The M&A market saw a dramatic recovery in 2025, with volume hitting $4.5 trillion. This was largely driven by a record number of mega-deals, as corporations and sponsors pursued 'focused scale' to gain competitive advantages, access to capital, and higher market valuations.
AI has moved from a niche technology to a fundamental business priority, influencing everything from corporate strategy and digital budgets to M&A and capital market sentiment. With demand far exceeding supply, the sector is driving significant investment in infrastructure, data centers, and a wide array of software companies.
Financial sponsors are navigating a complex environment with a large backlog of assets requiring monetization. This has led to a surge in sponsor-backed IPOs, which are outperforming the market, and explosive growth in alternative liquidity solutions like the secondary market and continuation vehicles.
Despite volatility, both equity and debt markets demonstrated remarkable resilience and depth in 2025, supported by liquidity and positive sentiment. The debt markets, in particular, show a massive appetite for new M&A-related financing, with the capacity to fund multi-billion dollar take-privates and acquisitions.
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