Investor appetite for UK small businesses hits record five year high

Second half of 2015 saw significant increase in investment activity following the outcome of the general election...

Private equity investments into UK small and medium-sized firms reached its highest level for five years, according to Lyceum Capital and Cass Business School’s UK Growth Buyout Dashboard.

Analysis of investments in 2015 with a value of between £10m and £100m found that the volume of transactions rose by 12% over the year. Overall, there were 87 investments totaling £3.43bn, compared to 78 investments totaling £3.38bn in 2014.

The report claims that investment activity rose significantly in the second half of the year when uncertainty about the outcome of May’s general election had abated, while the value of acquisitions of between £35m to £75m increased by 53% to £2bn year-on-year.

The business services and industrial sectors saw the biggest increase in the number of investments at 84% and 66% respectively, while healthcare saw a 33% contraction over the year. Although private equity acquisitions into retail and leisure also dropped by 33%, the £866m raised was significantly higher than that raised by other sectors.

While the total volume of deals remains at 30%-40% below the pre-financial crisis peak, growing investor appetite for UK businesses is expected to increase throughout 2016.

Andrew Aylwin, partner at Lyceum Capital, said:

“In a global economic market plagued with uncertainties ranging from falling commodity prices to volatility in the Far East, it is encouraging to see that the outlook for entrepreneurs and medium-sized companies has never looked stronger.”

Comments

(will not be published)