Middle-market investment banks are entering 2026 facing continued volatility, limited visibility, and accelerating disruption. In Fuld‘s recent webinar , Investment Banking leaders came together to examine the lessons of 2025 and discuss how firms can position themselves for resilience and growth in the year ahead.
Our discussion, led by Nilesh Sharma, SVP Research & Advisory Services at Fuld, featured Mandy Farris Woods, COO at Objective Investment Banking & Valuation, Rose Thompson, COO at ButcherJoseph & Co, and Shawn Flynn, MD at Silicon Valley Highpoint Capital.
They shared a candid view of an industry in transition, one where operational discipline, technology adoption, and strategic flexibility are no longer optional, but essential.
Deal activity:
Over the past 18 months, deal activity has been uneven and highly timing-dependent. While high-quality transactions continue to close, pipelines have fluctuated significantly by sector and geography. Firms with diversified advisory offerings have been better positioned to absorb these swings, while those reliant on traditional M&A have faced longer timelines and increased pressure on resources. Valuation gaps and cautious seller behavior have further complicated execution, reinforcing the need for tighter forecasting, standardized processes, and more deliberate capacity management.
Planning cycles:
Operational maturity has become a defining competitive advantage. Leading firms are moving away from annual planning cycles toward shorter, execution-focused horizons that allow for faster course correction. Investments in workflow standardization, performance metrics, and accountability frameworks are improving consistency even as deal volumes fluctuate. In an event-driven fee model, predictability of cash flow and effective talent deployment remain among the most persistent challenges, making disciplined operating models a critical differentiator, particularly in the lower middle market.
Artificial Intelligence:
Artificial intelligence is now a central component of this operational shift. AI-enabled tools are already accelerating research, drafting, presentation development, and internal collaboration, significantly compressing transaction timelines. Rather than replacing expertise, AI is being used to remove low-value manual work and free professionals to focus on judgment-driven activities such as client advisory, negotiation, and problem-solving. Firms that delay adoption risk falling behind competitors who are embedding AI across the deal lifecycle.
2026:
Looking ahead to 2026, expectations are cautiously optimistic. Valuations have normalized, sellers are better prepared, and private equity firms remain under pressure to deploy capital. Activity is expected to improve steadily, particularly in succession-driven transactions and add-on acquisitions. At the same time, the operational gap between disciplined firms and those relying on ad hoc processes is likely to widen. Education, content, and proactive engagement will also play a growing role as clients seek greater clarity around process, options, and value creation.
Ultimately, the firms best positioned for the future will be those that pair strong operating foundations with practical AI adoption—while continuing to invest in the human relationships and judgment that remain irreplaceable in complex transactions.
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