The reason dealmakers are taking over Wall Street again

Dealmaking is back, and that's good news for Wall Street in more ways than one.

Total M&A activity is running at record levels, with $4.7 trillion in activity in the year to date, according to Credit Suisse. There's been $2.4 trillion of deals in the US alone, up from $1.6 trillion in the same period in 2007, the previous peak.

For investment banks, the surge in deals can have a multiplier effect - with the revenues they generate extending far beyond straight-up advisory fees.

Once a bank is involved in a deal, it can earn fees from bond and equity sales to finance the takeover. Consider the drugmakers Teva and Allergan. Freeman & Co. estimates they've paid more than $800 million in fees between for advice on purchases, sales, and fundraising for deals since 2012.

This revenue stream can continue long after a deal is done, Barclays analysts note.

"There is the potential for additional advisory fees to the further rationalize acquired firms, as well as meeting possible divesture requirements," they wrote in a note Thursday.

And that is why Wall Street's dealmakers - who were laying low in the years after the financial crisis - are back in the ascendancy.