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Mid-market PE investment soars to highest ever level in 2021

Despite uncertainty caused by Covid-19, economic and geopolitical factors, both volumes and values saw a boost

Mid-market private equity investment in the UK in 2021 soared to the highest level ever recorded, according to new analysis from KPMG.

Despite uncertainty caused by Covid-19, economic and geopolitical factors, both volumes and values saw a boost, as a total of 803 deals, worth £46.8bn were completed in 2021 – an increase of 40% and 36%, respectively.

KPMG’s latest study also showed that while disruptions caused by the pandemic made 2020 an “atypical year” for dealmakers, the levels of activity seen in 2021 still surpassed pre-pandemic levels, with deal volumes up 20% and deal values up 15%, compared to 2019.

The UK’s private equity market overall also thrived with a total of 1,545 deals worth £159.2bn completed in 2021, up from 1,117 in 2020 and 1,246 in 2019.

Jonathan Boyers, head of KPMG’s UK corporate finance practice, said: “The UK’s private equity market saw a dramatic return to form in 2021, as confidence returned and pent-up demand was released.

“The momentum we saw at the end of 2020 continued to gather pace into the first half of 2021, and while activity dipped slightly throughout the rest of the year, the levels maintained were still a record high. In the final quarter of 2021, some clouds began to gather on the horizon, with inflation, supply chain stability, fiscal-monetary policy and COVID-19 variant concerns on the minds of many, however, deals continued to get done.”

He added: “There’s no denying that the UK’s M&A market had a stellar year in 2021, and while performance was strong across the board, it’s evident that some sectors were more resilient than others, such as technology, media and telco (TMT), tech-based business services, consumer goods and retail.”

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