Investment titan Blackstone is gearing up for a surge in M&A activity and IPOs in 2025, anticipating an increase in private equity investment sales. Martin Brand, Blackstone’s North American private equity head, spoke at the Reuters NEXT conference in New York, suggesting a favorable environment due to aspects such as lower capital costs and a thriving IPO market.
Brand highlighted the 2021 vintage, a period of significant private equity investment, which by 2025, will mature, preparing many successful deals for an exit. With the expectation of a recovery in leveraged buyouts in 2025, leading investment firms are preparing to leverage lower interest rates, invest billions in raised capital, and seize opportunities in the rapidly growing artificial intelligence sector.
High financing costs in the past two years have made leveraged buyouts expensive, complicating large deals. However, as the financing outlook improves, companies like Blackstone are preparing to pursue large buyouts. Brand asserted that not only will large transactions continue, but they may also increase in size, given the favorable financing market.
Blackstone recently made headlines with an $8 billion purchase of Jersey Mike’s Subs, marking one of the year’s largest buyouts. The investment behemoth also bought Australian data center operator AirTrunk for $16 billion and partnered with Vista Equity Partners for an $8.4 billion deal to take Smartsheet, a collaboration-software maker, private.
According to Preqin data, U.S. private equity and venture capital deal volumes have reached $423 billion this year, coming close to the $440 billion total for 2023.
Looking towards 2025, large investment firms expect a robust U.S. economy to drive M&A activity. While it’s early days to assess the economic impact of tariffs and deregulation under the incoming Trump administration, Brand expressed confidence in the U.S. economy’s momentum.
Blackstone, a leading alternative asset manager with about $1.1 trillion in assets under management, sees the rise of generative AI as a key growth driver. The firm manages $55 billion in data center assets currently under development or construction and has identified potential investment opportunities worth $70 billion in the sector.
“We’ve been big investors in the picks-and-shovels data center theme. That’s being driven broadly by AI demand,” said Brand, indicating Blackstone’s focus on the rapidly growing AI sector.
