Finance interviews test more than just technical knowledge. Candidates also need to understand what is driving transactions, how deals are financed and why market conditions matter.
The following seven trends provide a practical overview of the deal environment in 2026 and help you explain the “why” behind recent transactions in interviews.
M&A activity is picking up again but the recovery is not equally broad across the market. PwC expects the global M&A value to reach around $4 trillion this year while overall deal volumes remain lower. Megadeals valued at more than $5 billion account for around half of the global deal value.
This distinction is important to keep in mind because stronger aggregate deal value does not necessarily mean that companies across all sectors and deal sizes are equally active. Buyers remain selective with strategic rationale, financing conditions and valuation playing an important role in whether deals move forward.
Why it matters for candidates: You should be ready to explain why rising deal value can coexist with decreasing deal volume and why megadeals are shaping the M&A market.
Private equity remains one of the most important drivers of global M&A, with Goldman Sachs estimating that it represents around 40% of the M&A market. Sponsors continue to deploy significant capital, but focus on larger and more complex take-private transactions.
The key distinction from the broader M&A trend is that this is about who is buying and why they are buying. Investors evaluate potential transactions based on leverage, valuation, operational upside and ultimately whether the investment can generate an attractive return.
Why it matters for candidates: You should understand why a financial sponsor might pursue a company, how the investment could create value and how financing conditions affect whether a PE transaction makes sense.
Private equity is not only about deploying capital. Funds ultimately need to exit investment and return capital to LPs. A large backlog of PE-owned companies remains in portfolios after several years of difficult exit conditions. While IPO markets are reopening selectively, sponsors are also using secondaries, sponsor-to-sponsor transactions and continuation vehicles to generate liquidity.
This puts pressure on funds to monetize existing portfolio companies without accepting unattractive valuations and can constrain capital recycling and future fundraising.
Why it matters for candidates: In PE interviews, do not focus only on how a company could be acquired. You should also be prepared to discuss potential exit routes, how exit conditions affect returns and why distributions to LPs matter for future fundraising and investment activity.
Private credit continues to serve as an important alternative to traditional bank lending and public debt markets. Goldman Sachs expects private credit to continue gaining importance and estimates that the market could more than double by 2030.
For sponsors and companies, private lenders can provide flexible structures, negotiated terms and greater execution certainty. This makes private credit increasingly relevant for leveraged buyouts and other transactions. The focus here is on how deals are financed, rather than who buys the company. Private credit can compete with or complement syndicated loans, bonds and other financing sources.
Why it matters for candidates: You need to know why a sponsor might choose private credit instead of syndicated bank financing and how factors such as leverage, pricing, covenants, flexibility and execution certainty influence the decision.
Improving capital markets do not mean that financial distress has disappeared. Companies still face high leverage, refinancing needs, margin pressure and liquidity constraints, especially after years of higher borrowing costs. Deloitte expects restructuring activity in 2026 to increase modestly or remain around last year’s levels.
Restructuring, debt advisory and liability management become increasingly relevant when companies can no longer refinance sustainably through normal channels. Private credit is also playing a growing role in distressed situations through rescue financing, bridge loans and refinancing solutions.
Here the focus is on the financial position of the borrower. Normal private credit financing focuses primarily on providing capital, while restructuring becomes increasingly important when a company is struggling to support its capital structure.
Why it matters for candidates: You should be able to connect operating performance and cash generation to the balance sheet. Higher interest expense, weak cash flow and approaching maturities can turn a financing issue into a restructuring problem.
Capital markets activity has become more constructive, creating more opportunities across both ECM and DCM. ECM helps companies raise equity through IPOs, follow-ons, ABBs and other equity transactions. In EMEA, ECM activity strengthened significantly during the first half of 2026.
DCM helps companies and governments to raise debt through bonds and other debt instruments. KPMG states that US DCM issuance increased by around 65% in the first quarter of 2026 compared with the final quarter of 2025.
Together, more active equity and debt markets broaden the financing and exit options available to companies and financial sponsors.
Why it matters for candidates: Understand how market conditions influence whether a company chooses to issue debt, raise equity, pursue an IPO or postpone a transaction.
AI, digitalization and automation are increasingly influencing acquisition strategies and portfolio decisions. Companies are targeting businesses that provide access to technology, infrastructure and productivity-enhancing capabilities. At the same time, they are divesting non-core assets and reallocating capital toward areas with stronger strategic growth potential.
This makes M&A more selective, with buyers focusing not only on size and valuation but also on whether a target supports long-term strategic priorities.
Why it matters for candidates: You understand how structural themes such as AI can influence which companies are acquired, which assets are sold and the strategic rationale behind a transaction.
If you’re preparing for an interview in finance, technical preparation is still essential, but you should also understand what is currently driving transactions. Market awareness allows you to discuss a recent deal beyond simply naming the companies involved. You should be able to explain:
The seven trends above provide a useful framework for building an understanding of the market.
As a finance candidate, understanding these trends goes beyond memorizing numbers and market statistics. You should be able to see and explain how they shape real transactions. The more you build your knowledge of the deal environment, the easier it will be to discuss the context behind transactions, explain the underlying decisions and ultimately give more thoughtful answers in interviews.
Keeping up with how markets, financing conditions and strategic priorities evolve can therefore give you a clear advantage when preparing for an upcoming finance interview.
To ensure this article is accurate and useful, we reviewed trusted industry sources, official company information and relevant PrepLounge expertise.
