The booming areas 4 HSF Kramer partners warn lawyers can’t ignore

This year has been no exception.

To help lawyers navigate this period of uncertainty and constant change, four partners from global law firm Herbert Smith Freehills Kramer have identified the key booming areas lawyers cannot afford to ignore in the year ahead, with these forces set to reshape the industry and redefine dealmaking.

Private equity poised for a ‘blockbuster’ period

Kam Jamshidi, head of private equity at Herbert Smith Freehills Kramer, identified that “two powerful forces” are converging to create what could be a defining period for private equity dealmaking in Australia.

One of the areas Jamshidi highlighted is the surge in capital flowing into private equity, with Australia emerging as a key destination for global investors – a trend he explained is fuelling a wave of international managers setting up locally, alongside the continued expansion of domestic funds.

“On the one hand, there has been a dramatic rise in funds allocated to private equity, and Australia has been targeted as a desirable location internationally to invest by private equity firms,” Jamshidi said.

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“Anecdotally, we see this manifest itself in the build-up of global private equity managers establishing a beachhead in Australia, as well as the rise in new domestic managers. This is driving significant buy-side demand for assets.”

At the same time, Jamshidi noted that private equity managers are facing mounting pressure to realise returns and shorten holding periods, prompting a clear shift into “exit mode” as firms move to unlock value from long-held investments.

“On the other hand, consistent with the global build-up of the exit pipeline, private equity managers are under pressure to distribute returns earlier fund vintages through investment exits,” Jamshidi said.

“The increase in investment duration is in part due to managers seeing greater value in their assets than the market is willing to pay. Other factors include potential corporate buyers being conservative on large M&A in this uncertain climate and the challenging IPO window in recent times (which is opening up).

“Whatever the driver, a large number of managers have switched firmly into ‘exit mode’ to reduce the number and duration of investments they hold back to average levels.”

At the intersection of these two forces, Jamshidi pointed out how it has resulted in a “dramatic increase in sponsor-to-sponsor sales”, describing the current environment as setting the stage for a “golden years” of private equity dealmaking.

For lawyers navigating this shifting landscape, Jamshidi emphasised that success will depend on deep sector knowledge and a clear understanding of value drivers, enabling them not only to advise but also to anticipate risks and guide clients on what matters most.

“For lawyers, the key will be understanding the assets and sectors coming to market to best assist their clients,” Jamshidi said.

“Whether it is healthcare, financial services or business services, those lawyers who understand the value and risk drivers in the asset being sold and can focus their clients on what matters stand to be best placed to deliver success.

“You need to go deep and demonstrate that you understand the regulations, the changing market forces, the contracting pattern and common risk areas in the businesses in the market.”

The intersection of public and private markets

While private equity continues to expand amid growing complexity, the broader capital markets landscape is also undergoing significant change, particularly at the intersection of public and private ownership.

Nicole Pedler, partner in the corporate group for HSF Kramer, noted that the intersection of public and private markets – whether through IPOs or take-privates – marks defining moments for companies, shaping not only their strategic direction but also the experiences of their people and stakeholders.

“The intersection of public and private markets, from both ends of the life cycle, whether IPOs to list or take-privates, always captures a lot of attention as defining transitions for companies, their people and stakeholders,” Pedler said.

Pedler highlighted that these transitions are unfolding against a backdrop of powerful global forces, including “geopolitical developments, AI, the energy transition and our growing and aging population”.

These “mega trends”, as she described them, are fuelling a surge in transactions, with Pedler noting that the industry is “seeing more activity than ever”.

On the public markets side, Pedler observed that many large companies are reaching natural inflection points in their growth, prompting a wave of strategic opportunities, from new ASX listings to take-private transactions backed by clearly defined value creation strategies.

“In particular, we are seeing sizeable companies reaching their natural point for new investment and harnessing those trends to make for exciting new entrants to the ASX, and on the M&A side, we are seeing industry players executing on take-private control proposals with well-articulated strategies,” Pedler said.

For lawyers, she explained that the key lies in adopting a strategic mindset and maintaining a strong understanding of the broader forces shaping each transaction, noting that this enables them to better anticipate issues, bridge divergent interests, and identify solutions where none may be immediately apparent.

“The strategic approach that is needed to do deals well is to be acutely curious about the drivers for the deal, the mega influences and the accountability matrix for both investor/issuer or buyer/seller,” Pedler said.

“With that, you’re in a position to better anticipate what good looks like for the relevant transaction, be it identifying what’s coming next, solving an issue without an obvious answer or finding a bridge between otherwise divergent interests.”

Pedler added that adaptability is equally critical, particularly as artificial intelligence reshapes the market, with the greatest breakthroughs emerging from closer collaboration with clients and the use of new tools to solve recurring deal challenges.

“The other element that is needed is to be flexible and adaptable. An obvious area of relevance here is AI,” Pedler said.

“In terms of the operational and capability changes required to respond to upcoming opportunities in this space, it is an exciting time where we have more tools available than ever and are collaborating with clients to use them to meet their objectives.

“We are finding the best developments are coming from working with our clients to solve their recurring pain points across deals.”

Capital markets activity set to remain resilient

While rapid technological innovation is reshaping how deals are executed, and macroeconomic uncertainty continues to weigh on sentiment, capital markets and M&A activity are nonetheless expected to remain resilient in 2026.

Philip Hart, a partner in the corporate group at HSF Kramer, observed that although higher inflation and recent interest rate rises have placed pressure on markets, creating a more cautious investment environment, well-positioned businesses are still likely to remain attractive to investors.

“Whilst higher inflation and recent interest rate rises are a cause for concern for markets, well-positioned businesses will continue to be attractive to investors,” Hart said.

“Macroeconomic conditions may also create opportunities for growth for these businesses. Accordingly, despite the challenging conditions, we are expecting to continue to see capital markets and M&A activity in 2026 (as shown by the recent Koala IPO).”

Despite volatile markets and challenging macroeconomic conditions, Hart emphasised that investors are not retreating, but instead becoming more discerning, sharpening their focus and taking a more selective approach to opportunities.

“Volatile markets and less-than-ideal macroeconomic conditions do not mean that investors are not looking for opportunities to deploy capital. They will continue to look for opportunities to invest in well-run businesses with a clear growth strategy,” Hart said.

In this environment, Hart explained, successful capital-raising transactions increasingly depend on lawyers playing a central, strategic role in shaping the narrative, with a strong focus on the key risks that affect both value and reputation.

“Accordingly, from a strategic perspective, the key to executing capital raising transactions well in these markets is to ensure that the equity story and strategy are clear and that any potential issues are flagged and mitigated,” Hart said.

“Lawyers play a key role in this process and need to be keenly focused on the key issues that impact risk and reputation.”

At the same time, Hart highlighted how market volatility has introduced a new level of deal execution, noting that it can compress deal windows and require clients “to be in a position whereby they can launch transactions quickly”.

Hart added that law firms with deep, experienced teams and strong relationships with regulators and advisers are increasingly able to differentiate themselves by guiding clients through complex transactions.

“In this environment, we see it as a clear differentiator in our offering that we have deep teams with extensive experience in guiding clients through transactions in uncertain markets,” Hart said.

“Our teams anticipate and resolve issues quickly and efficiently, work effectively with the adviser group and have strong relationships with the key regulators.”

Convergence driving new opportunities

Beyond traditional capital markets and private equity, Mia Harrison-Kelf, an M&A partner at HSF Kramer, identified that a key driver of activity for the legal profession to watch is the growing convergence across sectors – particularly as technology continues to play an increasingly central role.

Harrison-Kelf highlighted that the idea that “everything is a tech company” has only intensified with the rise of AI, driving deeper convergence across telecommunications, media and technology as businesses pursue scale, efficiency and, ultimately, greater deal activity.

“We have been saying for years that ‘everything is a tech company now’ and that feels ever increasingly relevant (maybe everything is an AI company now?),” Harrison-Kelf said.

“As part of that trend, we’ve seen over a number of years an increasing convergence across sectors (particularly in telecommunications, media and technology) to maximise on scale and operational synergies.

“I expect we’ll continue to see increasing convergence, with that driving a number of transactions.”

Harrison-Kelf noted that, with a sustained focus on technology and the energy transition, the firm is seeing particularly exciting opportunities emerge in the energy tech space both in Australia and globally.

“I, and the firm more broadly, have been focused on tech and the energy transition as two of our priority areas for some time, and I think there are some very exciting opportunities in the energy tech space, both here in Australia and internationally,” Harrison-Kelf said.

In addition, she pointed to growing opportunities for collaboration across traditionally separate, highly regulated industries, noting that companies are increasingly leveraging their regulatory expertise to diversify and expand into new markets.

“We’ve also been looking more broadly at opportunities for collaboration across other highly regulated but traditionally separate sectors. Operating successfully in a regulated environment is a valuable skill set,” Harrison-Kelf said.

“As companies look for ways to diversify and expand operations, we expect they’ll look for ways to take advantage of those existing strengths and expand into new markets.”

For lawyers operating in this space, Harrison-Kelf emphasised that success hinges on flexibility, collaboration and the ability to apply insights across sectors.

“In terms of how I think we best support clients in this environment, being able to be nimble, applying knowledge and learnings from one sector across new areas and pulling together market-leading teams across different practice areas will continue to be key,” Harrison-Kelf said.

“My relationships and collaboration within the firm and with other advisors have always been important, but are increasingly so as we continue to innovate and apply existing expertise to new opportunities.”