US private equity professionals prepare for uncertainty amidst increasing M&A trends in 2025, according to Aon study

US private equity dealmakers are gearing up for a busy year of mergers and acquisitions (M&A), anticipating increased activity despite challenging economic conditions. The industry remains optimistic about the potential for deals in the coming months, with many firms actively seeking opportunities to deploy capital and capitalize on market conditions.

One of the key factors driving this optimism is the availability of capital. Private equity firms are sitting on significant amounts of dry powder, which are funds that have been raised but not yet invested. This capital overhang provides dealmakers with the flexibility and resources needed to pursue new opportunities, even in uncertain market environments.

Additionally, low interest rates and abundant liquidity in the financial markets are creating favorable conditions for dealmaking. The environment of historically low borrowing costs is enabling private equity firms to finance acquisitions more easily and cheaply than in the past, making deals more attractive from a financial perspective.

Furthermore, recent shifts in consumer behavior and industry dynamics have created new opportunities for investment. The COVID-19 pandemic has accelerated trends such as digitalization, e-commerce, and remote work, prompting private equity firms to seek out companies that are well-positioned to benefit from these changes. Industries such as technology, healthcare, and consumer products have seen increased interest from dealmakers looking to capitalize on these evolving trends.

Despite these favorable conditions, dealmakers are also mindful of the risks and challenges that lie ahead. Economic uncertainty, geopolitical tensions, and regulatory changes all pose potential obstacles to successful dealmaking. Firms will need to carefully assess and navigate these risks to ensure that their investments remain resilient in the face of unforeseen challenges.

In addition, competition for quality assets remains fierce. With so many firms vying for a limited number of attractive targets, dealmakers must be prepared to move quickly and decisively to secure deals. This heightened competition has the potential to drive up valuations and create challenges in finding suitable investment opportunities.

Overall, US private equity dealmakers are approaching the coming year with cautious optimism. While the outlook for M&A activity remains strong, dealmakers are aware of the risks and challenges that accompany this promising environment. By staying agile, adaptive, and focused on identifying high-quality opportunities, private equity firms are positioning themselves for success in the year ahead.