2025 Deal Activity

It’s funny because 2025 was supposed to be a killer year. All anecdotal, but heard January was a very low month for M&A (haven’t ran a ciq pull to verify).

My group is projected flat on M&A revenues when being conservative on binarily selecting what closes/what does not and then applying a 75% weighting to that figure for 2025 fees.

I think with a lot of market uncertainty (tariffs, inflation) H1 is going to be rather muted in terms of deals.

However, there are still a lottt of funds with vintages raised in 2017-2019 that will need to really start returning capital to LPs and can see deal activity picking up starting in H2 as they realize you can’t hold on to these forever and hopefully more clairty in the market

I’m on the BD side so I see/hear about nearly everything in, or coming, to market. It is indeed slow right now - lot of missed Q4 numbers pushing expected Jan/Feb launches to second half of the year. Market currently is very barbell’d: A+ assets getting bid the fuck up, and some really hairy shit that will either not trade or go to the deep value guys. Not much in between.


Note: I spend time in industrials/consumer so not sure about other sectors.

Somewhat cynical take but at the beginning of the last 3 years (2023-2025) people have said three things and none have really happened in 2023 or 2024: distributions to LPs would pick up, deal activity would pick up and the IPO market would open. None of these happened and IMO until rates drop a good bit none will change. PE doesn't work if all in debt rates are low teens. It kills low growth, debt laden (see UMM/MF PE broadly) and it hurts buy and build (roll-up) heavy firms.

This slowness is absolutely slaughtering midlevel recruiting. ASO's are still on the normal cadence since they either get promoted or leave for school or another firm, but the appetite for more than just "execution bodies" is doing such a number on appetite for SASO / VP for 2.5+ years now that I wonder if a lot of the talent pool is just leaving "high finance" entirely at this point.

I've been hearing that the M&A market is coming back for 6 quarters in a row now...

January was a terrible month FYI - 7% drop YoY from an already slow 2024

Deal Watch: Deals Keep Moving, but M&A Value Fell in January

It’s been slow on the LMM/MM PE front to start 2025, which is typical for early-year lulls. A lot of focus is on portfolio work and idea generation, with less live deal action. The market’s macroeconomic conditions, like rising rates and inflation, are also slowing things down. Many firms are looking at add-ons rather than new investments. As for sectors, there’s interest in healthcare, tech (software/IT services), industrials, and ESG-related industries like renewable energy. The pace is slower, but firms are still active in finding the right opportunities.