THE mergers and acquisitions boom is set to continue, spurred by public-to-private deals as companies quit the public markets amid increased regulation, according to Scott Kapnick, co-head of Goldman Sachs’s investment banking division.

Mr Kapnick said that, given strong global economic growth, the current bull run in mergers and acquisitions (M&A) showed no signs of running out of steam. Consolidation in the energy sector, and opportunities in Russia, Turkey and European Union accession states, made the European M&A markets just as exciting as opportunities in China and India.

In Western Europe, industries facing low growth would continue to consolidate, with financial services and telecoms particular areas of opportunity, he said.

Britain is also expected to be an area of continuing interest for Goldman amid a spate of M&A deals. This is despite its involvement in a number of controversial takeover approaches, which triggered concerns from Hank Paulson, its chairman and chief executive.

“I am a big believer in the transatlantic relationship between the US and Europe,” Mr Kapnick said. “I think when you look at the new Europe, including Ukraine and Eastern European accession states, it represents a huge opportunity and I think I have one of the best jobs in the world. I think it creates as large an opportunity as India and China.”

With oil prices close to record highs, Mr Kapnick said that the opportunities for wealth transfer for companies in the Middle East and Russia were huge. “There is a wealth of opportunities to consolidate and to create stronger companies that can then access the capital markets,” he said.

Mr Kapnick said that the biggest threat to the bull run in M&A was increasing protectionism by nation states: “The biggest risk for the markets in general is if protectionist tendencies take hold more often.”

He also cautioned that the financing markets were nearing the top of the economic cycle. He said that assets such as real estate, which have been driven higher by the ready availability of finance, were now showing evidence of looking pricey.

“If you were to see a radical change in the financing markets — and Goldman is not projecting a significant worsening — you might see price falls in some of those sectors,” he said.

Mr Kapnick said he believed that, as real estate prices had risen, investors had begun to turn to infrastructure investments. “They are longer-duration, lower-return assets, which may be a hedge on inflation,” he said.

KAPNICK’S CAREER

SCOTT B. KAPNICK, regarded as one of the star moneymakers at Goldman Sachs, joined Michael Sherwood last year to share the top job at Goldman in Europe. The Sunday Times Rich List estimates that he has a personal fortune of about £140 million, based on the assumption that he received about £50 million of shares when Goldman floated in 1999.

Mr Kapnick joined the company in 1985 with a job in the corporate finance division. He is co-chief executive officer of Goldman Sachs International and co-head of the firm’s global investment banking division. He became a partner in 1994 and managing director in 1996. He has headed the investment banking division in Europe. Between 1991 and 1993 he was based in Frankfurt. He ran the Frankfurt office between 1997 and 1998.