Private investment giant Blackstone expects a more favourable environment for mergers and acquisitions (M&A) and a rebound in initial public offerings (IPOs) to drive more than double the number of private equity exits in 2025, according to a report by Reuters.
The report quotes Martin Brand, Head of North America Private Equity at the firm, as saying at the Reuters NEXT conference in New York, that: “IPO markets are open. The cost of capital has come down. The 2021 vintage, which saw significant private equity deployment, will be four years old in 2025, making many successful deals ripe for exit.”
Private equity firms are preparing for a recovery in leveraged buyout volumes in 2025, supported by falling interest rates, a backlog of capital to deploy, and opportunities linked to the explosive growth of artificial intelligence (AI).
This improved financing landscape has encouraged firms like Blackstone to pursue larger deals, with the firm having already demonstrated its appetite for sizeable deals. In November, Blackstone announced an $8bn acquisition of sandwich chain Jersey Mike’s Subs, one of the largest buyouts of the year. Earlier in 2023, it agreed to acquire Australian data centre operator AirTrunk for $16bn. In September, Blackstone and Vista Equity Partners struck an $8.4bn deal to take collaboration software company Smartsheet private.
While Brand expressed confidence in the broader economic landscape, he also noted it is premature to assess the impact of regulatory shifts under the incoming presidential administration.
“We’re generally confident in the US economy. It seems to be gathering momentum,” he said.
