More money chasing deals in frothy' M&A market.

Byline: William Morris

The best word to summarize the 2019 market for mergers and acquisitions might be "frothy."

At a Tuesday conference for M&A experts hosted by Faegre Baker Daniels in Minneapolis, panelists described a market flush with cash but struggling to maintain momentum after a decade of uninterrupted economic growth.

"There's still a tremendous amount of supply of capital," said Matt Sznewajs, managing director at Piper Jaffray. "It's out there, both from the private equity world as well as from the lenders. But there's not enough supply of companies, though. So the [capital] supply is there as the supply of companies isn't necessarily there."

2018 was the fourth straight year with more than $2 trillion in deals in North America, according to market data company PitchBook. Through the third quarter of 2019, the market is on track to extend the streak to five, with $1.6 trillion in deals to date. But despite those topline numbers, there's a feeling of unease among M&A experts as they look to the next few years, said Bruce Engler, conference emcee and head of Faegre Baker Daniels' mergers and acquisition practice.

"I sense a level of anxiety in the M&A market that I haven't felt for a few years, to be thinking about all this stuff that's going on right now," Engler said. "Total political dysfunction, trade wars, slowing U.S. economy, very slow global economy, an M&A market that's very long in the tooth; there's a lot to dislike today and I think a lot to be concerned about."

Politics is especially on the mind as brokers look ahead to the next 12 months and the 2020 election. Harris Williams managing director Glenn Gurtcheff said that, while the Trump administration has cut taxes and regulations, "the noise around trade and tariffs is generally viewed as very, very unproductive" and the president's penchant for policy formulation via Twitter creates unwelcome uncertainty for the market. Nor are companies necessarily rooting for his likely electoral opponents.

"On the other hand, the farther the Democratic pool of candidates leans leftward, the more uncertainly you're going to bring into the equation there too," he said. "The market really does not like uncertainty, and views the current political environment right now as just...