UK transactions involving mid-market private equity investors in the North West of England cooled in the first half of 2023 amid market volatility and tough trading conditions, new analysis from KPMG UK has revealed.
The firm’s latest Mid-Market Private Equity study, which tracks deal flow and sentiment, shows that 32 deals worth £3.6billion were completed in the North West in H1 2023, reflecting a drop in volume of more than 21 per cent, but also an uptick in total value by 80 percent, when compared to the same period in 2022.
In terms of the proportion of deals completed in the region, the North West accounted for over 9.8 per cent of all deals taking place in H1 2023, a slight reduction from 11 per cent in H1 2022. The picture also remained largely unchanged elsewhere in the country, with almost half of all mid-market deals (47.4 per cent) completed in the London region.
On a national level, the report revealed that 327 deals worth £32 billion were completed in H1 2023, a reduction in volume of 12 per cent when compared with the same period in 2022.
For the overall private equity market, however, more clouds appeared on the horizon as 689 deals worth £70 billion were completed in the first half of the year, compared to 909 deals completed in H1 2022.
Christian Mayo, Head of Corporate Finance at KPMG in the North, said: “In the first half of this year, the pace of mid-market private equity transactions in the North West slowed, reflecting the overall nationwide trend. The cumulative impact of heightened inflation, escalating interest rates, and geopolitical uncertainties has eroded investor confidence. But, despite the difficulties faced, the region’s dealmaking industry has managed to hold on to its strong position in the market.”
Rick Stark, Head of Private Equity at KPMG in the North, added: “Particularly noteworthy within the latest findings is the rise in the value of transactions completed across the mid-market segment. This rise is likely due to broader market forces causing larger transactions to transition into the mid-market category, but it’s a trend to keep a close eye on in the coming months.”
