Private equity market soars as dealmakers shrug off uncertainty
Private equity dealmaking in the UK soared to record level last year as dealmakers shrugged off pandemic and Brexit uncertainty, new data has revealed today.
Deal value and volume among mid-size firms hit record levels with £46.8bn worth of deals being closed across 803 separate transactions, up 40 per cent and 36 per cent on 2020, respectively, according to data from big four firm KPMG.
The private equity market overall boomed with a total of 1,545 deals worth £159.2bn completed in 2021, up from 1,117 in 2020 and 1,246 in 2019.
Jonathan Boyers, Head of KPMG’s UK Corporate Finance practice, said: “The UK’s private equity market saw a dramatic return to form in 2021, as confidence returned and pent-up demand was released.
“In the final quarter of 2021, some clouds began to gather on the horizon, with inflation, supply chain stability, fiscal-monetary policy and COVID-19 variant concerns on the minds of many, however, deals continued to get done.”
Professional services dealmaking was the standout performer across sectors with activity up from 215 deals in 2020 to 312 in 2021, while values rose by over 50 per cent to £15.5bn.
KPMG predicted that 2022 was set to be a clearer year of trading as Brexit and pandemic headwinds ease.
“Investor appetite is strong and private equity funds remain eager to deploy their ample dry powder, so healthy levels of activity will continue,” said Boyers.
“It should also be easier to value companies without so much uncertainty in the market, which in turn will make it easier for private equity houses to move forward with conviction when looking for the best investment opportunities.”