Goldman Sachs delivered mixed signals for 2026 dealmaking hopes as Middle East tensions dampened market sentiment. The bank reported investment banking fees rose almost 50% to $2.8bn in Q1 from a year ago, but warned its backlog of future fees decreased slightly from record levels three months ago.

Private equity firms face mounting pressure with $1tn in dry powder to deploy and roughly $4tn in ageing investments needing exits. The optimism that fueled dealmaking in recent years has evaporated as geopolitical uncertainty and the "SaaS-pocalypse" have soured private market exit prospects. Even before recent conflicts, markets were roiled by concerns over tech valuations and credit risks.

David Solomon acknowledged the "geopolitical landscape remains very complex" just hours before the US naval blockade of the Strait of Hormuz. While Solomon and others believe activity will rebound once conditions stabilize, fundraising and exit activity are trending down across the $22tn private capital industry. Rising fears of a recession could lead to defaults, further pressuring private capital stocks like Blue Owl, Blackstone, Apollo, and KKR.