UK private equity firms see increased transaction activity in 2025

Private equity firms anticipate increased transaction activity in 2025, with 84% of survey respondents expecting to complete at least 5-10 deals, according to a Deutsche Numis survey released Tuesday.

UK private equity firms see increased transaction activity in 2025

This marks a significant shift from last year when only 12% of firms indicated a high likelihood of executing bolt-on acquisitions within their portfolios. Deutsche Numis surveyed 200 senior private equity professionals, revealing an expected surge in interest for public-to-private transactions in the UK. 26% of respondents view public assets as a key target for their pipelines, up from 14% in 2023. The report also highlights expectations for larger transactions, following a period of primarily "maintenance" bolt-on deals. The optimistic outlook comes after a recovery in deal-making this year, with declining or stable interest rates easing the financing of buyouts. UK M&A activity has risen by 28.3% year-to-date, led by the financial, industrial, and consumer sectors, according to LSEG data.

Expert's comment

“Private equity investors expect more intense M&A activity next year, driven by continued improvements in the financial markets,” said Alec Pratt, co-head of M&A sponsor financing EMEA at Deutsche Bank. Despite the positive sentiment, the report also notes that a challenging debt financing environment remains the primary obstacle for private equity firms. Two-thirds of survey respondents deem the UK debt market difficult or "significantly difficult," a slight improvement from 73% in 2023. Potential regulatory changes have emerged as the second most significant challenge, with participants concerned about increased intervention from the Competition and Markets Authority.