Constellation Research CEO R 'Ray' Wang and Heritage Foundation financial economist EJ Antoni join Mornings with Maria to discuss the outlook for 2025.
With one week left until President-elect Donald Trump's official inauguration, investment bankers say a boom in Trump-related deal making has already begun, exploding trading activity that had been stymied by the regulatory-heavy Biden administration. It is said that it is on the verge of expanding.
That's the conclusion of a panel of investment bankers and private equity executives who discussed the return to corporate trading at the Frontiers of Digital Finance conference in Miami on Tuesday.
“There will be more deals coming to market in 2025 than there have been in the past two years,” said Jeffrey Levin, managing director at investment banking firm Houlihan Lokey, who spoke on the panel. “More capital has been raised in the past three years than in the history of private equity, and it's been underutilized.”
The conference was hosted by a private lending company called Biz2X, which provides online lending solutions for small and medium-sized businesses, and was attended by several leading companies in finance and at the intersection of finance and politics. Patrick McHenry, former North Carolina congressman and chairman of the House Financial Services Committee, said in his keynote speech that Trump's victory, along with Republicans retaining leadership in the House and gaining a majority in the Senate, means new regulations will be needed. He said this would herald the arrival of an era of relaxation. Promote capital formation.
What impact will the incoming Trump administration have on the M&A market?
Representative Patrick McHenry, Republican of North Carolina and Ranking Member of the House Financial Services Committee, speaks during a public hearing on Thursday, June 23, 2022, in Washington, DC, USA. The Federal Reserve Chairman made the most obvious statement. (Photographer: Eric Lee/Bloomberg via Getty Images/Getty Images)
“Washington is open and the American economy is open. The era of post-financial crisis regulation, legislation and politics is over and done with,” McHenry said.
During a panel discussion on M&A, David McGown, managing director of Barclays Financial Institutions Group, said he expects the incoming Trump administration to loosen its regulatory approach by the Federal Trade Commission, Federal Communications Commission, and Federal Communications Commission. He said that interest in trading is increasing. and the Antitrust Division of the Department of Justice.
Mr. Biden's appointees to lead these three agencies have halted nearly all M&A activity in recent years. Those who choose to ignore the regulations face a lengthy legal battle with the Biden Deal Police.
That said, President Trump is not expected to give a clean slate to all consensus-building efforts. His regulators remain skeptical of the power of Big Tech and may be looking at Google, Apple, Amazon, Facebook and other big tech companies with suspicion as they continue to grow in size.
BNY Wealth CIO says deregulation will fuel the company's stock market going forward
Other companies, such as banks, will likely face less regulatory scrutiny than Big Tech once President Trump finalizes leadership decisions at key institutions.
McGown said Barclays is currently involved in several deals that are a direct result of the post-election deal thaw.
During a panel discussion, Abhi Mehrotra, Goldman Sachs' global head of activism, shareholder advisory and takeover defense, said that consolidation of regional banks (small and medium-sized banks with less than $100 billion in assets) is expected to continue. said.
Mergers and acquisitions blocked or challenged by the Biden administration in 2024
Because of their size, local banks benefit from mergers through so-called scale synergies. These refer to the cost savings and increased revenue generated by the increased scale that comes with merging two entities.
McGown said the top four investment banks, Goldman Sachs, Morgan Stanley, JPMorgan and Bank of America, each hold more than $1 trillion in assets, and last year they collectively accounted for more than the banking industry. He pointed out that he earned more than half of his profits.
Wall Street sign in front of the American flag (Reuters/Mike Seeger/Reuters Photo)
McGown sees this as a potential concentration risk and observes that easing regulations could bring in smaller specialist companies to reduce that risk.
“Part of the value of consolidation is finding ways to grow further, but part of that is less concentration at the top,” he said.
Mehrotra said that in addition to local banks, other areas where M&A activity is expected to accelerate are fintech, industrial and consumer sectors.
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Officials said the move comes as companies like Warner Bros. Discovery and Comcast struggle with declining advertising revenue and so-called cord-cutting, where consumers ditch traditional cable packages for more services. He says the media industry is also ripe for consolidation. Their news and entertainment online.
“In reality, Mr. Biden thought he was helping consumers by shutting down trade, and all he was doing was weakening these companies and making them less competitive.” one media executive, who requested anonymity, told FOX Business.
