BMS reveals the latest on the M&A market

What impact have the COVID-19 pandemic and the ongoing geopolitical tensions worldwide had on mergers and acquisitions? A new insurance brokerage report suggests the market has been soft but might be about to make a comeback.

BMS, an independent specialist insurance broker, has released the fourth edition of its global Private Equity, M&A, and Tax (PEMAT) report.

“The market in 2023 was suppressed by challenging socio-economic and geopolitical developments and with those circumstances going nowhere fast and several upcoming elections, they will continue to influence deal flow. However, 2024 promises to be dynamic,” said Tan Pawar, managing director and head of private equity, M&A and tax at BMS.

Private equity funds were found to have increased their committed but unallocated funds and there has been a 21% increase in overall enquiries, which suggests a strong transaction appetite in the market.

“Reduced interest rates and substantial dry powder within PE houses are likely to stimulate investment activity. At the same time, the appeal of emerging markets, as well as the resilience of sectors like renewables and infrastructure, will keep market conditions evolving,” said Pawar.

The report found that the soft market had showed the disparities in valuations between buyers and sellers, which had served as a challenge when it comes to completing deals. The secondaries market got off to a slow start in 2023 but it eventually increased activity when Q4 rolled around as LP-to-LP transfers began to dominate transaction volumes.

Warranty and indemnity claims saw a surge in activity in 2023, influenced by the boom of M&A activity in 2021 and 2022. The most resilient sectors were renewables & energy, financial services, and retail & consumer as they saw increases in deal volume even with the downturn of M&A.

The PEMAT report analyses the trends of the 2023 market and provides an outlook for the M&A markets of the UK, Europe, North America, Asia, Middle East, and India.

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