Very fortunate to have had the opportunity to speak with Inc. magazine’s veteran journalist Chris Morris recently about what’s really happening behind the scenes in today’s dealmaking environment.
At the start of 2025, most of us in private equity expected this to be a rebound year for both M&A and IPOs. But as the first quarter wraps up, we’re seeing a very different story unfold. Fewer than 80 M&A deals were announced—the lowest we’ve seen since the peak of pandemic-driven uncertainty in mid-2020.
While headlines focused on the high-profile $32 billion acquisition of Wiz by Alphabet, that deal was an outlier. The broader market is feeling paralyzed—not necessarily by a lack of capital or interest—but by the volatile and fast-changing trade policy landscape.
Even with a 90-day pause on “reciprocal” tariffs (except for China), the reality is that no one knows what the next policy shift will be. That ambiguity is keeping founders, investors, and strategic buyers on the sidelines. If we don’t know the cost of goods six months from now, how do we underwrite a deal today?
As I shared with Chris:
“If the trade war persists indefinitely, we’re not just looking at temporary disruption—we’re witnessing a structural rewrite of how global private equity operates. Supply chains will localize, global arbitrage will compress, and investment theses will shift toward resilience over scale.”
It’s no longer about growth at all costs. It’s about who can adapt.
Even outside of tariffs, there’s a growing shift in how deals are evaluated. The companies that once commanded premium valuations based on international expansion and global scale are now being scrutinized for their exposure to policy volatility, reliance on fragile supply chains, and adaptability.
The private equity lens has shifted. Today, we’re evaluating investments based on how nimble a company is. Can they reconfigure logistics? Can they manufacture domestically? Can they survive—not just a market downturn—but a geopolitical jolt?
“Our focus extends beyond trade policy navigation,” I shared.
“We’re looking for businesses that can localize their operations, adapt their models, and thrive in a fragmented global economy.”
The irony is that regulatory bodies are more open to approving M&A deals today than they were even two years ago. But most of those deals aren’t even making it to the regulators—because buyers and sellers can’t agree on pricing, risk assumptions, or what the future even looks like.
As Professor George Georgiev from Emory University told Chris, the bottleneck isn’t at the government level—it’s at the negotiation table. And that won’t change until the macro environment offers a bit more clarity.
There’s still capital to deploy, and plenty of great companies out there—but the rules have changed. For founders considering exits, the message is this:
This isn’t just a temporary pause—it’s a fundamental reset. And those who get ahead of it will have a real edge.
“We’re not just looking for the next big thing—we’re looking for the next resilient thing,” I said.
And that’s where the next wave of value will be created.