By Saeed Azhar and Utkarsh Shetti
NEW YORK, Feb 10 (Reuters) – Financial sponsors, such as private equity firms, may bolster dealmaking activity as they come under pressure to return capital to their investors before raising fresh funds, Goldman Sachs CEO David Solomon said on Tuesday.
“With respect to sponsors, we’ve all kind of been waiting impatiently for that to accelerate. I think we’re reaching a point where it’s accelerating,” Solomon said at the UBS financial services conference in Florida.
There is pressure on financial sponsors to return capital to their investors before they undertake fresh fundraising rounds. Therefore, valuation for companies they want to sell is becoming less important, he said.
“Whether they’re going to the M&A market or they’re getting stuff public, they’ve got to return more capital,” Solomon said.
The Goldman CEO also said the strategic mergers and acquisitions activity led by companies was going to be “meaningfully higher” than it had been on average over the last five years.
“There’s very little to likely upset that path on the strategic stuff,” he said.
Goldman capped a strong 2025 after it beat Wall Street expectations for fourth-quarter earnings in January, driven by a surge in dealmaking and trading.
Goldman advised on some large mergers in 2025, including the $55 billion leveraged buyout of Electronic Arts and Alphabet’s $32-billion acquisition of cloud security firm Wiz.
These outsized deals helped Goldman secure the top spot once again for global M&A in 2025, with the bank advising on $1.48 trillion in total volume of deals and raking in $4.6 billion in fees.
Troy Rohrbaugh, JPMorgan Chase’s Co-CEO of the Commercial & Investment Bank, said at the same conference the dealmaking momentum will continue in 2026.
“The pipelines continuing through the end of ’25 into ’26 look excellent. I think it can be really possibly one of the better years we’ve seen in a very long time in M&A, or certainly in that top decile,” he said.
Rohrbaugh said it will be challenging for capital markets to hit the previous high seen during the pandemic period of 2020/21 when deal volumes were fueled by Special Purpose Acquisition Companies (SPACs).
SPACs are shell corporations that raise money through an IPO to acquire or merge with a private company.
“You’re not going to have that SPAC involvement this year, but you have the possibility of a very robust IPO pipeline,” he said.
(Reporting by Saeed Azhar and Utkarsh Shetti; Editing by Anil D’Silva and Nick Zieminski)
Comments