Houlihan Lokey’s global co-heads of corporate finance, Jay Novak and Larry DeAngelo, discuss the sector-focused strategy that earned their firm the award for Best Investment Bank for M&A in North America.
Global Finance: Houlihan Lokey closed 458 deals in 2025, surpassing Goldman Sachs, Rothschild, and JPMorgan Chase in deal volume. To what do you attribute this success?
Jay Novak: Our success stems from the strategy that we embarked on a number of years ago, which is to go very deep in sector expertise, and then couple that with strong geographic coverage. This allows us to deliver real, global know-ledge to clients across different industries.
Larry DeAngelo: We’re also the top advisor to private equity firms, with 286 of those deals coming from buy-side or sell-side work. Our industry expertise and global presence—55% US, 45% Europe/Asia—enable us to connect clients with the best investors worldwide.
GF: How do Houlihan Lokey’s bankers keep up with sector-specific trends in M&A?
Novak: Our bankers specialize in narrow segments, so while some sectors are a little bit hotter one year versus another, their broad expertise ensures they remain relevant and able to find opportunities, even in down years. Our wide sector coverage helps us capture growth and stay ahead of trends.
DeAngelo: We focus on hiring top talent in each sector, ensuring that even if a sector dips, the best deals go to the most skilled bankers. We made a conscious effort to hire among the best bankers in each sector, because while an overall sector may be down, the quality transactions in that sector are still going to go to the best bankers in those spaces. This focus on sector expertise continues to drive our success.
GF: Morgan Stanley and Citi have scaled back this year. Does Houlihan Lokey anticipate cuts, or will it buck the trend and deepen its bench?
Novak: I’m optimistic we will always be hiring good talent.
DeAngelo: We’ve never done a systematic reduction in workforce. Ever. I believe we have 15 searches out now globally for senior bankers and in specific subjects.
GF: Regarding the private credit market, are you concerned about the 13% of lower- and middle-market loans valued below 90%?
DeAngelo: Private credit has been integral to funding private equity deals for years. It’s expanded into larger markets, competing with banks. While retail interest may be waning, institutional capital continues to flow, and private credit remains a vital part of the capital markets.
GF: Is Blue Owl Capital’s being down over 40% year-to-date a concern?
DeAngelo: If you’re a Blue Owl shareholder, there’s concern about capital raising. However, from a broader industry perspective, we continue to see private credit as an important part of the capital markets ecosystem.
GF: What worries you in 2026?
Novak: My concern is that if the Iran situation drags on, it could hurt company performance and make the market more challenging. If it resolves quickly, we could have a strong year.
DeAngelo: Similar to last year’s Liberation Day, when once clearer guidelines emerged, the market recovered. If we find the off-ramp here, we could see similar deal activity [to 2025]. But, as Jay mentioned, if it goes on longer, secondary and tertiary effects could be a problem. If it resolves itself soon, we could have a resumption of deal activity, because the underlying fundamentals, excluding Iran, are pretty good.
