“Most of the top 20 advisers by value and all the top 20 by volume witnessed a decline by respective metrics in Q1-Q3 2022 compared to Q1-Q3 2021, as global deal activity slowed amid volatile market conditions caused by macroeconomic headwinds and geopolitical tensions,” GlobalData lead analyst Aurojyoti Bose said.
“In fact, all the top 20 advisers by volume registered a double-digit decline.”
PwC Australia’s deals leader and partner, Rob Silverwood, said that although deal activity had declined, he expected “a base level” would continue as “corporates, private equity and real asset funds have significant capital to cautiously deploy”.
He predicted deals in the health and infrastructure industries would continue to “generate good activity” and that the energy transition would prompt “significant deal activity”.
Retail and consumer activity had dropped, however, as had technology valuations, and Mr Silverwood did not think that trend would change quickly.
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“Economic headwinds are posing challenges, particularly where large-scale credit or leverage is required,” he said.
“But with a need to deploy capital, strong interest in public to private transactions and the broader energy transition, we believe we will continue to see volatility which should underpin good levels of deal activity.”
Australia was viewed as a relatively safe and desirable investment location, given its geopolitical, currency and commodity position, he said.
However, buyers were “keeping a close eye on the gap between vendor and seller value expectations and are positioning for that gap to tighten further” as the M&A market cooled, he said.
This meant deals were becoming more complex, and more creativity was needed to get them over the line.
Goldman Sachs was the only adviser to crack $700 billion in total deal value across the three quarters this year, said GlobalData, while Rothschild & Co was the only one to work on more than 250 deals.
