Wall Street consiglieri are readying for a rush of new business. Bankers who advise on capital raisings or mergers and acquisitions expect a deluge of fees as Donald Trump returns to the presidency. But some clients are suddenly more valuable than others.
The potential snapback in deals is enormous. Global mergers are traditionally equivalent to around 20 per cent of US GDP in any given year, but in 2024 are around half that. If M&A volumes bounced to 25 per cent, as in 2021, that’s $4tn of additional activity. Fees range anywhere from 1 to 5 per cent for banks that win hearts, minds and mandates.
First in line is Goldman Sachs. A fifth of its revenue typically comes from M&A and underwriting, versus less than 10 per cent at Bank of America, which also runs a huge retail bank. Goldman generally tops the merger advisory ranks, with rival Morgan Stanley second or third. Goldman boss David Solomon has been positioning to pick off artificial intelligence-related deals too, assembling a special council for the purpose.