Interview, Fireside Chat
The outlook for global deal-making
- Global activity for 2025 is projected to mirror the balanced outlook of 2024, which delivered a 10% year-over-year growth relative to 2023.
- European markets experienced a sharp acceleration from muted 2023 levels to normal activity in 2024, a trajectory Australia is expected to follow with similar recovery timing.
- In Asia, India and Japan are identified as bright spots showing real acceleration in private equity and corporate-led large activity, while China remains muted due to regional factors.
- The Asian region is currently tracking the European trend but is running several months behind in its general trajectory.
- Cross-border activity is anticipated to increase as European corporates begin to look within their own continent, following the pattern of US corporates entering Europe.
- US corporate focus on domestic growth is expected to persist, supported by global stability and onshoring trends.
- Private equity capital deployment in 2024 is running at levels close to long-term averages (excluding 2021) and is expected to sustain this rate.
- Private equity exit rates for 2025 are expected to improve as valuation gaps close, bid-ask spreads narrow, and the IPO market recovers, increasing pressure on sponsors to return capital.
- Private equity monetizations and M&A activity are forecast to see a reasonable 10% to 15% pickup in 2025, rather than a 40% surge.
- Generative AI deal activity is expected to evolve into a mature M&A market once company leaders and valuations stabilize, with initial investments in power and data centers driven by capital partnerships rather than immediate M&A.
- The M&A market is not expected to experience rocket ship growth in 2025; instead, it is forecast for modest balanced growth contingent on regulatory and geopolitical headwinds not abating.
- The next 12 months are projected to offer a more favorable environment for large deal-making compared to the previous 12 months due to improved risk appetite and financing conditions.
- M&A activity is expected to recover to five-year or ten-year averages over the coming years, though the specific timing of this recovery within the next one to two years remains uncertain.
- Key monitoring focuses on whether conditions will continue to improve in the near term to support larger, higher-risk transactions.