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Dealmaking opportunities to improve throughout 2023, says survey

Investment banks and advisory firms are cautiously optimistic that markets will modestly revive through the second half of 2023, despite the current economic uncertainty, with 58% of senior executives expecting only a mild dip in business opportunities, according to a survey by Acuity Knowledge Partners.

Around 71% of the respondents expect private equity firms and their large reserves of unallocated dry powder to drive deal activity throughout the remainder of 2023. Reasonable valuations and an increase in market consolidation are likely to generate additional deal volumes, while digital transformations, corporate restructuring, increased cross-border activity and ESG considerations are also key factors expected to keep dealmaking buoyant this year.

The TMT, healthcare and pharma sectors are expected to generate the most opportunities for investment banks and advisory firms, with particularly elevated interest in AI and machine learning, virtualisation and cleantech deals.

Around 55% of the firms surveyed expect increased cost pressure this year, compared to 2022. To mitigate costs, improve the customer experience, and boost the deal pipeline, firms are deploying productivity-enhancement and automation tools, leveraging AI, employing offshoring services across the deal lifecycle, and conducting strategic portfolio reviews.

Firms are also placing increased importance on operational efficiency and cost optimisation to achieve long-term business success. More than 40% cited that strategic initiatives such as process re-engineering and workforce strategies are among the top three activities that their firms are currently spending time on.

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