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Alternative Market Briefing

Appetite for M&A is high, but headwinds remain

Monday, June 30, 2025

Bailey McCann, Opalesque New York:

It's no secret that private equity firms are sitting on a mountain of dry powder and don't have many places to deploy it. Institutional investors are also entering another year of slow distributions, making it difficult to re-up into new funds and manage capital calls. Despite these headwinds, new research from PwC suggests that the appetite for M&A remains strong. Firms are also taking time during this slow period to shore up their operations and reinforce existing portfolio companies.

"Increasingly, we see large funds deploying AI to improve operational efficiency, including by constructing AI deployment blueprints for their portfolio companies," the report says. "We expect AI to play an ever-larger role in M&A as the technology advances, more use cases are identified, and dealmakers become more comfortable using the available tools and trusting the outputs."

Deal volume improves

Both the volumes and values of PE buyouts rose in the first quarter of 2025 from the same period a year ago. The deal volumes rose to an estimated 4,828, up from 4,462, and deal values rose to an estimated $495bn, compared with $354bn in the first quarter of 2024, PwC data shows.

The report notes that in addition to tariff related uncertainty in the US, market participants were anticipating some measure of deregulation. That has not happened and the FTC continues scrutinizing deals. The lack of movement on deregulation combined with growi......................

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