Blackstone is forecasting a favorable shift in the mergers and acquisitions landscape, along with a resurgence in the initial public offerings (IPO) market, which could enable the firm to sell and exit more than double the number of private equity investments by 2025, a senior executive stated.

“The IPO markets are open, and the cost of capital has decreased. By 2025, investments from 2021 will be four years old, so some of these successful deals will be ready for exit,” said Martin Brand, head of North America private equity at Blackstone (NYSE: BX), during a recent interview in New York.

Top buyout firms are preparing for a rebound in leveraged buyout activity in 2025, supported by lower interest rates, a need to invest billions in raised capital, and a surge of opportunities in the booming artificial intelligence sector.

The decline in interest rates is a positive sign for private equity firms, especially after a spike in financing costs over the past two years made leveraged buyouts more expensive and large deals challenging to finalize. Nonetheless, major buyout firms, including Blackstone, are beginning to pursue substantial leveraged buyouts as financing conditions improve.

In November, Blackstone finalized an $8 billion deal to acquire Jersey Mike’s Subs, marking one of the year’s largest buyouts.

According to Preqin, U.S. private equity and venture capital deal volumes have reached $423 billion this year, just shy of the $440 billion total for all of 2023.

Large buyout firms are optimistic that a robust U.S. economy will drive M&A activity in the near future. Brand noted that it is too early to evaluate the effects of tariffs and deregulation under the incoming administration of President-elect Donald Trump.

“We’re generally confident in the U.S. economy,” he stated. “It appears to be gaining momentum.”

As of the end of September, Blackstone, the world’s largest alternative asset manager, reported approximately $1.1 trillion in assets under management.