Value Of European Private Equity Deal Rises, UK Falls Behind


Last year, the value of private equity deals increased across Europe except in the United Kingdom where the value was 34 percent lower as compared to that recorded in 2017.

Some analysts said that the large-cap deals dropped in the United Kingdom, bucking the trend for the rest of the continent, as bigger businesses were more vulnerable to the uncertainty of Brexit.

The value of European private equity deals reached €173 billion (£155.92 billion) in 2018, an increase from the €149.2bn that was recorded during the previous year. According to figures from Unquote Data, it is the highest figure since 2007.

In the United Kingdom, however, the value dropped to €27.2 billion from the €41.3 billion from the previous year.

Julian Longhurst, the head of data and research of Unquote, stated: “The deal-making picture in the UK is currently a nuanced one.”

He added: “There remains a high level of mid-market activity, owing largely to the historically high number of UK-focused funds that have been raised in this part of the market in recent years.”

He continued: “However, while we have seen large-cap deals increasing in many areas of Europe, the UK has seen a sharp decline in that regard.”

He concluded: “This might well be because potential target companies with international suppliers and clients – which tend to be larger businesses – are more vulnerable to any Brexit outcome that would raise barriers to trading with the European Union.”

Last year, the number of private equity buyouts in Europe dropped. According to the latest figures, it dropped to 959 from 1053 recorded the previous year.

The European fundraising slowed with only 68 buyout funds closing as compared to the 105 recorded in the previous year.

Longhurst added: “Fundraising levels have dropped off from the historic highs of 2017 for private equity funds across Europe as a whole.

“However, the UK has experienced a slightly more dramatic decline than neighbouring European regions as some investors adopt a “wait and see” approach with regards to Brexit and allocate capital to continental European competitors in the interim.”