RBC's deputy chairman of investment banking explains why M&A has returned with a vengeance after going dormant last quarter

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A Q&A with Larry Grafstein, RBC's deputy chairman of investment banking, about the surprising turnaround in the 2019 mergers-and-acquisitions market.

RBC has already landed a lead role on one of the largest megadeals of the year: theIn a recent interview with Business Insider, Grafstein spoke more about the surprising turnaround in the investment-banking outlook for 2019, why that may spur action from unicorns and sellers, the biggest concern among executives and board members right now, how Republican tax reform may have stimulated more capital investment than people anticipated, and why the veteran dealmaker decided to make the jump to RBC.

The Fed keeping interest-rate increases modest and also saying it was not going to quantitatively tighten as much as maybe people expected created a baseline. But the psychology of seeing the markets turn, we think — talking to our clients — created a little bit of stimulation of people to say,"We don't necessarily want to miss a window to sell."

On the margin, people that might've wanted to hold out for every last penny are now willing to pull the trigger and sell. For anyone with historical perspective, CEOs, finance people who have some experience, we know this is an unusually long time of benign conditions, and it's been driven by the Fed, which is why there's so much attention to whatever the Fed's doing. As a result, everyone is very watchful about things.

Even though we've had some encouraging numbers for overall economic growth, there's still fragility in the global ecosystem.

 

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