The M&A landscape is poised for a year of dynamic change. Jon Whiteman and Axel Leichum discuss what they expect to see in the year ahead.
The global M&A landscape is poised for a year of dynamic change. As macroeconomic disruptions continue to dominate headlines, PE investors are under increasing pressure to adapt. The opportunities and challenges ahead will demand sharper strategies and innovative approaches. Here CIL’s Jon Whiteman and Axel Leichum discuss what they expect to see in the year ahead.
“2025 feels like the start of a prolonged period of macro disruption,” says Jon Whiteman, Managing Partner at CIL. “This word carries both positive and negative connotations, and I think we’ll see plenty of both. From Trump tariffs and generative AI to digitization and societal shifts, these forces are reshaping the global business environment.”
While uncertainty typically dampens deal activity, Whiteman notes that private equity investors are likely to push through the turbulence. “PE tends to prefer stability, but despite the challenges, I expect deal activity to continue an upward trend through 2025. As interest rates improve, valuation gaps narrow, and deal teams face growing pressure to close transactions, we’ll see momentum build,” he explains.
This optimism is supported by CIL’s Investment 360 Index, which reports the highest levels of confidence in the short-term UK economic outlook since its inception. Nearly half of respondents feel positive about the next 12 months, driven by easing interest rates and stabilising inflation. Similarly, CIL’s Mid-Market Pulse Check highlights a cautious but steady rebound in US deal activity, with expectations for moderate increases over the next year.
Adapting to a new administration
In the United States, economic growth is expected to remain robust in 2025, with GDP projected to grow between 2.5% and 3%. However, the business environment is likely to reflect the policies of a more protectionist administration. “Some industries will benefit from this stance, while others may find themselves at a disadvantage,” notes Axel Leichum, Head of CIL’s North American operations. “That said, private equity deal activity here is more likely to be influenced by sector-specific drivers, such as the need to generate returns and deploy dry powder, rather than macroeconomic conditions.”
Leichum predicts that private equity firms in the US will take a measured approach in response to the new administration. “Early in the year, we’ll likely see a ‘wait and see’ strategy as investors assess how policy changes unfold. There’s also likely to be a greater preference for domestically focused businesses, which are less exposed to international supply chain and demand-side risks,” he explains.
Opportunities and challenges
Globally, PE firms will need to strike a balance between aggressive deal-making and diligent preparation. “In 2025, there will be more deal processes than we’ve seen in recent years,” Whiteman predicts. “Top-tier targets will be aggressively fought over, requiring PE to act fast and with conviction. At the same time, there will be a mix of quality in the market, and investors will need to work hard to identify the diamonds in the rough.”
Leichum adds that a rebound in deal activity may stretch resources. “Over the last couple of years, firms have streamlined their internal and external teams. A rapid return to higher deal volumes will test those capabilities,” he says. Whiteman agrees, emphasizing the need for firms to invest in portfolio management: “Developing robust monthly KPIs and forecasting tools is essential. Those who invest in these capabilities will be better positioned to navigate the challenges and seize opportunities.”
Winning through adaptation
Private equity strategies will need to become increasingly sophisticated to thrive in this complex environment. “PE firms must adopt a disciplined, hypothesis-led approach to deal-making. This means deeply understanding sub-sectors or operating models to buy with conviction. It’s no longer enough to back a management team and their business plan; investors need to actively drive value creation post-deal. Whether it’s pivoting a proposition, leveraging data, or investing in digital transformation, PE firms need to know which levers to pull and when,” says Whiteman.
Leichum echoes this sentiment, highlighting the importance of sector-specific insights. “In the US, industry-specific factors will drive much of the activity. Firms need to be attuned to the nuances of their target sectors to unlock value,” he explains.
Looking ahead
As 2025 unfolds, private equity investors will need to navigate a dynamic landscape of disruption and opportunity. With the right strategies, tools, and insights, they can not only overcome challenges but capitalize on the shifting environment.
“2025 is about moving with speed, conviction, and precision,” Whiteman concludes. “The winners will be those who can combine deep sectoral knowledge with innovative value creation strategies to deliver superior outcomes.”
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