing U.S. employment growth and small business investment were significant factors, as well. Notwithstanding the sector’s overall performance, most companies in the sector beat 2013 guidance and continue to forecast growth for 2014.

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April 2014 – Merger and acquisition volume in the healthcare industry totaled 232 transactions for Q1 2014 across 13 sectors. The combined spending on these deals stands at $49.6 billion. Compared with the first quarter of 2013, the number of deals rose by 9%, and the spending volume exceeds the Q1 2013 spending total by 217%, according to preliminary figures from Irving Levin Associates, Inc. Excluding the $25 billion bid by Actavis plc (NYSE: ACT) for Forest Laboratories (NYSE: FRX) announced in February, the Q1 2014 deal volume total would be $24.6 billion, a still robust 54% increase compared with Q1 2013.

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Capital Restructuring | Fourth Quarter 2013

March 2014 – As hungry investors continued to chase yield, the leveraged loan market set a record during 2013 with a 30% increase over 2012’s volume and surpassing 2007’s prior record volumes. The amount of loans due prior to 2016 stands at just $17 billion, versus $67 billion when 2013 began. This scarcity of 2014/2015 loan maturities is likely to keep default rates low over the next few years.

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Industrial Growth | Fourth Quarter 2013

February 2014 – This quarter, we provide our insights on the industrial growth market, which continues to experience favorable returns and sector activity. Manufacturing activity is reaccelerating as the Institute for Supply Management’s global Purchasing Managers’ Index (PMI) is at its highest level since Q1 2011. High cash balances, moderate commercial and industrial loan volume growth, and attractive equipment leasing activity all support higher end demand for the industrial production sector. In the equity capital markets, all seven sectors of our Industrial Growth Universe generated positive returns for the quarter, while two sectors ‐ Electronics & Components (quarterly return of 13.6%) and Plastics & Packaging (10.3%) ‐ outperformed the S&P 500, which had generated a 3‐month return of 9.0%. Sector acquisition activity for the quarter rose to 186 transactions, up from 159 in Q3 2013, while transaction value dipped slightly from $11.8 billion last quarter to $10.6 billion due primarily to fewer large cap transactions being completed prior to year-end.

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Healthcare Services | Fourth Quarter 2013

February 2014 – Merger and acquisition volume in the healthcare sector totaled 1,002 transactions for 2013, 8% lower than 2012’s total of 1,091, which was the highest annual number of deals reached in the past decade, according to preliminary figures from Irving Levin Associates, Inc. M&A deal value in 2013 reached $163.5 billion, up approximately 14% compared with 2012’s total spend of $143.7 billion, which, conversely, was the lowest in the past decade, as the pool of well-performing assets continues to improve.

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