Private equity firms are forecasting a substantial rise in UK deal activity in 2025, with 84% expecting to execute between five and ten deals, according to a report by Reuters citing a survey by Deutsche Numis published on Tuesday.
This represents a significant shift from last year, when only 12% of private equity firms reported they were “highly likely” to pursue bolt-on acquisitions for existing portfolio companies.
Deutsche Numis surveyed 200 senior private equity executives, who expressed growing interest in public-to-private transactions, with 26% of respondents identifying public assets as their primary pipeline focus – a notable increase from just 14% in 2023. Firms are also signalling a readiness for larger-scale acquisitions, moving away from the smaller bolt-on deals that dominated in recent years.
This optimistic outlook follows a rebound in UK dealmaking, spurred by stabilising interest rates, which have eased financing conditions for buyouts. So far in 2024, M&A activity in the UK has risen by 28.3%, with strong interest in the financial, industrial, and consumer sectors, according to data from LSEG.
Despite these positive expectations, two-thirds of survey respondents described the UK debt market as “challenging” or “significantly challenging,” although this is an improvement from 2023, when 73% expressed similar concerns. Regulatory risks have also emerged as a major consideration, with firms wary of potential interventions from the UK’s Competition and Markets Authority, which they view as increasingly proactive.
