Investment bankers have foreseen a “wave of pent-up M&A” for years. After many false dawns, predictions may finally be coming true – if advisory fees are anything to go by. 

Investment banks Goldman Sachs, JP Morgan and Morgan Stanley, Bank of America and Citigroup all reported double-digit increases in investment banking revenues in Q3 2025, citing a meaningful increases in M&A volumes and rising capital markets activity as key drivers of fee growth.

Advisory and underwriting teams have benefitted from rising global M&A activity, with high double digit gains in in deal value in the Americas (up 51.6% year-on-year) and EMEA (up 41.6% year-on-year) offsetting a dip in APAC transaction flow, according to figures from Datasite and Mergermarket.  

After a slow start to the second quarter, when dealmakers put transaction work on hold to digest the impact US tariff announcements on global trade and company earnings, M&A has subsequently rallied, as private equity firms and corporates took confidence in the resilience of the global economy following tariff announcements, growth in AI investment, and interest rate cuts in the US, UK, and Europe during the last 12 to 18 months.

Sustained recovery or one-off spike?

The question now facing M&A stakeholders is whether increasing investment bank M&A advisory revenues signal the firing of the starting gun for a sustained M&A rebound, or represent a one-off boost in a still volatile market.

Impressive Q3 2025 M&A figures have been boosted by mega-deals worth more than US$10 billion. According to Boston Consulting Group the number of jumbo US$10 billion transactions increased from 21 during the first nine-months of 2024, to 27 across the same period in 2025.

The increasing number of large cap deals points to improving sentiment and confidence in M&A markets, but also highlights a concentration of activity at the top end of the market. In the Americas deal value climbed even though volumes declined, and trend that played out particularly starkly in EMEA, where year-on-year deal volumes were down by almost a quarter in Q3 2025, even as deal value showed significant gains, according to Datasite and Mergermarket.

Rising deal values will have to be matched by increases in deal volumes before the M&A market can be said to be in full on recovery mode.

Reasons for optimism

But while it may be too early to say that the M&A market is well and truly back, the positive momentum in Q3 2025 has continued to build.

In early November dealmakers announced M&A deals worth more than US$80 billion, according to Bloomberg, led by Kimberly-Clark’s US$40 billion acquisition of Kenvue, the maker of Tylenol, a transaction that will see Kimberly-Clark leapfrog Unilever as the second-biggest seller of health and wellness products after Procter & Gamble.

This shows an appetite among dealmakers to undertake transformative deals that strengthen market share and expand revenues. Investors, meanwhile, are rewarding companies that go on the front foot and pursue M&A that drives scale and growth,

Analysis of Q3 2025 deals by consultancy WTW and Bayes Business School shows that the share prices of companies executing M&A deals worth US$100 million or more during the previous three months outperformed businesses that didn’t engage in M&A by 11 percentage points.

Possibly the most encouraging signal that this time forecasts of rising M&A have legs, however, is how investment banks are gearing up ahead of 2026.

Leveraged finance teams within banks have underwritten around US$65 billion of debt to finance leveraged buyouts in 2026, showing their confidence that buyout deal volumes will return in earnest in the year ahead.

Bloomberg also reports that remuneration packages on Wall Street are expected to increase in 2025, with a rise of between 10%-15% in investment advisory pay forecast. The projected increase in pay deals reflects an improving flow of M&A work, as well as investment in deal teams in anticipation of ongoing flow in the coming months.

It seems that investment banks aren’t just predicting an increase in M&A, but also in the investing and underwriting behind it.