This Year’s M&A Market Hits All-Time High... Wall Street's Fee Income Sets New Record

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] As the global mergers and acquisitions (M&A) market expands to an all-time high this year, investment banks (IBs) on Wall Street in the United States have set a new record for fee income, the Wall Street Journal (WSJ) reported on the 7th (local time).

According to financial information provider Dealogic, the scale of M&A in the U.S. reached $1.8 trillion (approximately 2,093.2 trillion KRW) through August this year, while globally it amounted to $3.6 trillion (approximately 4,186.4 trillion KRW).

Both figures represent the largest scale since Dealogic began compiling data in 1995.

Wall Street IB officials explained that this year’s M&A boom is the result of multiple factors, including increased corporate cash holdings and the activation of special purpose acquisition companies (SPACs), with large-scale M&As ranging from $1 billion to $10 billion accounting for about half of the total.

By industry, the technology sector recorded the largest M&A volume, while aerospace, automotive, insurance, leisure, metals, and publishing also more than doubled compared to the average of the past five years.

Thanks to this, IBs that successfully close M&A deals and secure substantial cash have set a record for advisory fee income in the first half of this year, WSJ reported.

For example, Goldman Sachs’ fee income exceeded $1 billion in both the first and second quarters this year, a feat that had only occurred once in the decade before the COVID-19 pandemic.

The Journal noted that with many large M&A deals still underway, the strong trend in IBs’ advisory fee income is expected to continue into the second half of the year.

This content was produced with the assistance of AI translation services.