Buyout activity for private equity firms across the Midlands fell significantly in 2023 following record figures during the post-Covid recovery.
This comes according to provisional data from the Centre for Private Equity and MBO Research at Nottingham University in partnership with Equistone Partners Europe.
Their research identified 28 Midlands-based deals last year worth a total of £1.2 billion – down from £5.9 billion in 2022.
The preceding two years had seen the two highest annual figures since 2008, but reduced activity in 2023 reflected an industry-wide pause seen across the UK and Europe.
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Just £0.1 billion worth of deals was completed in the first six months, with the vast majority coming later in H2 2023.
Traditional sectors like business services and industrials were found to have held steady last year, while TMT and healthcare faced major corrections in the wake of their pandemic-era boom.
Will Copeland, Investment Director at Equistone’s Midlands office, said: “The full extent of the decrease in Midlands buyouts was not anticipated, but we are seeing green shoots with a rise in activity in the second half of the year.
“There has not been a shortage of opportunities to do deals in 2023. However, transactions have faced a number of challenges which have often resulted in the timing not being right.”
“Looking ahead to 2024, the slowdown in private equity and debt deployment over the last 12 to 18 months could cycle to an increased urge for new investment and exit activity, potentially resetting valuation expectations compared to the post-Covid boom.”
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