In recent earnings briefings and industry summits held by Goldman Sachs Group, CEO David Solomon offered insightful perspectives on the future of global capital markets. He clearly indicated that after a period of downturn, global capital markets are now experiencing a recovery, with transaction activity expected to achieve breakthrough growth from 2024 to 2026. Key drivers include the release of a backlog of private equity deals, improvements in the macroeconomic and policy environment, and the impetus from capital market liberalization and technology cycles. Solomon noted that as regulatory focus shifts toward promoting growth, coupled with technology-driven consolidation in areas like artificial intelligence, Goldman Sachs anticipates 2026 will mark a turning point in the global attitude toward mergers and acquisitions.
As CEO of Goldman Sachs, Solomon has steered the Wall Street giant through multiple industry challenges, including prolonged weakness in private equity spending and extreme market volatility. With 2025 performance showing significant growth, Solomon told investors at a UBS financial services conference on Tuesday that Goldman Sachs is entering 2026 with strong momentum. Solomon praised U.S. policymakers for stimulating acquisition appetite. "After a period of very strict regulation in the United States, we are now seeing a broad trend of deregulation across all industries," Solomon stated.
Just months ago, Solomon was publicly criticized by Trump after Goldman Sachs economists questioned tariff policies. Now, however, Solomon is expressing strong support for the Trump administration's pro-merger policies. Despite that past friction, Solomon is actively endorsing the government's growth-oriented agenda, stating that previous disagreements have been replaced by a new, "constructive" reality for the banking sector.
Solomon highlighted three key factors discussed on Tuesday that contribute to his optimistic outlook for deal-making in 2026.
From "No" to "Maybe" Solomon believes that, following a strong performance last quarter, 2026 will represent a turning point in the global M&A mindset. He stated that over the past five years, strategic buyers encountered a "different regulatory environment," adding that "whatever the question was, the answer was no." "Now, whatever the question is, the answer is maybe," he said during a discussion moderated by UBS's Erika Najarian. He suggested this shift could also rejuvenate the IPO market, which is expected to recover this year. Regarding M&A and the corporate deals vital to Goldman Sachs, Solomon remarked, "This year could rank in the top 10 percent in terms of performance."
A primary driver he identified is the abundance of capital-rich, asset-heavy private equity sponsors.
Private Equity Strategy A key business channel for Goldman Sachs involves providing banking services to top global private equity sponsors. These sponsors have often held assets longer than their investors desired while waiting for subdued valuations and high interest rates to subside. This has left limited partners eager for capital returns to reinvest in future deals, leading to a booming secondary market and continuation fund market. Banks, meanwhile, are hopeful that 2026 will be the year their private equity clients finally signal readiness to act. Solomon indicated that the pressure on sponsors to return capital to investors has reached a critical point. "We are reaching a point where this logjam begins to break," Solomon said. He pointed to increasing pressure from the limited partner community and the fact that most such firms are at a point in their fundraising cycles where they can no longer remain mired in valuation debates and must move forward.
Downstream Effects of AI Investment Solomon has been focused on preparing Goldman Sachs for the age of artificial intelligence, noting significant investments in this area. "The capital required to continue advancing this technology cycle will impact the overall financing cycle, so I see all of this accelerating, and I feel reasonably good about it," he stated. He mentioned instances of large technology companies turning to debt markets to raise liquidity for AI-related projects.
Solomon acknowledged that Trump's governing style remains an unknown variable for markets, and the future will not always be smooth. "He also tends to pivot from one policy action to another in terms of policy," Solomon said. "I still believe there is uncertainty on the trade front. There is uncertainty on the inflation front, and there is geopolitical uncertainty." However, he concluded, "I think what could happen in 2026 is that capital markets could be a fairly positive year, and M&A could be fairly positive—particularly strategic M&A among larger companies—and that outcome should be quite favorable for everyone here."