An Optimistic Future: Strong Demand for Capital, a Dealmaking Upturn, & a Surge of Private Equity

Wall Street is anticipating a strong level of deal activity in 2025 as Donald Trump returns to the U.S. presidency, based on an optimistic stock market, falling interest rates, and fewer regulatory interventions. A recent surge in demand for capital is expected to continue, as many experts expect dealmaking to rebound, resulting in a flurry of private equity ventures.

Additionally, corporate clients are in a positive position to quickly invest further into areas of technology and other infrastructure, especially as they sit on record cash levels that must inevitably be directed somewhere. Globally, we can expect there to be a focus on core revenue-generating functions that boost competitiveness, along with the divestment of non-core assets.

For the past few years, deal volume has been subdued after seeing record levels following the end of the COVID-19 pandemic. According to data from Dealogic:

• Total global deal volume was up around 12% at the end of 2024 compared with the same period in 2023
• The number of deals was lower, and volume remained well below the 2021 high

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With Trump’s return, experts are welcoming declining interest rates, fewer regulations, and active markets to drive corporate CEOs and private equity firms to make more deals. However, with Trump comes a particular level of unpredictability that can potentially rattle some in certain sectors. Yet, the overall positive outlook remains strong.

Activity in the middle market is in a position to surge this year, propelled by increased margin pressure and a need for scale and growth to keep up with digital transformation, mainly in the key areas of artificial intelligence, cloud computing, automation, and cybersecurity. Private equity buyers will see a chance to create value by escalating carve-outs and spin-offs as valuation gaps narrow and more opportunities exist for successful exits. Improving economic conditions will boost corporate confidence and provide a foundation for more middle-market deal activity.

Dealmakers would be wise to get a jumpstart on quantifying asset value based on solid data and the guidance of M&A experts. This year should hold some key opportunities, and buyers and sellers should be prepared to take action before it’s too late. 

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