It seems investment bankers have been called off the sidelines after a protracted fallow period for deals. 

In Los Angeles, firms overwhelmingly signal optimistic outlooks for merger and acquisitions as well as initial public offerings, even as the interest rate outlook remains cloudy following the latest Federal Reserve pronouncements.

Last year, mergers and acquisitions activity fell to its lowest level in 10 years, while IPOs dropped to 2019 levels. This drought, dating back to the rapid rate hikes seen in 2022, stood in stark contrast with the two years prior, when pandemic monetary stimulus from central banks motivated companies and private equity firms to swiftly close deals.

Now, however, private equity groups are sitting on record amounts of dry powder and firms need to answer to investors impatient for liquidity. 

The largest banks in the country have already pounced on the thawing signs. In the latest first-quarter earnings for big U.S. banks like JPMorgan, Goldman Sachs and Morgan Stanley, investment banking fees ticked up across the board.

Notably, Goldman earned $2.08 billion in these fees, up 32% from a year earlier and beating analyst expectations.

The boutique investment banking scene in Los Angeles highlights the artificial intelligence boom and medical advancements as just some of the industries ripe for deals. 

This special report features Q&As with some of the bankers ready to meet the market.

Read more here and here.

— Taylor Mills