(Bloomberg) -- Barclays Plc’s Stephen Dainton is preparing for a wave of dealmaking this year as more US companies have been buoyed by rising stock prices, giving them more firepower to go out and pursue acquisitions.
“I’m hopeful that the capital markets cycle in equities and in M&A will evolve during the course of 2025,” Dainton, Barclays’ head of investment bank management, said in an interview with Bloomberg Television. “Importantly, I think driven perhaps by the multiple divergence that you have in the US and in Europe.”
The S&P 500 climbed 25% last year, outpacing gains made by similar benchmark indexes across Europe. That’s important because higher stock prices give potential acquirers a better currency with which to do deals. It also entices privately-held companies to consider going public to take advantage of the improved valuations.
An increase in corporate restructuring will also drive more investment banking activity, Dainton said.
“Corporates themselves are restructuring actively, whether that’s the boards themselves making a conscious decision to restructure and you have a higher level of activist activity in and around boards this year,” he said.
With his comments, Dainton joins a chorus of dealmakers who are hopeful that 2025 will help bring an end to a yearslong slump in M&A activity.
Barclays is the only European lender with a substantial investment-banking business in the US, which means its also poised to benefit from the expected uptick in capital-markets activity in the wake of incoming President Donald Trump’s inauguration. Already, the company has benefited from a surge in investment grade debt issuance in recent months, Dainton said.
Last year was a “constructive year” for dealmaking and trading activity, Dainton said in response to a question about what bonuses will look like for the company’s investment bankers and traders.
“It was a constructive year last year,” Dainton said. “Nothing is finalized for us.”
--With assistance from Lauren Tavener and Francine Lacqua.
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