Total private equity investment in the North West increased significantly in 2024, according to the latest UK Private Equity Review from KPMG UK.
The annual study into private equity activity found that investment in the region grew by two-fifths (41%) in 2024, totalling £20bn.
The findings reflect a period in which the UK experienced a more stable economic climate, with interest rates and inflation falling, greater political certainty following elections, and a surge in transactions ahead of anticipated changes to Capital Gains Tax.
The volume of deals in the region increased from 165 to 203 year-on-year as volumes returned to 2022 levels. Encouragingly, the overall level of investment increased by 71% compared with 2022.
Investment in the North West accounted for more than a 10th (12.5%) of all new PE backing in the UK, and was the most active region outside London, which continued to deliver the greatest interest from PE funds, attracting £78.1bn of investment.
Christian Mayo, Head of Corporate Finance in the North West at KPMG UK, said: “Despite the adverse economic headwinds of recent years, the North West continues to be an integral hub for private equity investment.
“In 2024, the North West’s private equity landscape was bettered only by London, which is testament to the resilient business ecosystem on our doorstep.
“Our pipeline is rich with investment opportunities and, with a renewed sense of optimism from investors, businesses and the corporate finance community alike, 2025 promises to be another positive year for investment.”
Across the UK, total private equity investment activity increased through 2024 – 1,699 transactions, with a total value of £158.9bn were completed during 2024, which represents an almost 12% increase in deal values from 2023.
The majority of deal activity took place in the second half of the year, with values increasing to their highest level since the first half of 2022.
Alex Hartley, Head of Corporate Finance at KPMG UK, said: “There are encouraging signs from the 2024 data that deal activity may have bottomed out in the UK in 2023, as we saw activity, both in volume and value, pick up last year.
“In particular, we saw significant activity in the second half of the year as many business owners tried to get ahead of expected changes to Capital Gains Tax.”
He added: “Given the current signals in the market around increased activity levels – alongside reducing inflation and interest rates and greater political certainty – there is cautious optimism that UK private equity deal activity will see further growth through 2025 and 2026.”
Business services dominated the private equity deal market, representing 43% of the total deals made in 2024, up more than 10% over the previous year.
However, it was TMT (technology, media and telecommunications) which emerged as the hottest sector. Deal volumes were up nearly 19% year-on-year and cumulative values were up nearly 58% over the same period, capturing more than £40bn in total deal value.
While deal volumes were both down in Financial Services and the Energy sectors, the value of those deals was greater than their sum. Financial services represented 11% of the deals, but 14.6% of the value, while energy represented three per cent of the deals, but 4.7% of the overall value, indicating that they were both punching above their weight.
Another sector that saw a resurgence was Consumer Goods and Retail, with volumes up 5.3% to 138 and values up 21% to £10.7bn, reflecting improving consumer confidence through the year.
