Latham & Watkins Partner Predicts PE-Fueled M&A Surge to Accelerate in H2 2026

The Quick Take

• Latham & Watkins partner Alex Kelly forecasts H2 2026 M&A acceleration driven by private equity.
• Mega deals are expected to keep pace, continuing the 2026 M&A market resurgence through year-end.
• Private equity is identified as the primary engine behind the ongoing deal-making revival.

The M&A market has been building momentum through 2026, and Latham & Watkins — one of the preeminent dealmaking law firms — now forecasts the second half will see an acceleration rather than a plateau. Alex Kelly's prediction carries weight given Latham's positioning at the center of mega-deal transactions across sectors. The pattern of private equity leading rather than strategic acquirers reflects a market where credit availability and exit conditions have normalized after the 2022-2024 rate tightening cycle compressed deal valuations and PE exit windows.

The market implication of a PE-fueled M&A surge is broadly positive for investment banking fee revenue across Goldman Sachs, Morgan Stanley, JPMorgan, and Lazard — firms that rely on advisory fees from large transactions. Target company valuations in sectors popular with PE — technology, healthcare, and industrials — should see upward pressure as deal competition intensifies. Capital flows into leveraged buyout funds and special situation vehicles are likely to increase as limited partners reallocate to private markets ahead of an anticipated deal window in the back half of the year.

Watch the Federal Reserve's rate-cutting trajectory as the single macro determinant: sustained lower rates reduce borrowing costs for PE sponsors, directly enabling larger leveraged buyout transactions with improved return profiles. The earnings cadence of large investment banks in Q2 and Q3 2026 will reveal whether Latham's forecast translates into realized advisory fee revenue growth. Regulatory triggers — particularly antitrust review timelines in the US and EU — remain the key friction variable that could delay mega-deal closings even if financing conditions are favorable.

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