Goldman Sachs Managing Director Christina Minnis Says M&A ‘Really Picking up'

M&A activity, while flat year-to-date, is showing signs of a significant resurgence, driven by companies leveraging strong credit markets and increased willingness from corporate boards and sponsors to transact. This renewed optimism, articulated by Minnis for late 2025 and 2026, is echoed by Goldman Sachs' John Waldron, who earlier noted a 30% increase in large deals over $500 million despite broader market volatility. The current pickup follows a period where high interest rates and geopolitical factors caused private equity firms to hold onto approximately $1 trillion in unsold assets, suggesting a potential unlocking of capital as dealmaking momentum builds.

Analysis

Mergers and acquisitions activity, while reported as flat year-to-date, is demonstrating signs of a material recovery following a 20-year low noted in May. The recent pickup over the summer, which came after a tariff-induced slowdown, is being driven by favorable credit markets and a renewed willingness from both corporate boards and private equity sponsors to transact. This optimism is supported by commentary from Goldman Sachs' (GS) President John Waldron, who, as early as May, noted a 30% increase in large deals valued over $500 million, signaling underlying strength despite broader market volatility. This resurgence is particularly significant given the context of the first half of the year, where high interest rates and geopolitical turmoil suppressed valuations and caused private equity groups to hold onto assets. A June PwC report quantified this backlog at approximately $1 trillion in unsold assets, representing a substantial volume of potential future deal flow that could be unlocked as market conditions improve and confidence returns, aligning with expert forecasts for a robust M&A environment in late 2025 and 2026.

Key Decisions for Investors

• Consider increasing exposure to investment banks and M&A advisory firms, as they are positioned to directly benefit from the described pickup in dealmaking and the potential unlocking of $1 trillion in private equity assets.
• Monitor Goldman Sachs (GS) as a key potential outperformer, given its president's confidence in a strong deal pipeline and the firm's noted strength in the large-deal segment, which saw a 30% increase.
• Remain cautious of macroeconomic headwinds, as the article explicitly states that interest rate policy, tariff developments, and geopolitical turmoil previously halted M&A activity and could derail the nascent recovery.
• Watch for an increase in sponsor-to-sponsor transactions and corporate carve-outs, as the combination of favorable credit markets and the large overhang of aging private equity assets creates a compelling catalyst for portfolio monetization.