It was August 2023, and Matt Swain had five offers on the table for Triago, the company where he’d recently ascended to CEO. He’d built the mightily profitable franchise in an obscure corner of private equity called “directs”—essentially pairing solidly run businesses that wanted to sell, with family offices looking for outsize returns. Now, suitors comprising top banks from Spain and Korea, a leading U.S. private equity firm, a major Midwestern lender, and a giant Asian trading house were circling.
But as Swain weighed the offers, one stood out—from Bob Hotz, chairman of corporate finance and acquisitions chief at mid-market investment banking powerhouse Houlihan Lokey. He felt sure that Houlihan would provide the best home for himself and his team. So he was crushed when an email arrived: “We regrettably will withdraw from considering the purchase of Triago,” wrote Hotz, but noted that “you were the primary reason for our interest,” and graciously suggested they meet for a quick coffee at 9:20 the next morning.
Swain didn’t expect much. “I didn’t even wear socks with my loafers. I never wear socks at any casual, inconsequential meeting,” he recalls. “I just wanted to get veteran Bob’s advice on which offer to pick.” At breakfast, the hyperkinetic youngster quizzed the silver-coiffed, soft-spoken Hotz, who’s a half-century his senior. “Given the time limit, I was talking so fast I didn’t even touch my usual avocado toast. I asked Bob: ‘Which one is the right fit?’ And Bob does a total flip, and says, ‘I think we’re the best partner.’”
At 11 p.m. on Wednesday, Aug. 30, Hotz called Swain to declare he was in—but only on the condition that Swain leave his house full of guests on Nantucket and fly to London the Sunday of Labor Day weekend for a rapid-fire session of due diligence. Swain agreed and boarded the red-eye to Heathrow toting a bulging roller suitcase packed full of financials. By the following Friday, Houlihan Lokey had clinched the whirlwind purchase, reportedly for well over $100 million.
The marriage created a force to watch on Wall Street, between a whiz kid with a knack for dealmaking, and the giant mid-tier investment bank you’ve probably never heard of. In his early twenties, even before joining Triago, Swain beat the Wall Street pros in recognizing that the burgeoning wealth of family offices meant there was high interest in purchasing individual companies, rather than investing in “blind pools” of enterprises assembled by the private equity (PE) giants.
The founders of those family offices had often built and sold their own companies, and they and their heirs relished “kicking the tires,” instead of having a Carlyle or TPG decide for them. To satisfy that appetite among the super-wealthy, Swain developed a wide network of venturesome “independent sponsors,” operators that obtained letters of intent to purchase private, midsize businesses that did everything from making routine airplane parts to marketing Disney-branded souvenirs at a predetermined price.
That process where investors cherry-pick their own deals rather than, say, joining fund No. 7 of a PE colossus, is called “directs.” It’s existed for decades, but in his five years at Triago, Swain has proved the prime mover in taking the sector from backwater to big business, and became king of the realm. By Fortune’s estimates, drawn from industry data, the value of all direct deals, using the broad definition of single investments in private companies, will explode to something like $200 billion this year, multiple the number several years ago.
Still, “directs” have a way to go before they pose any sort of real threat to the PE giants. Though Swain has big plans, there has yet to be mass adoption by the traditional stalwarts of PE—the big pension funds, insurers, and endowments. Those huge institutions still overwhelmingly choose pools, where they can put tons of money to work quickly without specialized teams needed to parse these bespoke deals. Meanwhile success attracts competition—and Swain’s fat returns (garnered by buying and fixing cheap, overlooked, small and midsize companies) are attracting more and more competitors, a trend that could hike prices and reduce profits.
But no challenges seem to faze Swain, who has developed a vast Rolodex featuring the investment arms for the clans of late real estate magnate Sam Zell and ambassador to the U.K. Warren Stephens, plus the Romneys and Bloombergs, among a panoply of luminary names. He proved an expert at curating a cast of top sponsors and identifying the investments that promised—and a few years later delivered—big, PE-beating returns. “Pre-Matt, we had to find the independent sponsors, and it was difficult,” says Duran Curis, founding partner at Ocean Avenue Capital Partners, who manages a $2 billion portfolio of 140 directs. “His big contribution is that he finds them for us, and presents the best opportunities.” Now, paired with the muscle of Houlihan Lokey, Swain has big plans to start selling to pension funds, endowments, and asset managers.
Adds David Feierstein, cofounder of Ronin Equity Partners, an investment firm for which Swain’s raised several hundred million dollars to fund half a dozen purchases, “If you didn’t have someone as aggressive and charismatic as Matt, the directs industry wouldn’t be nearly where it is today. Matt had the first mover advantage. In directs, Matt runs the show.”
The charm offensive
There’s something rare about Swain, who is a young brainiac, but one who has built his business the old-fashioned, pre-quant-trading and Excel models Wall Street way, via charm offensives that weave webs of tight relationships few rivals can match. It’s remarkable that this super-hustler comes from a highly privileged background. He grew up in Greenwich, Conn., son of the CFO of a prominent hedge fund. His ancestors were the original owners of Nantucket island. “Matt tells me his family had been coming to Nantucket for generations. So we’re walking to get coffee and we pass Swain Street, then Swain House, then we go to the Whaling Museum and get greeted by half a dozen portraits of his forbears,” says Rupert Edis, CEO of the Landon family office that includes Landon Capital Partners, a long-standing investor in Swain’s directs.
After graduating from Colgate University, where he served as student body president and starred in squash—he’s still one of the best amateur players in Manhattan—Swain joined Stifel, in a “placement agent” unit that raised money for hedge funds. The managers were amazed that family offices weren’t returning their calls, so they assigned Swain to find takers from a “dead list” of 1,000 mostly wealthy clans. The green recruit got mostly noes, upbraidings, and even a “You’re a midget!” from the respondents who didn’t hang up, but he also learned there was a gap in the market.
Swain played matchmaker. He found that independent sponsor IVEST needed funding for a plush toy purveyor called Dan Dee, and brought their leaders to Solamere, the family office representing the Romneys, former Walmart CEO Lee Scott, and other wealthy investors. Swain raised $100 million to notch the purchase. By 2018, he found a spot that was just small and daring enough to take a flier on his vision of building a whole business around directs: Triago, the firm founded by Frenchman Antoine Dréan that did a thriving trade in a close cousin, finding buyers for limited partners (LPs) that sought to sell their stakes in private equity pools.
Swain quickly turned directs into Triago’s profit driver. Over three years, he raised $3 billion in equity capital for 35 deals that, including debt, backed over $10 billion in purchases. In April 2022, Dréan named his 27-year old comer as CEO.
While Big PE typically delivers twofold returns to investors over a longer holding period, directs aim far higher. “Our investors are looking for returns of 3x or more,” says Patrick Zyla, managing director of Castle Harlan, a firm that Swain has worked with extensively.
Regular PE funds famously charge around 2% a year on all investors’ funds, whether or not they’ve been put to work yet. The directs sponsors typically don’t charge any fees at all, and even better, don’t get paid unless they deliver big-time. The industry’s giants usually get a fixed “carry” of 20% of profits when companies are sold. But directs deals are usually structured so that the sponsors garner zip until they hit a 2x bogey. Over that number, they start collecting 20%, but their take accelerates sharply with each multiple of their investors’ stake they return. If the sponsor-managers hit 5x, they can pocket as much as 40% of the gain.
“If you didn’t have someone as aggressive and charismatic as Matt, the directs industry wouldn’t be nearly where it is today.”David Feierstein, cofounder of Ronin Equity Partners
Sam Zell, who along with his team funded a number of Swain’s deals, absolutely loved this ultra-“skin in the game” aspect of directs. (Swain relates that Zell liked having his photo snapped alongside the youngster, as Swain was only slightly taller than the late bantam tycoon.) Zell and the president of the Zell family office EGI, Mark Sotir, would push Swain to arrange transactions that raised the bar for capturing a share of the profits, but gave the management teams an even bigger score for fabulous results.
That makes Houlihan Lokey’s pitch particularly appealing right now, given that PE has seen a sharp drop-off in exits: According to Hamilton Lane, a firm that invests on behalf of pension funds, as of 2021 PE firms were still holding 45% of their buyout deals five years following their purchase; last year, around 65% were still sitting unsold after a half-decade.
Meanwhile Swain’s model thrives on speed. With directs, the money comes fast, and so do the fees. It typically takes placement agents working on behalf of PE firms nine to 18 months to raise a full fund. But once the Swain gang gets a mandate from a sponsor, he and his bankers regularly make the rounds and secure the funding in eight to nine weeks. His team of 40 also concentrates on bigger and bigger deals that swell their take from the average directs transaction. This year, he expects to do around a dozen deals at an average enterprise value of $200 million to $400 million. “That’s much, much bigger than the average in the industry,” he avows. “We’re now working on one worth $2 billion, and the numbers will keep climbing.”
That expanded holding time, and LP thirst for liquidity, should especially benefit the first field where Swain and Houlihan Lokey envisage big expansion beyond traditional directs: so-called continuation vehicles, or CVs, where a fund tags an outstanding company promising great things, and doesn’t want to sell as it exits the other holdings. Today, Evercore is the biggest player, but Houlihan is rising. CVs cash out most of the existing LPs in that star “keeper” at a good return, and replace them with a fresh crop that sees big gains ahead by keeping and growing the standout for another, say, three or four years. The company spins off from the fund and continues as a stand-alone. The newcomers are once again going “direct” since they’re shopping on a deal-by-deal basis.
The second offshoot is what’s known as “co-investment.” PE firms increasingly seek to raise money beyond what the original investors contributed to a given fund. Say the managers see a software provider on the block at a bargain price, and want to add it to a tech portfolio. Or the “concentration limit” on any one purchase is $300 million, and they’d hate to miss out on a perfect fit at $450 million. Or the goal may be clinching a big add-on acquisition, or satisfying an unforeseen surge in sales by constructing new plants. In all those cases, the fund may lack the capital for seizing the opportunity. It may have $300 million still in its coffers and need a couple of hundred million more.
Swain and the Houlihan Lokey team view the area, still in its infancy, as a huge field for lucrative fundraising and investment-banking business. It’s a good deal for the fund LPs because they pay no fee or carry on the additional capital. The new investors pay carry at a rate that’s closely tied to performance: The percentage starts low and rises depending on the level of profit achieved. The arrangement empowers the co-investors to pick and choose their own individual deals, the great lure of directs in general.
Instead of coming from the small sponsors that Swain has mainly represented in the past, these opportunities are flowing from big, established PE outfits that have run these candidates for years, and can show impressive track records, both for the co-invest property and the firm’s overall performance. That imprimatur greatly heightens their appeal.
“A commercial thought every minute of every day”
At Houlihan Lokey, Swain persists in the headlong roundelay of networking that’s his calling card. He does most of his business in a five-block radius of Midtown Manhattan. He resides in a Moorish-themed, Park Avenue high-rise, where he rents an apartment from Eric Trump; Ivanka Trump is his neighbor. Swain does his primary dealmaking at two nearby eateries, tony French venue Le Bilboquet and the LoewsRegency Bar & Grill. “I do back to back breakfasts at Loews, then a lunch at Bilboquet,” he avows. “Then in the evening it’s three chapters. First a cocktail at Bilboquet, then a real dinner, then an elongated catch-up over drinks. Before I hit 30, it would stop at midnight. Now that I’m 30, it’s over by 11:00 or midnight.” In the interests of efficiency, Swain changes tables when the new guest arrives, even if the old guest is still sitting there. Notes Tom Burchill, managing partner of PE firm Seven Point: “He bounces from one pole to another. Once, I got him for 45 minutes at Bilboquet. Lucky me.” When on Nantucket, Swain zooms around the island in a hard-bottom, Navy SEAL–style, super-high-speed raft, a type deployed by the military in Ukraine. He had it imported, and the money went to a manufacturer looking to support jobs in the beleaguered nation.
His business associates view him as both blithely charming and, in a word, obsessed. “Matt thinks a commercial thought every minute of every day,” observes Hotz, whom Swain reveres as “Uncle Bob.” Adds Mike DiPiano, managing general partner at tech PE firm NewSpring Capital: “He’s a young man selling at all times.” His ability to attract top older notables is remarkable. “He’s got this old soul for a young guy, and it’s infectious,” says Kevin Wilcox of the Stephens family office. Edis, of the Landon family office, praises Swain’s knack for “attracting powerful mentors and allies” and calls his ability to accomplish tasks in a jiffy as “Napoleonic”—at 5-foot-8, by the way, Swain is midsize, like the companies he markets.
Though Houlihan Lokey bought Triago 18 months ago, each side is already bringing the other big benefits. It’s astounding that the firm is so little known. Houlihan ranks as the world’s largest investment bank for midsize private companies. It’s also been the top performer on Wall Street for rewarding investors over the past decade, and by a lot. In that span, it’s delivered total shareholder returns of 26.4% a year, beating such fellow boutiques as Lazard (5.9%), Jefferies (13.2%), Moelis (17.2%), and Evercore (22%), while also waxing big guys Citigroup (9.3%), Bank of America (14.5%), Goldman Sachs (18.0%), Morgan Stanley (19.9%), and J.P. Morgan (20.3%). Back in the fall of 2015, Houlihan’s market cap trailed those of Jefferies, Lazard, and Evercore. Now at $13.6 billion, it’s bigger than all three.
A major plus in terms of the synergy at the newly combined company: the directs investment, fund investment, CVs, and co-investments originating from Houlihan Lokey’s PE clients. In 2023 Atlas Merchant Capital, a combined hedge and PE fund headed by former Barclays CEO Bob Diamond, worked with Houlihan as its advisor to MarshBerry, in a significant fund investment for that leading platform in the insurance brokerage space. Diamond is a Swain fan and was one of the Triago bidders. Now that Swain has joined Houlihan, Diamond is giving the firm business on both the fund investment and directs sides; he’s recently engaged the Swain team on securing follow-on capital for Atlas portfolio companies.
The CV connection is also spouting advisory fees for Houlihan Lokey. Last October, Swain raised the money for PE fund NewSpring, renowned for scoring big from buying Nutrisystem in the 2000s, for a vehicle that combined two of its star portfolio holdings. “You realize that if you could just hold these investments longer you’ll get much more out of them,” says cofounder DiPiano. Over sundry phone calls, Houlihan provided investment banking guidance to the family office investors, parsing the transactions’ pros and cons.
In co-invests, Riverside, a $14 billion PE firm that had been a Houlihan Lokey client for years but never worked with Triago, was seeking additional co-investment equity as a way to attract new limited partners and close on two fresh investments. Via the Houlihan connection, in stepped the Swain team. “We were introduced to dozens of LPs in short order, and secured investments from a number of them,” says Peggy Roberts, a managing partner at the firm. “Partnering with Houlihan has helped us forge sustained relationships with firms we would not have met otherwise.”
In the past nine months, Houlihan has raised over $500 million to secure three purchases for Swain’s stalwart customer Ronin. In June, the Swain contingent provided Ronin the funding to buy a company that repairs and overhauls systems for commercial aircraft. Houlihan conducted analysis on behalf of the family office investors. In April, Landon Capital Partners (LCP) scored a big hit via the sale of its portfolio holding, Wisconsin cheesemaker Heartisan Foods, where it partnered with Ronin on a deal in which Triago had raised the money. Through the Swain link, LCP has awarded Houlihan two mandates, one for a debt financing of a portfolio company, and another to explore a sale.
Early this year, the directs franchise collected $75 million in equity and debt for Seven Point to buy Frazier Aviation, producer of structural parts for military aircraft. Now, Seven Point is strongly considering Houlihan Lokey to provide the mark-to-market valuation analysis of its portfolio holdings to deliver to investors.
The rewards also go the other way. Liberty Hall, a PE sponsor focused exclusively on aerospace and defense, is a long-standing Houlihan Lokey client, and had hired Triago before the acquisition to lead a CV. The tie-up has further deepened its Houlihan relationship. Liberty Hall hired Houlihan to raise the capital for a classic direct that closed earlier this year. Between the CV and direct, Houlihan secured $250 million for Liberty. It’s also working with the Houlihan M&A group to seek new purchases.
Edis, chief of the Landon family office and a protégé of its founder, the late swashbuckling billionaire Timothy Landon, who’s legendary as the chief political advisor to his military school chum, the sultan of Oman, notes that Swain gives Houlihan Lokey an extra edge. “Matt’s been crucial in upselling Houlihan’s other services. As investments move through their life cycle, they need M&A, debt refinancing, and finding buyers for the final sale, and the natural thing for one of Matt’s companies is for Houlihan to take on that work,” says Edis. “We’re doing a new refi with Houlihan because of the cycle that began with Matt.”
In April 2025, the firm promoted Swain as co-head of its equity capital solutions group. The unit encompasses both the equity and debt fundraising franchises; according to sources on Wall Street the group generates $400 million to $500 million a year in revenue—that’s as much as a quarter of the $2.4 billion the firm posted in fiscal year 2025, ended in March.
Swain’s section is highly lucrative. From industry sources, Fortune estimates that at an annual run rate, the three directs areas combined—the traditional variety, CVs, and co-invests—are raising well over $5 billion a year. From studying this highly fragmented industry, Fortune concludes that Houlihan Lokey leads the field in combined classic directs and CVs; in directs alone, it holds a market share of around 10%.
For Swain, the rise of directs presages nothing less than a revolution in the world’s financial markets. “In the future, more and more institutional investors like pension funds and endowments will follow the family offices in buying individual companies, just as investors pick stocks. Instead of investing in a pool, they’ll invest directly into a company’s equity,” he declares. “In other words, directs will make the private market for companies much more liquid so that it looks like the public market for stocks.” Swain predicts that within a decade, the total size of the three classes of directs will be attracting the same annual volume of new funds as traditional PE commands today.
“In the future, directs will make the private market for companies much more liquid so that it looks like the public market for stocks.”Matt Swain
Already the Ventura County Employees’ Retirement Association is launching a program that will spend up to $20 million on directs co-investment this year, and the Texas Municipal Retirement System plans to dedicate as much as $15 billion over the next five years, adding extra growth capital to individual holdings in PE funds. “The large pension funds are migrating to smaller managers in the lower-middle-market and middle-market space because that’s where they’re seeing the highest returns,” says a leading investment advisor to the PE industry.
Swain’s PE customers praise his analytical skills in identifying the most promising deals. “He did intense due diligence on the Frazier Aviation deal, where we’re sponsor,” recalls Burchill of Seven Point. “When Matt goes in front of investors and says it will be good, they listen to him. His credibility helped give us our choice of investors.”
The golden child has developed his own highly original approach in trawling for profit—even on the streets of Manhattan, where you’ll never find him inside a taxi. “No matter how hot or cold it may be, Matt will say, ‘Let’s walk. It’s better for networking,’” marvels Hotz. One day in September, this writer joined Swain on one of his excursions down Park Avenue, and on cue, he ran into Jack Oliver, who heads the PE firm Finback, alongside former Florida Gov. Jeb Bush. Two of the most outsize personas in private equity held their own little curbside summit, rapping on how they might connect on deals. I later asked the super-personable Oliver whether he or Swain is the more magnetic presence. Riposted Oliver: “I’d have to say I have the bigger personality. But he’s more successful.” One thing’s for sure, in a business that thrives on relationships, Swain will never stop working the room, the block, the island, the world, to bring deep-pocketed investors into his own corner of Wall Street.
U.S. stock futures dropped late Monday after global equities sold off as President Donald Trump launches a trade war against NATO allies over his Greenland ambitions.
Futures tied to the Dow Jones industrial average sank 401 points, or 0.81%. S&P 500 futures were down 0.91%, and Nasdaq futures sank 1.13%.
Markets in the U.S. were closed in observance of the Martin Luther King Jr. Day holiday. Earlier, the dollar dropped as the safe haven status of U.S. assets was in doubt, while stocks in Europe and Asia largely retreated.
On Saturday, Trump said Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland will be hit with a 10% tariff starting on Feb. 1 that will rise to 25% on June 1, until a “Deal is reached for the Complete and Total purchase of Greenland.”
The announcement came after those countries sent troops to Greenland last week, ostensibly for training purposes, at the request of Denmark. But late Sunday, a message from Trump to European officials emerged that linked his insistence on taking over Greenland to his failure to be award the Nobel Peace Prize.
The geopolitical impact of Trump’s new tariffs against Europe could jeopardize the trans-Atlantic alliance and threaten Ukraine’s defense against Russia.
But Wall Street analysts were more optimistic on the near-term risk to financial markets, seeing Trump’s move as a negotiating tactic meant to extract concessions.
Michael Brown, senior research strategist at Pepperstone, described the gambit as “escalate to de-escalate” and pointed out that the timing of his tariff announcement ahead of his appearance at the Davos World Economic Forum this week is likely not a coincidence.
“I’ll leave others to question the merits of that approach, and potential longer-run geopolitical fallout from it, but for markets such a scenario likely means some near-term choppiness as headline noise becomes deafening, before a relief rally in due course when another ‘TACO’ moment arrives,” he said in a note on Monday, referring to the “Trump always chickens out” trade.
Similarly, Jonas Goltermann, deputy chief markets economist at Capital Economics, also said “cooler heads will prevail” and downplayed the odds that markets are headed for a repeat of last year’s tariff chaos.
In a note Monday, he said investors have learned to be skeptical about all of Trump’s threats, adding that the U.S. economy remains healthy and markets retain key risk buffers.
“Given their deep economic and financial ties, both the US and Europe have the ability to impose significant pain on each other, but only at great cost to themselves,” Goltermann added. “As such, the more likely outcome, in our view, is that both sides recognize that a major escalation would be a lose-lose proposition, and that compromise eventually prevails. That would be in line with the pattern around most previous Trump-driven diplomatic dramas.”
Ahead of the World Economic Forum‘s Annual Meeting in Davos, Switzerland, Fortune connected with Goldman Sachs’ global co-head of investment banking, Kim Posnett, for her outlook on the most urgent issues in business as 2026 gathers steam.
A FortuneMost Powerful Woman, Posnett is one of the bank’s top dealmakers, also serving as vice chair of the Firmwide Client Franchise Committee and is a member of the Management Committee. She was previously the global head of the Technology, Media and Telecommunications, among several other executive roles, including Head of Investment Banking Services and OneGS. She talked to Fortune about how she sees the current business environment and the most significant developments in 2026, in terms of AI, the IPO market and M&A activity. Goldman has been the No. 1 M&A advisory globally for the last 20 years, including in 2025 — and Posnett has been one of the star contributors, advising companies including Amazon, Uber, eBay, Etsy, and X.
Heading into Davos, how would you describe the current environment?
As the global business community converges at Davos, we are seeing powerful catalysts driving M&A and capital markets activity. The foundational drivers that accelerated business activity in the second half of 2025 have continued to improve and remain strong heading into 2026. A constructive macro backdrop — including AI serving as a growth catalyst across sectors and geographies — is fueling CEO and board confidence, and our clients are looking to drive strategic and financing activity focused on scale, growth and innovation. As AI moves from theoretical catalyst to an industrial driver, it is creating a new set of priorities for the boardroom that are top of mind for every client we serve heading into 2026.
What were the most significant AI developments in 2025, and what should we expect in 2026?
2025 was a breakout year for AI where we exited the era of AI experimentation and entered the era of AI industrialization. We witnessed major technical and structural breakthroughs across models, agents, infrastructure and governance. It was only a year ago, in January 2025, when DeepSeek launched its DeepSeek-R1 reasoning model challenging the “moats” of closed-source models by proving that world-class reasoning could be achieved with fully open-source models and radical cost efficiency. That same month, Stargate – a historic $500 billion public-private joint venture including OpenAI, SoftBank and Oracle – signaled the start of the “gigawatt era” of AI infrastructure. Just two months later in March 2025, xAI’s acquisition of X signaled a new strategy where social platforms could function as massive real-time data engines for model training. By year end, we saw massive, near-simultaneous escalation in model capabilities with the launches of OpenAI’s GPT-5.1 Pro, Google’s Gemini 3, and Anthropic’s Claude 4.5, all improving deep thinking and reasoning, pushing the boundaries of multimodality, and setting the standard for autonomous agentic workflows.
In the enterprise, the conversation has matured from “What is AI?” just a few years ago to “How fast can we deploy?” We have moved past the pilot phase into a period of deep structural transformation. For companies around the world, AI is fundamentally reshaping how work gets done. AI is no longer just a feature; it is the foundation of a new kind of productivity and operating leverage. Forward-leaning companies are no longer just using AI for automation; they are building agentic workflows that act as a force multiplier for their most valuable asset: human capital. We are starting to see the first real, measurable returns on investment as firms move from ‘AI-assisted’ tasks to ‘AI-led’ processes, fundamentally shifting the cost and speed of execution across organizations.
Of course, all this progress is not without regulatory and policy complexities. As AI reaches consumer, enterprise and sovereign scale, we are seeing a divergence in global policy that boards must navigate with care. In the United States, recent Executive Orders — such as the January 2025 ‘Removing Barriers’ order and the subsequent ‘Genesis Mission’ — have signaled a decisive shift toward prioritizing American AI dominance by rolling back prior reporting requirements and accelerating infrastructure buildouts. Contrast this with the European Union, where the EU AI Act is now in full effect, imposing strict guardrails on ‘high-risk’ systems and general-purpose models. Meanwhile, the UK has adopted a “pro-innovation” hybrid model: on the one hand, promoting “safety as a service”, while also investing billions into national compute and ‘AI Growth Zones’ to bridge the gap between innovation and public trust. For our clients, the challenge is no longer just regulatory compliance; it is strategic planning and arbitrage – deciding where to build, where to deploy, who to partner with, what to buy and how to maintain a global edge across a fragmented regulatory landscape.
As we enter 2026, the pace of innovation isn’t just accelerating; it is forcing a total rethink of business processes and capital allocation for every global enterprise.
Given the expectation and anticipation for IPOs this year, what is your outlook for the market and how will it be characterized?
We are entering an IPO “mega-cycle” that we expect will be defined by unprecedented deal volume and IPO sizes. Unlike the dot-com wave of the late 1990s, which saw hundreds of small-cap listings, or even the 2020-2021 surge driven by a significant number of billion-dollar IPOs, this next IPO cycle will have greater volume and the largest deals the market has ever seen. It will be characterized by the public debut of institutionally mature titans, as well as totally disruptive, fast moving and capital consumptive innovators. Over the last decade, some companies have stayed private longer and raised unprecedented amounts of private capital, allowing a cohort of businesses to reach valuations and operational scale previously unseen in the private markets. We are no longer talking about “unicorns” — we are talking about global companies with the gravity and scale of Fortune 500 incumbents at the time they go public. For investors, the reopening of the IPO window will enable an opportunity to invest in the most transformative and fastest growing companies in the world and a generational re-weighting of the public indices.
In 2018, the five largest public tech companies were collectively valued at $3.3 trillion, led by Apple at ~$1 trillion. Today, the five largest public tech companies are valued at $18.3 trillion, more than five and half times larger. Even more significant, the 10 largest private tech companies in 2018 were valued at $300 billion. Today, the 10 largest private tech companies are valued at $3 trillion, more than 10 times larger. These are iconic, generational companies with unprecedented private market caps some of which have unprecedented capital needs which should lead to an unprecedented IPO market.
Each of these companies will have their own objectives on IPO timing, size and structure which will influence if, how and when they come to the market, but the potential across the board is significant. During the last IPO wave, Goldman Sachs was at the center of IPO innovation by leading the first direct listings and auction IPOs, and we expect more innovation with this upcoming wave. The current confluence of a constructive macro backdrop and groundbreaking technological advancements is doing more than just reopening the window; it is creating a generational opportunity for investors to participate in the companies that will define the next century of global business.
M&A activity exploded in 2025, are the markers there for another boom year?
As we enter 2026, the global M&A market has transitioned from a year of recovery ($5.1 trillion of M&A volume in 2025, up 44% YoY) to one that is bold and strategic. While the second half of 2025 was defined by a “thawing” — driven by a constructive regulatory environment, fed easing cycle and normalizing valuations — the year ahead will be defined by ambition.
We have entered an era of broad, bold and ambitious strategic dealmaking: transformative, high-conviction transactions where industry leaders are no longer just consolidating for scale, but also moving aggressively to acquire the strategic assets, AI capabilities and digital infrastructure that will define the next decade. CEO and board confidence have reached a multi-year high, underpinned by the realization that in an AI-industrialized economy, standing still is the greatest risk of all. The quality and pace of strategic discussions that we are having with our clients signals that the world’s most influential companies — across sectors and regions — are ready to deploy their balance sheets and public currencies to redraw the competitive map.
AI is no longer an isolated tech trend; it is a horizontal disrupter, broadening the appetite for strategic M&A across every sector of the economy. While the dialogue in boardrooms has moved from theoretical ‘AI pilots’ to large-scale capital deployment, the speed of technology is currently outpacing traditional governance frameworks. Boards and management teams are being asked to make multi-billion dollar, high-stakes decisions in a landscape where historical benchmarks often no longer apply. In this environment, M&A has become a tool for strategic leapfrogging — allowing companies to move both defensively to protect their core and offensively to secure the critical infrastructure and talent needed for non-linear growth. Success in 2026 will be defined by strategic conviction: the ability to turn this unprecedented complexity into a clear, actionable strategy and competitive advantage.
As AI continues to reshape corporate M&A strategy, we are also seeing financial sponsors return to the center of the M&A stage. Sponsor M&A activity accelerated sharply in 2025 — with M&A volumes surging over 50% as the bid-ask spread between buyers and sellers started to narrow, financing markets became more constructive and innovative deal structures enabled private equity firms to pursue larger, more complex transactions. With $1 trillion of global sponsor dry powder and over $4 trillion of unmonetized sponsor portfolio companies, the pressure for capital return to LPs has continued to escalate. Financial sponsors are entering 2026 with a dual-focus: executing take-privates and strategic carveouts to deploy fresh capital, while simultaneously utilizing reopened monetization paths – from IPOs to secondary sales to strategic sales — to satisfy demand for liquidity. With monetization paths reopening and valuation gaps narrowing, sponsors are entering 2026 with greater flexibility, reinforced by a healthier macroeconomic backdrop and improving liquidity conditions.
This Q&A is based on an email conversation with Kim Posnett. This piece has been edited for length and clarity.
Taking a career leap can be daunting, but all professionals inevitably have to face the music; most will change jobs or industries at some point, whether they want to or not. But for U.S. veterans exiting service and heading into civilian life, the transition has been especially difficult—and it’s an issue that’s intensifying their unemployment. That’s why financial services titan USAA is putting its money where its mouth is with a $500 million initiative to get members back on their feet.
“What we created here since I took over as CEO is a completely revamped way of hiring our veterans and military spouses,” the company’s CEO, Juan C. Andrade, tells Fortune. “This is not just for the benefit of USAA—this is for the benefit of the military community.”
USAA launched its “Honor Through Action” program in 2025, committing half a billion dollars over the next five years to improve the careers, financial security, and well-being of its customers—many of whom are active military, veterans, or related to them. It’s the brainchild of Andrade, who stepped into the company’s top role in April last year. As someone who also left a longstanding career in the federal government, he understands the growing pains that come with an intimidating career pivot. And for thousands of USAA members, the situation is dire.
Around half of veterans ditch their initial post-military jobs within the first year, according to the Department of Defense’s Transition Assistance Program, and USAA’s CEO believes a lack of thoughtful transition services is largely to blame. When colonels, generals, and sergeants leave behind their high-powered jobs, Andrade says some struggle to adapt both emotionally and skills-wise.
While businesses are required to re-employ former employees who return from military duty per U.S. federal law, those stepping into civilian roles for the first time often need a helping hand. And even before they exit the military, the careers of their partners tend to suffer.
The jobless rate of military spouses has hovered around 22% over the past decade, according to Hiring Our Heroes. That’s more than four times higher than the 4.6% nationwide unemployment rate. When their partners need to relocate for a new duty assignment, spouses are 136% more likely to be unemployed within six months, according to a 2024 Defense Department survey.
This trend of low job retention among veterans and spouse joblessness can be detrimental to the financial and professional livelihoods of American military families. So Andrade is leading the charge to get them on payroll. Corporations like JPMorgan have ramped up ex-military resources, and services like Armed Forces YMCA have long been assisting veterans; But USAA’s CEO says the issue needs a more targeted approach.
“While there’s a lot of organizations that are very well-meaning and do some very good work, the approach has been fragmented,” Andrade explains. “The problem with private sector companies is [if they] have not had that experience of service, or if they don’t have a large population of employees that serve, it’s very difficult to understand the fact that they’ve lost their tribe. The fact that, in a lot of ways, they’ve lost their sense of belonging to something greater than self.”
USAA’s $500 million plan and new fellowship pathways
USAA already has several veteran employment initiatives on the docket this year. This March, the company tells Fortune it will host a nationwide U.S. Chamber of Commerce Foundation program, Hiring our Heroes, in San Antonio to connect on the issue. And in the coming months, USAA will host events with nonprofit and HR association SHRM to brainstorm the best ways to improve military hiring in the U.S.
In stride with Honor Through Action, USAA also launched two 18-month fellowship programs designed to transition military personnel into full-time company positions: Summit and Signal. In three six-month rotations, participants cycle through different parts of the financial services giant to find the best fit. The future leadership track, Summit, rotates fellows through departments including business strategy, operational planning, and product ownership. Starting anew can be isolating, so USAA is ensuring that military personnel are not walking these career paths alone—veterans are connected to mentors every step of the way.
“Those 18 months are incredibly important, because it goes to show you: What is it that you can do? How does a private company actually work? What is it that you do on a daily basis?” Andrade says. “They get one-on-one mentorship and support every step of the way with people that have already walked in their shoes and been successful, so all of that helps.”
And just like what other companies are looking for in white-collar talent, USAA places a special emphasis on AI-savvy workers. That’s where the Signal fellowship comes into play: the pathway targets applicants with tech know-how, cycling them between assignments including technical solutions and data processing. The CEO notes that the military community is teeming with tech skills, and some already come with prior training from U.S. Cyber Command roles. Aside from getting ex-military members back into work, Signal is also proving to be extremely beneficial for the business itself.
“We’re always looking for people who have the expertise and skill sets in data science or data engineering,” Andrade continues. “As they retire from the Air Force, the Army, the Navy, we bring them into a specialized program focused on their skills and how they can help us from technology experience.”
Serving an overlooked population: veteran spouses struggling with joblessness
Even when they’re not deployed, U.S. military personnel are battling wars at home—depression, financial insecurity, and homelessness. But one group is often ignored in the fight: their spouses. The husbands and wives of military personnel face sky-high unemployment rates and long-term instability due to the nature of their partners’ jobs. But Andrade recognizes them as an overlooked and underutilized pool of professionals.
“Military spouses are an incredible source of talent—they’re literally the CFO and the CEO of their home,” USAA’s CEO says. “When their spouses are deployed, when there’s a permanent change of station for their spouse, they have to leave their job. And if they don’t have that flexibility, then you know that’s why the unemployment rate is so high.”
USAA is funneling its resources to get to the root of the issue; as part of the Honor Through Action initiative, the company tells Fortune it will host Military Spouse Advisory Councils in San Antonio this March. The mission is to help shape policy, programs, and resources to better serve the unique needs of military families. That same month, the business also plans to work with other organizations in funding Blue Star Families’ release of Military Spouse Employment Research with the aim of pinpointing actionable solutions to their raging unemployment. And reflecting internally, Andrade reports that USAA will continue to lead by example.
“We can offer a lot of flexibility… Having that level of empathy and understanding becomes very critical,” he says. “This is where we hope—with Honor Through Action—to be able to help companies understand the value that [military spouses] have, but also why you need to treat them a little bit differently given their personal situation.”
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