For people who have more visibility into the market like directors and partners, can someone explain why we had such a hot M&A summer 2025, despite the uncertainty behind the tariffs and the government affairs? Thank you.

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People can only sit on money for so long

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PEs have plenty of dry powder (cash). They have to spend (invest) their cash to make money for themselves & investors.

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F

It was hotttt

I think it may have been a “non-tariff exuberance” for those companies that were not impacted by tariffs

Market was still down overall

Compared to what?

How do you measure hotness? In my experience people were have been stuck on old deals and summer vacations affected short term staffing needs.

To give you an actual answer, the reason is a lot of deals were being delayed with the uncertainty over tariffs in H1. As we entered July a lot of that uncertainty went away as trade deals were agreed with most large economies (China, Japan, EU, UK) and the other tariffs were largely brought down to the 10-15% range. There are some exceptions like India and Brazil but on the whole it's like we went from Defcon 2 to 4.

A lot of deals which were previously on pause then hit play. So you had pent up activity being released which is all hitting in the summer and the second half of the year.

The macro environment is also not looking too bad. Rates have fallen and a mild recession will only make them drop more, with inflation still relatively subdued.

There's still uncertainty over what will happen in 2026 but right now the deals are flowing at a time when a lot of firms cut headcount. Everyone still left working are rewarded with a lot more work! Firms are increasing hiring again but they'll be wary of overdoing it.

That was super helpful thank you so much

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