Ocorian: Global Deal-Making Heading for Recovery After Tough Year as Rates are Cut

Deal-making and financing globally are set for recovery in the year ahead after a tough past 12 months as interest rates ease worldwide, new global research from Ocorian, a specialist global provider of services to financial institutions, asset managers, corporates and high net worth individuals, shows._x000D_
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Around three out of four (75%) senior executives questioned say they expect increased activity in the year ahead, with one in seven (14%) forecasting a significant rise here. Just 4% are forecasting a fall in activity with 21% expecting no changes to the level of deal-making and financing._x000D_
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The rise in activity highlighted by Ocorian’s study among senior executives at major companies, asset managers working in alternative investments, family offices, wealth managers, capital markets companies and professional services providers follows a tough 12 months._x000D_
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Its research across the European Union, UK, US, Canada, South Africa, Asia and the Middle East found just one in eight (12%) reported no significant impact on deal-making and financing over the past 12 months._x000D_
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The research across 19 countries found a third (33%) had delayed or cancelled deals in the past 12 months while 17% said the interest rate environment had reduced the volume of deals their firm agreed. Around two-thirds (67%) said the interest rate environment had increased financing costs._x000D_
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Nearly three out of four (74%) said they had used hedging strategies in the past 12 months to reduce the interest rate impact on leveraged buyouts while 55% had used fixed-rate debt products and nearly half (47%) had turned to debt maturity management._x000D_
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“The easing of interest rates that we have seen in recent months is welcomed by the industry, whilst debt challenges remain for many asset managers and following the UK Government’s Autumn Statement, inflationary pressures are also lingering around the corner; this will certainly have an impact on future rates reductions and the anticipated timings of those,” Richard Hansford, head of business development, UK and EMEA – fund services at Ocorian, said. “The noise from the market is clear… we need to see more rate cuts to actively transact. Despite this sentiment, with the rate reductions we have seen so far clients have been picking up their deal flow activity and are bidding on assets that we were not seeing this time last year. One thing is certain going into 2025, challenges will remain throughout the year and with the election season of 2024 over; the political pantomime is set to go into overdrive when the U.S. President Elect takes to office on the 20th of January. Clients are certainly building their pipeline for new deals and whilst opportunities remain, many will be watching the impact of geo-political tensions and their impact on deal making.”