UK private equity deals are staging a dramatic comeback after a sluggish Q1 2025. Deal activity jumped 19.2% to 1,060 completed transactions in the first half, driven by mega deals and renewed investor confidence. While total UK private equity deal value dropped 5.3% to £55.7bn, the surge in deal count signals market recovery as investors embrace realistic valuations and improved financing conditions.
UK Private Equity Deal Activity Rebounds Strongly
The UK private equity market showed classic recovery signs in H1 2025, with deal count growth significantly outpacing value decline. This uptick in private equity transactions reflects improved market sentiment following Bank of England monetary easing and government support for private capital.
Major private equity deals dominated headlines, including Apollo-backed Athora’s £5.7bn acquisition of PIC and KKR’s £4.8bn takeover of Spectris. These mega deals lifted average transaction values and demonstrated renewed confidence in large-scale private equity investments.
Nicolas Moura, senior EMEA private capital analyst at PitchBook, highlighted the improved regulatory environment: “The UK regulatory landscape is open for business, making it easier for deals to be closed.”
Mid-Market Buyouts Drive Private Equity Growth
Buyout deals captured 25.7% of total UK private equity deal count, accounting for the majority of deal value for the first time since 2021. This shift towards buyout activity reflects improved debt financing availability and seller willingness to accept market-realistic valuations.
Mid-market private equity buyouts dominated transaction volumes, representing the traditional sweet spot where PE firms operate most actively. These mid-market deals benefit from the largest pool of target companies and improved financing conditions.
The return of mega deals in UK private equity also boosted average deal values, signalling renewed confidence at the premium end of the market. Private equity firms are prioritising long-term growth strategies over transaction quantity.
US Private Equity Firms Target UK Market Opportunities
While domestic UK investors remain cautious, US private equity firms are aggressively pursuing UK opportunities. American PE participation in UK deal value surged from 20.5% to 31.3% in 2025, highlighting contrarian investment appetite.
US private equity investors see attractive valuations and growth potential that domestic players are overlooking. The UK market offers less competition than US private equity markets while maintaining regulatory openness and access to quality target companies.
This international private equity interest demonstrates the UK’s appeal as an investment destination, particularly for firms seeking alternatives to highly competitive domestic markets.
Private Equity Market Outlook Improves
The UK private equity landscape shows strong momentum heading into the second half of 2025. Key drivers include realistic asset pricing, available debt financing, regulatory support, and increasing international investor participation.
Mega deal activity suggests private equity firms are confident about long-term growth prospects rather than focusing purely on deal volume. The combination of improved financing conditions and government recognition of private capital’s importance creates a positive environment for continued private equity deal flow.
Frequently Asked Questions
Q1: What drove the UK private equity deals recovery in H1 2025?
A: The private equity rebound was fueled by Bank of England monetary easing, government support for private capital, and sellers accepting realistic valuations. Improved debt financing availability also boosted buyout activity significantly.
Q2: Why are US private equity firms increasing UK investments?
A: US private equity investors see attractive UK valuations and growth opportunities that domestic investors are missing. The UK offers less competition than US markets while maintaining regulatory openness and quality target companies.
Q3: Which private equity deal types performed strongest?
A: Buyout deals dominated, representing 25.7% of deal count and majority deal value for the first time since 2021. Mid-market buyouts particularly benefited from improved financing and realistic seller expectations.
Q4: Are mega private equity deals returning to the UK market?
A: Yes, major deals like Athora’s £5.7bn PIC acquisition and KKR’s £4.8bn Spectris takeover demonstrate mega deal confidence. This signals private equity firms are focussing on long-term growth over transaction quantity.
Q5: What’s the outlook for UK private equity deals in late 2025?
A: The outlook appears positive with realistic pricing, available financing, regulatory support, and growing international interest. Momentum suggests continued deal flow if monetary policy remains supportive and sentiment improves.
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Effective Date: 15th July 2025
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