The recent UK election has left many wondering about its potential impact on the mid-market private equity landscape. In this short video, Rob Baxter, UK Head of Corporate Finance, sits down with experts Yael Selfin (Chief Economist), Tim Sarson (Head of Tax Policy), and Alex Hartley (Head of Private Equity London Regions) to discuss the possible implications.
What does the Election mean for UK mid-market private equity?
Rob Baxter, UK Head of Corporate Finance sits down with Yael Selfin, Chief Economist, Tim Sarson, Head of Tax Policy and Alex Hartley, Head of Private Equity London Regions, to discuss what the Election means for UK mid-market private equity?
Mid-market activity:
Mid-market private equity investment activity in the UK declined by 11% in the first half of 2024, as challenging macroeconomic conditions persisted, according to KPMG UK’s latest Mid-Market Private Equity analysis.
The firm’s most recent M&A study revealed that 321 mid-market transactions were completed during the first six months of the year, representing a drop of 11% when compared to the 360 transactions completed during the same period in 2023. However, when compared with pre-pandemic M&A activity (H1 2019), 2024’s figure reflects an increase in activity of 25%, suggesting the market has begun to normalise.
It was a similar picture for the UK private equity market overall, with 656 deals completed during H1 2024, reflecting a 20% decline when compared to 822 transactions in H1 2023.
UK companies continued to remain attractive to international buyers, with inbound deals accounting for 42% of all M&A activity during the first half of 2024 – and almost half of those buyers were US-based.
Economic Outlook:
Yael Selfin begins by analysing the current economic climate. She highlights the positive signs of growth, fuelled by a combination of rising consumer confidence and falling inflation. This trend is expected to continue through the remainder of 2024 and into 2025, offering a promising backdrop for mid-market private equity investments.
Tax Policy Implications:
Tim Sarson delves into the potential changes in tax policy under the new government. He examines how these changes might specifically affect mid-market private equity firms and their investment strategies. Understanding the evolving tax landscape will be crucial for navigating future deals and maximising returns.
M&A Environment:
Alex Hartley provides insights into the current and future state of the M&A market. He analyses the factors influencing deal activity and offers his perspective on how the election outcome might impact the M&A landscape for the rest of the year. This analysis will be valuable for private equity firms seeking to identify and capitalize on attractive investment opportunities.
By understanding the economic outlook, tax policy changes, and M&A environment, private equity firms can make informed decisions and position themselves for success in the evolving market.
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