Middle market dealmakers are heading into the back half of 2026 with cautious optimism, more convinced that activity will pick up, but still navigating the friction that has slowed transaction flow for months.
A TD survey of financial decision-makers at ACG DealMAX found that 67% believe conditions are improving, and 64% expect deal activity to rise over the next 12 months. The confidence is real, but so are the obstacles: valuation misalignment, macroeconomic uncertainty and capital structuring difficulties continue to shape when transactions actually get across the finish line.
"Middle Market dealmakers are telling us the appetite is there, but the bar for getting deals done is higher," said Kory Wilcox, Head of Middle Market Financial Sponsor Coverage and Buy-Side Loan Syndication at TD. "Capital is available, but buyers and sellers still need to get aligned on value, structure and execution. In practical terms, the deals moving forward are the ones where both sides have confidence in the economics and a clear path to close."
The pricing disconnect between buyers and sellers stands out as the single biggest drag on deal flow, cited by 77% of respondents as the primary constraint on execution. Macroeconomic and geopolitical volatility came in second at 46%, followed by a limited supply of quality assets at 44%. Those same pressures point toward what would most unlock activity: 40% said greater valuation alignment would be the top catalyst, with 33% pointing to improved economic stability.
On the capital side, availability isn't the problem; a third of respondents said capital is accessible but difficult to structure efficiently, while 28% said the cost of capital is limiting deal viability outright. Only 26% described capital as both readily available and easy to put to work, a finding that underscores how disciplined underwriting and realistic assumptions have become prerequisites rather than differentiators.
Speed and certainty of execution have emerged as competitive advantages in that environment. Fifty-seven percent of respondents said the most valuable thing a financial institution can offer right now is confidence that a deal will close, and close quickly. Flexible, customized structures ranked second at 47%, followed closely by sector-specific expertise at 46% — reflecting demand for advisers who can do more than provide capital.
"This is a market where preparation matters," Wilcox added. "The firms that come to the table with clarity and the right partners will be better positioned to move as opportunities arise."
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