If 2024 marked a shift to growth, 2025 will accelerate momentum on a global stage.
For over a year, capital markets have sought clarity on two common bottlenecks for M&A: monetary policy and regulation. With these dynamics normalizing, a generational technology disrupting industries, sponsors seeking liquidity, and a growing desire from corporates to transform their portfolios through M&A, we expect significant upside potential for dealmaking next year — but with a healthy dose of volatility as capital markets navigate “known unknowns” in the form of tariffs, geopolitics, and more.
The key drivers unlocking growth and transformation in the year ahead
Greater Macro Clarity Will Fuel Corporate M&AWith key M&A bottlenecks of monetary policy and regulatory uncertainty addressed — at least directionally — CEO confidence is rising amid broader expectations that the new US administration will usher in more supportive regulatory policies, fueling corporate M&A.
A Global Shift Toward SimplificationMore than half of global separation announcements in 2024 occurred outside the United States. Driven by a mixture of portfolio complexity and optimal capital allocation, corporate separation activity remains strong across the globe, with few signs of slowing.
Paradigm Shifts Catalyze Global Sponsor M&ASponsors are tapping into a range of strategic levers to unlock liquidity — sponsor-to-sponsor deals, minority stake sales, and creative continuation fund structures — driven by high levels of dry powder primed for deployment and continued focus on returning capital to investors.
AI-Driven M&A: A Strategic Focus on the StackWe view the AI era through an Infrastructure-Platform-Application framework, with most M&A activity to date concentrated at the Infrastructure and Platform layers. The anticipated wave of industry transformation is already sparking M&A among technology companies.
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The fundraising pipeline puts a greater focus on distributions to paid-in-capital (DPI), more innovative liquidity structures, and a need to redress balance between exits and deployment, which sets up for an encouraging 2025.”
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