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Privately-owned professional services firms see significant spike in fundraising and acquisition activity

Privae UK fundraising within the professional services sector recorded a significant increase in 2021, up 78 per cent on 2020 and 70 per cent higher than in 2019, according to new research.

Analysis by Arden Partners (Arden), a small and mid-cap investment bank, also reveals that the value of acquisitions amongst private businesses in the sector more than tripled in 2021, with 403 acquisitions worth a combined GBP3 billion. This collective value is 22 per cent higher than pre-pandemic figures in 2019.

The growth in acquisition activity was driven by a strong final quarter, where acquisitions reached more than GBP1 billion for the first time since before the pandemic, totalling GBP1.36 billion in Q4 2021. The previous GBP1 billion-plus quarter was in Q4 2019 when deals collectively worth GBP1.2 billion took place.

Acquisition activity by volume of deals was also well ahead of previous years, with 403 recorded across the year at an average size of GBP7.4 million. This volume is 54 per cent higher than 2020 (261 deals) and 36 per cent higher than 2019 (296).

Last year saw GBP16.1 billion worth of external capital flowing into private professional services businesses through fundraisings compared to just GBP9.1 billion in 2020 and GBP9.5 billion in 2019. The average size of an individual fundraises increased significantly last year, at an average of GBP4.9 million, compared to just under GBP3 million in 2020 and 2019.

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