UK private equity is set for a period of rapid recovery following the pandemic, predictions suggest. In 2021, the sector reached levels not seen since before the 2007-08 financial crisis – with the UK maintaining a position as Europe’s largest private equity market. In total, 235 buyouts of UK-based companies took place with a cumulative value of £45.8bn. Private equity could stand to provide an important driver of growth – as the UK looks to recover from the impact of the pandemic on business investment.
Speaking to Express.co.uk, Bill Nixon, managing partner at Maven Capital Partners, said the UK is a “world leader” in private equity, noting how “confidence has swung back”.
Maven itself has invested around £90m in ambitious companies since 2016 and also serves as an adviser to the Northern Powerhouse Investment Fund.
The predictions come as a survey of finance executives by Deloitte found a record proportion planning to ramp up investment this year.
Mr Nixon said the findings tie in with what Maven has seen – as people look ahead to the end of the worst of Covid.
He said: “I share the cautiously positive outlook that the report espouses.
“2022 is looking like a year of very rapid recovery and investment.”
As well as recovery from the impact of the pandemic, private equity markets have become increasingly confident about the long-term impacts of Brexit.
Following the referendum, Mr Nixon said international fundraising saw some restriction as European funds “sat on their hands” over the uncertainty.
Since then, however, he said “that impediment has now gone”.
He added the last six to 12 months had also seen a re-emergence of US buyers and investors interested in UK technology assets.
Mr Nixon said: “There’s more capital available globally and there’s more buyer interest.
“So I think everybody has seen that the world wouldn’t end because of Brexit and the UK is now seen to be a desirable, well priced, high tech, high skilled market.”
Presenting the finding of their survey Deloitte said worries from recent years such as Brexit and weak global growth had “dropped sharply down the risk rankings”.
Top risks are now seen as labour shortages, climate change and inflation.
For many businesses, Covid is still seen as a risk, however Deloitte found many had reduced their risk rating for the pandemic compared to this time last year.
Within private equity markets, strong levels of activity have been sustained despite the pandemic.
Mr Nixon reported Maven had closed four sales in the week leading up to Christmas, with December the biggest month in the firm’s history.
While there is plenty of money coming into private equity funds, he suggested the main challenge would be whether there were sufficient opportunities to deploy this.