Although Australian investment bankers are earning more than they were last year, the number of transactions has fallen. Global buyout funds are facing one of their most severe fundraising slumps, prompting banks to reduce their focus on private equity and instead turn toward opportunities with listed companies.
The data highlights the contrast. Investment banking fees rose 14% to $US2.1 billion in the first nine months of 2025 based on figures from LSEG. However, merger and acquisition (M&A) activity declined by nearly 17% to $US64.2 billion, the lowest it has been since 2020. While several large takeover discussions have emerged, including a proposed $30 billion bid for Santos, many potential deals did not proceed.
In Australia, the impact has been more pronounced. M&A volume fell close to 20%, with the total transaction value dropping to $US45.5 billion. One bank led domestically with a 7.2% market share, although the overall number of deals across the sector declined by almost 20% compared to the previous year. Ongoing global geopolitical uncertainty continues to delay strategic deals, but the main obstacle is fundraising, especially for private equity firms.
This pattern is consistent globally. Private equity funds, particularly those focused on Asia and Europe, are finding it difficult to raise fresh capital. PitchBook reports that global buyout and growth fundraising reached just $US310 billion as of September 2025, down from $US399 billion in the same period of 2024 and significantly lower than the $US661 billion peak in 2021. The decline is more severe outside of the United States, pointing to shifting investor sentiment.
There are signs of a possible recovery. Despite year-on-year declines, third-quarter global deal values reached $US595 billion, the highest level since 2021. This was driven in part by the record $US55 billion leveraged buyout of Electronic Arts, indicating that capital is still available for the right deals. What is changing is who controls that capital.
