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Wall Street's deal machine is shutting down

Jan 30, 2016, 03:44 IST

A hand-made replica of a Lamborghini Reventon in ChinaREUTERS/Xihao

It's been a rough start to the year for Wall Street dealmakers.

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There hasn't been any of the blockbuster M&A activity that we saw last year.

Global M&A activity for 2016 to date totals $183 billion, according to Dealogic, down from $267 billion over the same period in 2015.

No company has gone public in the US in 2016, the first time there has been an IPO-free month since September 2011.

Dealmakers are chalking it up to all of the recent market volatility.

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On Friday, Josh Harris, the cofounder of private equity giant Apollo Global Management, said the leveraged buyout market is suffering.

"The financing markets are shutting down," he said at a private equity conference, according to Bloomberg's Devin Banerjee.

"We had a huge pipeline going into the holiday period. We were on the verge of signing these deals. The market shut down. Our entire private equity pipeline dried up," he said, according to the report.

January was one of the worst months in years for stocks.

New York Stock Exchange president Thomas Farley highlighted similar concerns about the IPO market at the World Economic Forum in Davos last week.

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"Volatility is up, the number of IPOs goes down," he said in an interview with CNBC. "That happens every single time."

But Farley said that the pipeline is still big, and there is reason to be hopeful.

"We had a couple dozen companies in the fourth quarter that were prepared to go public that just didn't - and they include great companies, big IPOs," he said, citing Univision, Albertsons, and SoulCycle.

"They haven't just gone away - they're waiting for the IPO window to come back," he said.

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