October 19, 2026

M&A is on pace for a near-record year, driven by the ongoing rapid technological change that is forcing firms to adapt to a new world. In the first nine months, 42 deals topped $10 billion, worth over $1.1 trillion, or 36% of all M&A value, see charts below. Big is getting bigger. AI is the trigger of the M&A boom, but it is lighting up far more than tech. Buyers are chasing data centers, power generation, grid infrastructure, cooling and connectivity. Utilities and energy posted a record first half, as AI infrastructure demand and energy security accelerated. Scale-seeking in industrials and health care adds fuel. Corporates lead, while private equity holds back because AI has made software harder to value. AI cuts both ways. It spurs investment in some areas but raises doubts about the durability of software business models. Sponsor tech deal value fell 67%, while non-tech PE rose 17%. Net, sponsor M&A is down 6%. The M&A boom in Europe looks different from America’s. US: Fewer, bigger deals. Large strategic transactions have returned while broader dealmaking stays subdued. The action is in AI, power and tech. Europe: A consolidation play. In the second quarter, financial services was the highest-value sector, ahead of industrials. Banks and telecoms are bulking up as policymakers back scale, and defense is attracting capital that once steered clear. The bottom line is that the speed of change in AI, energy, infrastructure, defense and financial services has triggered action among many corporates, and the need for long-term, flexible capital to finance this change is enormous. For more discussion, see also here. Written by Huw van Steenis and Torsten Slok

October 18, 2026

Germany is hosting its Invest in Germany Summit this week, against the backdrop of rising investment needs in AI, infrastructure, defense and energy resilience. Meeting these longer-term investment needs will require public and private capital across both credit and equity markets. And Germany starts with a relatively small pool of domestic institutional capital. Germany has the least-funded pension system of any major advanced economy. Funded pension assets are only around 7% of GDP against 149% in Sweden and 185% in Canada. Furthermore, German occupational pension schemes allocate just 14% to equities, compared with 34% across the EU and around 50% in the US, see chart below. Yet Germany has the highest household savings rate in Europe, with much of household wealth held in deposits. This is why pension reform matters beyond retirement policy. The reforms now under way could ultimately generate around €90 billion of new annual funded pension flows, equivalent to roughly 2% of GDP. The bottom line is that Germany is trying to increase investment at the same time as it builds a much larger domestic pool of long-term savings. Pension reform could help connect the two. We look at the numbers, the reforms and the implications for capital markets in our new presentation on German pension reform, available here. Written by Huw van Steenis

October 17, 2026

Duration measures how sensitive a bond’s price is to changes in interest rates, and for the 30-year Treasury, it has fallen from 25 years in 2020 to 14 today because of higher yields and higher coupons. That means long Treasuries offer less cushion per dollar in a downturn. As a result, investors may need to own more fixed income to hedge against the risk of a slowdown. Pairing Treasuries with high-quality credit can help. Investment-grade private placements and infrastructure debt are often long-dated and fixed-rate, so they can carry meaningful duration, while asset-backed finance can add income, with duration varying by structure. The bottom line is that when interest rates stay higher for longer, lower duration weakens the hedge that long Treasuries provide.