Moelis CEO-designate joins Wall Street in signaling dealmaking rebound after tariff pause
June 10 (Reuters) - Moelis' (MC.N), opens new tab incoming CEO Navid Mahmoodzadegan told investors on Tuesday that he is optimistic about the dealmaking environment, as confidence returns following a pause in April triggered by U.S. tariff threats.
"I'm optimistic. It definitely feels better and better each day ... The announcement in April, I think set us back a little bit in terms of the M&A environment," he said at the Morgan Stanley U.S. Financials Conference.
Investor sentiment soured and stock markets slid after U.S. President Donald Trump's "Liberation Day" tariff threats, stalling risk appetite and slowing deal activity.
Appetite for deals has since returned, with market participants and bankers once again seeing an opening for initial public offerings and signs of a pickup in M&A activity.
"Everywhere I go, people want to transact. They want to lean into transactions, whether it's companies or private equity firms or capital providers," Mahmoodzadegan said. "We're seeing our clients push us to launch transactions, even if the environment isn't crystal clear."
Earlier this week, Moelis said Ken Moelis would step down as CEO of the investment bank and hand the reins to Mahmoodzadegan, its co-founder and co-president.
The succession marks a major step for the bank, which has been led solely by Ken Moelis since its founding in 2007.
While succession at companies closely tied to founding CEOs can be challenging due to their outsized personal influence, Mahmoodzadegan said it was part of the "natural evolution of the firm."
"I think Ken felt that even though he's fully active and will continue to be fully active with clients going forward ... this was a great opportunity at a great time to give more responsibility, not just to me, but to the next generation of bankers," Mahmoodzadegan added.
The bank's deal pipeline currently is up from April and is as high as "it's ever been at the firm, or close to it," the CEO-designate said.
The comments echo Morgan Stanley (MS.N), opens new tab CEO Ted Pick's expectation of a strong end of the quarter for the bank as dealmaking and the calendar for equity capital markets are picking up.
Last week, top executives at the New York Stock Exchange (ICE.N), opens new tab and Nasdaq (NDAQ.O), opens new tab also said the IPO market is gaining momentum despite the Trump administration's rapidly shifting tariff policy, adding to the industry's optimism about a meaningful recovery.
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The Gulf of Mexico accounted for about 10% of Shell's 2024 free cash flow of $40 billion, it said in a presentation. That means that Section 899 could shave $800 million from its free cash flow per year from Gulf of Mexico operations alone. BP made about $1.5 billion in free cash flow in the United States last year, Reuters calculations show. A 20% dividend tax could translate into a $300 million loss in free cash flow. Faced with the worsening fiscal terms, companies could opt to direct funds away from the United States. Though options for deploying capital elsewhere on a similar scale are limited, companies could choose to spread their investments more widely. Such a scenario could be a boon for countries such as Canada, Brazil, Mozambique and Namibia, which have large untapped natural resources. Another option would be for companies to transfer their headquarters and listings to the United States - a costly and politically complicated option. Shell previously contemplated such a move to boost its share value, though it appears to have abandoned the idea. Ultimately, it is very likely that the Senate would push to modify Section 899 or limit its scope, given the potential far-reaching impact on many sectors. But barring a radical change, Section 899 poses a huge risk for European oil and gas giants that are heavily dependent on the United States. Achieving the Trump administration's energy dominance agenda will almost certainly require more foreign investment, not less, so if the CEOs of European energy companies complain loudly enough, the president may well listen to them. The opinions expressed here are those of the author, a columnist for Reuters Enjoying this column? Check out Reuters Open Interest (ROI), opens new tab, your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. 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