2023 has seen the lowest volume in mergers & acquisitions deals since 2020, according to Bloomberg Law. A variety of factors make up this year's uncertainty, but could there be another reason for declining M&A activity?

Solomon Partners CEO Marc Cooper joins Yahoo Finance to discuss the current status of the M&A landscape and what the future of corporate mergers could look like heading into next year.

"I am cautiously optimistic that things will open up next year... I can see our own volume picking up, our own backlog picking up. Certainly, when it comes to the private equity community, they have to get back in the marketplace and return capital to their investors if they're going to continue to raise capital," Cooper states. "Then I think with interest rates hopefully capping out, there will be a lot more positive sentiment from the corporate and strategic buyers."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- The M&A landscape has been tough this year, hit by rising interest rates and ever-present fears of a looming recession. But there are signs of recovery now. We saw two mega mergers in the energy sector in October, remember, from Chevron and Exxon.

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And our next guest is seeing some bright spots in 2024. For more, we turn to Marc Cooper. He's CEO of Solomon Partners. Marc, thank you so much for joining us. So, you know, listen, as we highlighted there, M&A, there are some challenges-- rates, geopolitics. There are certainly some still worried about the economy. How is the M&A environment look to you right now, Marc? And what do you see as we move here into 2024?

MARC COOPER: Well, thanks for having me. It's maybe what I'm hoping for. And we're certainly hoping for a better market. Because as you pointed out in your opening, it hasn't been so great over the past couple of years. And this year, again, down, I guess, year to date 20% versus last year. And last year was down from the year before, although 2020 is not a good indicative year.

But if you go back to, say, the first clean year, 2019, we're probably down close enough to 40%. Yeah, there have been some big transactions. They've been a bit idiosyncratic, not necessarily in my view the harbinger of continued or growing activity but having to do with a lot what's going on-- what is going on within their industries.

Having said that, though, I am cautiously optimistic that things will open up next year. It sort of feels that way. I could see our own volume picking up, our own backlog picking up. Certainly, when it comes to the private equity community, they have to get back in the marketplace and return capital to their investors if they're going to continue to raise capital.