As such, we expect the strong growth in activity that we have witnessed over recent months to continue once the transition to a new administration is finally complete.

New policy directions

In terms of likely policy outcomes, much will depend on the make-up of Congress. Control of the Senate will not be decided until January.

Traditionally the U.S. market prefers to see government divided between the administration and Congress (in this case, a Democratic administration and a Republican Senate) but will probably adapt easily whatever the outcome turns out to be, given that this looks set to be finely balanced in any event. However, we can expect a change of direction in key policy areas, including:

• greater antitrust enforcement, particularly for consumer-facing industries
• action forcing the big internet companies to change their business models, although falling far short of break up
• possible tougher regulation on the big banks
• extension of the Affordable Care Act (Obamacare) could increase pricing pressure on the healthcare sector

Some of these measures could put a damper on M&A activity, but largely the effect should be relatively mild. The drivers of M& A activity will remain largely unchanged. Drivers include:

• the search for ways to accelerate growth
• pressure to consolidate within sectors to improve efficiency and costs
• the need to deploy pent up reserves of liquidity
• continuing access to affordable debt finance for the right deal

Covid-19 is the biggest unknown

But the biggest threat to activity remains Covid-19. Any positives or negatives arising from the election will be overshadowed by whether the pandemic is brought under control and if the economy is forced to withstand lockdowns.