Mardi Gras, M&A and Market Movers: On the Ground at Tulane 2025

By Deven Anand and Caroline Roseman

The day after Mardi Gras, a sea of M&A lawyers, bankers, proxy solicitors, and communications advisors arrived for New Orleans’ second-biggest party of the year: the 37^th annual Tulane Corporate Law Institute. The H/Advisors Abernathy team spent three productive days on the ground discussing the trends shaping the deal environment:

Missing Trump Bump

Prior to President Trump’s inauguration, Wall Street was overwhelmingly optimistic that his election would bring a necessary boost to dealmaking. However, the so-called “Trump Bump” has not yet materialized, as deal volumes fell to the lowest level in more than two decades through the end of February. The new administration’s on-again off-again tariffs and other unpredictable actions reverberated across markets, with the VIX skyrocketing above 24 while the S&P fell by more than 3%. A consistent theme is that companies are awaiting clarity from the Trump Administration before making any big decisions. That said, many companies still have the resources (and appetite) to pursue strategic M&A, as S&P 500 companies have nearly doubled their cash on hand since 2020, while also actively deleveraging.

Private Capital: To Be Or Not To Be

Private equity deals picked up in 2024, with GPs accounting for more than 1/3 of all M&A buyers during this period. However, exits continued to decrease, and LPs are actively clamoring for distributions while dry powder sits on the sidelines threatening planned new raises. One banker noted there are almost 12,000 PE-backed companies in the U.S., though the persistent valuation gap is further impeding exits. Meanwhile, market volatility is also challenging the IPO market, and the 2024 IPO thaw seems to be set on ice after only a few recent listings met market expectations.

Alternatively, there has been an uptick in the secondaries market and continuation funds, with GPs using them to provide liquidity to LPs while safeguarding their investments. Continuation funds represented 13% of global sponsor-backed exit volumes in 2024, a figure expected to climb to 20% by 2028.

Eternal Activists

Despite this uncertainty, advisors don’t expect an uptick in public activist campaigns. Conversations centered around the notion that activist situations are likely to settle before going public, as boards continue to have less and less appetite to engage with activists and may already be taking steps to address the activist’s credible arguments internally. As it becomes easier to influence corporate action with only a small position and no board seats, the move toward year-round activism that goes beyond the traditional proxy season is expected to continue.

House Picks for 2025

While M&A will be challenged until markets start to stabilize, the infrastructure, AI and financial services sectors are expected to continue to lead other sectors in transaction volume and size through 2025.

The first two months of 2025 brought multiple twists and turns that show no signs of abating. While we are operating in a rapidly evolving landscape, M&A continues to be a powerful tool for companies to address challenges and increase scale. At H/Advisors Abernathy, we help our clients communicate effectively through such dynamic conditions and remain poised for volatility that may be ahead.