Blog: Private equity firms dismiss Brexit concerns in European investment surge – City A.M.

Private equity firms dismiss Brexit concerns in European investment surge

UK private equity firms shrugged off Brexit concerns and went on the offensive in Europe last year as acquisitions of corporates on the continent jumped 80 per cent, fresh data has revealed.

The number of European corporates snapped up by UK private equity rose from 245 in 2020 to 442 in 2021, according to research by independent financial consulting firm Accuracy. In the second quarter of 2021, dealmakers notched up a 50 per cent jump in deals compared to the first quarter.

Accuracy partner Charlene Burridge said the figures showed UK dealmakers rebounded fast from a covid slowdown.  

“UK private equity acquisitions of European companies bounced back sharply in 2021 as firms made up for time lost during the pandemic,” she said.

“Despite fears that regulatory and legal changes stemming from Brexit would stifle dealmaking, European corporates remain attractive investment opportunities for UK private equity firms.”   

European software and tech firms caught the eye of UK dealmakers with the two sectors accounting for over a third of the UK private equity investment.

Global private equity transaction activity into Europe in 2021 also surged by more than 45 per cent compared to the prior year, while domestic private equity activity in the UK increased by more than 65 per cent during the same period.

The spike came amid a global dealmaking frenzy in 2021 as private equity firms splurged after a major pandemic slowdown in 2020.

Global dealmaking hit $5.9tn last year, sailing past previous records and jumping 64 per cent on the year prior.

But the shocks of war in Ukraine and soaring inflation have put the stoppers on a boom this year, with deal value slumping 21 per cent in the first quarter compared to the all-time high of $1.8 trillion last year, according to data from intelligence firm Refinitiv.

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