Market experts and economists forecast that 2025 will usher in a resurgence in capital markets and M&A deal activity. Signs of growth in 2024 marked a shift from M&A levels at 20-year lows, and offered hope for activity in 2025. The sentiment is echoed among industry leaders: “We have more deals already coming into the market in 2025 than we had in the last two years,” observed Jeffrey Levine, Global Co-Head of Financial Services at Houlihan Lokey, at the Frontiers of Digital Finance Conference in January. As the industry emerges from a lingering dryspell and teams are calibrating for a flurry of activity, generative AI will serve as a critical resource for investment banking teams to simplify deal research and surface critical insights in record speed.
Meanwhile, the growing integration of cryptocurrency and blockchain technology represents another shift in the sector driven by tech advancements. The recent announcement of the development of a cryptocurrency reserve reflects the evolving, widespread adoption of digital currency in financial markets.
Below, we outline some of the trends shaping the sector in 2025, including generative AI, and leverage the AlphaSense platform to surface leading expert insights, broker research, and the market intelligence essential to solidify deals.
The Return of Deals — With Potential Hiccups
M&A activity is expected to rise 10% in 2025, following an increase of 13% last year. Heading into 2025, a more robust deal environment started to fuel up as a result of lower interest rates, stabilized inflation, and potential legislation supporting deal activity from the new administration.
According to broker research sourced from the AlphaSense platform, Q1 2025 marks a push-out period while C-level and boards process evolving administration policies including tariffs, regulatory changes, and the DOGE effect. Analysts expect boards will become comfortable with economic outlooks and will leverage the friendlier regulatory environment.
While the deal environment is seemingly primed, there is lingering uncertainty around tariffs, geopolitical conflicts, and fluctuating macroeconomic conditions that could affect momentum in the market. Market volatility due to trade policy concerns, lower consumer spending confidence, and grumbles of a potential recessionary environment sent stocks plummeting last week to their lowest levels since September 2024.
Generative AI’s Vast Reach
Deloitte’s 2025 M&A Trends Survey found that 97% of 1,500 executives acknowledged their organizations have started incorporating generative AI or advanced data analytics into their dealmaking processes.
The integration of generative AI (genAI) is transforming the investment banking landscape by optimizing processes throughout the entire deal lifecycle that are typically manual and time consuming, such as deal sourcing, identifying target companies, due diligence processes, and pitch refinement.
Simplifying Deal Research
Since analysts often work on several high-stakes deals simultaneously, generative AI can help distill high volumes of company, industry, and market information into meaningful conclusions. This research provides the foundation for valuations and strong investment theses.
With AlphaSense’s Generative Grid tool, analysts can piece together key financials, industry trends, or broker insights on a particular company or topic as a side-by-side matrix. Generative Grid can be customized or leveraged as a pre-built template as an earnings analysis grid, CIM analysis for key financials, DDQ or RFP review, expert interviews, and industry peer comp.
As illustrated above, a pre-built Corporate Actions & Capital Allocation grid can be customized with target company quarterly transcripts to highlight strategic developments such as “What is the company saying about strategic actions such as M&A, spinoffs, acquisitions, division separations, inorganic growth, portfolio strategy.”
Surfacing Critical Insights
Generative AI tools are becoming remarkably indispensable, surfacing trusted insights that help to seal the deal on an investment pitch. With a simple query in AlphaSense’s Generative Search tool, you can unlock curated insights on any industry, trend, or company across our vast library of premium documents, including broker research from the world’s top banks and over 175,000 expert interviews with expansive private markets coverage of 17,500 companies and 76,000 transcripts. With in-line citations and vetted responses, it’s like having a virtual analyst that works exclusively for you.
Differentiated Insights With Internal and External Content
With AlphaSense’s Enterprise Intelligence, analysts can search and interrogate their own content — including internal research, pitch decks, CIMs, and management meeting notes — for differentiated insights that matter, such as “how has our thesis on a company changed?” The internal search feature is paired alongside our repository of over 450 million premium external documents for the most comprehensive, well-rounded insights.
Having the right genAI tools is the difference between spending weeks or minutes on your research, and surfacing lucrative deals versus going down a dead end. To make decisions with conviction, teams need the full picture — with generative AI tools that can query and search on both internal and external premium content.
A Growing Overlap with Private Equity
Evolving generative AI capabilities can also streamline the critical functions investment banks perform for private equity (PE) deals. Investment banks and PE firms are seeing an increase in overlapping deals, particularly as private equity deals heat up. According to EY, PE deals are contributing significantly to M&A momentum, accounting for 42% of January’s deal value with dry powder at record highs and lower interest rates facilitating debt-heavy leveraged buyouts.
Investment banks serve as a crucial intermediary between private equity firms and the capital markets, providing access to deals and funding opportunities by:
- Sourcing and identifying lucrative investment opportunities, or by working with private equity firms that are ready to invest
- Leveraging their expertise to arrange the necessary funding, which may involve securing a combination of debt and equity financing that best suits both the investors and the target company
- Conducting comprehensive due diligence on a target company’s financials, operations, and growth potential to minimize risks and ensure the investment aligns with the strategic goals of all parties
- Collaborating to structure the deal, including determining the size, valuation, and terms of the investment to align both parties’ interests
To best tap into private equity deal momentum, banks must be well equipped with comprehensive market intelligence including the same expert transcript libraries used by PE teams, otherwise they may be at a competitive disadvantage. AlphaSense’s exclusive expert transcript library features coverage on 17,500 private companies and 76,000 private company transcripts.
In an expert interview sourced from the AlphaSense platform, a director at MidCap Financial, a subsidiary of Apollo, provided insight into the importance of relationships with investment banks in long-term deal management:
“It’s helpful to have the relationships directly with management teams, just because if things go sideways, it helps to work alongside when you have a pre-existing relationship. Really, on that note, if you know an executive and you know that a borrower of yours is looking for, say, a CFO and you say, “Hey, sponsor, again, who I have the primary relationship with, I know this relationship. I have a relationship with a CFO who I think would be a pretty good fit here. Why don’t you consider giving him or her a look?” That’s value added. That’s the kind of value that you’re bringing to your sponsor in hopes of, again, just getting the call on the next deal down the road.”
Blockchain & Cryptocurrency Integration
The recent announcement of a federal crypto reserve marks the widespread integration of digital currency and blockchain technology in the financial ecosystem. Adoption of blockchain technology by investment banks stands to “disrupt the status quo” by streamlining several key areas across operations, compliance, and data governance:
- Trade reconciliation and settlement timeframes
- Know Your Customer (KYC) rules
- Anti-Money Laundering (AML) laws
- WORM (write-once-read-many) compliance data archival
- Compliance tracking & process automation
The optimization of these critical functions is likely to generate significant cost savings, standardize operational best practices, minimize fraud and cybercrime, and promote enhanced transparency.
Accordingly, many investment banks are exploring or actively integrating blockchain technology. Recently, Bank of America announced its plan to launch a branded stablecoin tied to the U.S. dollar, subject to regulatory approvals. Bank of America’s CEO suggested that crypto transactions, once regulated, could exist in the banking system alongside credit cards and Apple Pay, also revealing that “[they] have hundreds of patents on blockchain already.”
Stay Ahead of Trends with Industry-Leading GenAI
Industry-leading platforms like AlphaSense are delivering breakthrough genAI capabilities for the most comprehensive, trusted intelligence and insights that drive dealmaking. With AlphaSense, the average high-volume financial services client experiences an astonishing 734% ROI in their first year.
Perfect your investment pitch, stay ahead of fluctuating market trends with ease, and win more deals. Discover how AlphaSense’s industry-leading Generative Search and Generative Grid capabilities expand your team’s resources with intelligence you can trust.
