Deal-making predictions for 2024 - asset management, life sciences, European P2Ps and generative AI

Continued volatility in the debt markets has resulted in another subdued year for M&A, with global deal value and volume down 33% and 18% respectively compared with 2022. However, Q2 was the strongest quarter for M&A in 12 months – and October the biggest month by value and volume since May 2022  – as inflationary pressures finally started to recede. If this dynamic is sustained we expect the upward trajectory to continue.  

Our first theme for 2024 is the growing interest among financial sponsors in the upside of artificial intelligence. It’s no surprise that private capital is flooding into a technology that has become the biggest investment priority for global businesses according to a recent survey by KPMG, but how sponsors are looking to seize that opportunity is perhaps less expected. We examine their desire to target proprietary data sets in order to create new businesses harnessing pre-trained AI models and explain some of the ways these tricky deals can be de-risked.

After signs of an uptick in European public takeovers during the second half of the year, our partners highlight the prospects for further public-to-private transactions in the months to come – and highlight some of the subtle nuances in how successful P2P deals are constructed across a variety of European markets.

Then, in the first of two sector-focused stories, we assess the likelihood of M&A activity among asset managers. Challenging market conditions are driving listed and private managers alike to seek protection in scale, while private firms are also targeting boutiques in hot areas such as private credit as they look to diversify their asset focus. With the value in these deals largely resting on the retention of key individuals and assets under management, we explain how to preserve both through the deal process.

Finally, we share our expectations for an uptick in life sciences M&A. The sector is staring at its biggest patent cliff for more than a decade, with protections on drugs that generate sales of more than USD200bn set to lapse between now and 2030. The last time such a significant portfolio went off-patent over a similar timeframe it sparked a run of big-ticket deals, and we’ve started to see some significant players look to fill the revenue gap through M&A. However, there are reasons why we might not be looking at another period of industry consolidation, from the nature of the drugs themselves to the U.S. election and, yes, the rise of AI.