Deal drivers and headwinds

Published on July 30, 2024 by Prasanna Kumar

Reasonable valuations and dry powder available with financial sponsors are seen among the top drivers of deal activity in 2024. Geopolitical uncertainty is viewed as the #1 headwind for the industry this year, followed by valuation mismatch and a higher cost of capital.

The ongoing geopolitical headwinds would be offset mainly by the expected decline in interest rates, availability of dry powder, demand for growth capital and cross border transactions.

Ranking of factors driving M&A, according to the survey respondents:

The survey results also highlight factors that could act as headwinds to the industry’s growth and performance:

A “healthy sell-side M&A pipeline” should unlock as conditions improve further. Companies do accept the new pricing reality, which will be helped by a rebound in equity markets - Jane Fraser, CEO, Citigroup

Strategic priorities and focus areas for C-suite executives

While expanding/augmenting products and services for revenue growth, investment banks and advisory firms are keen to continue focusing on idea generation and origination despite these being the most time consuming tasks.

Investment banks and advisory firms are considering the following ideas in order to be more competitive and drive revenues…

…to this end, top management lists the following operational priorities for their bankers in 2024:

…to bridge this potential gap and/or achieve goals, investment banks and advisory firms are considering the following strategies:

Read the full survey here

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