UK is No Longer Europe’s Biggest Private Equity Market

We, however, believe that it is too early for gloom: the dynamics may change once the markets have more clarity.

GAME CHANGERS
Britain is no longer Europe’s biggest private equity market by value as buyout executives are postponing investments until the situation surrounding Brexit becomes clearer.

Deal value in the UK has dropped by a third to €21.4 billion in the year to December 2018 which was exceeded by a total value of €23.5 billion in the Netherlands, according to a new study by the Centre for Management Buyout Research at the Imperial College Business School.

Although the UK had more than three times the deal volume of the Netherlands of the top 10 largest European buyouts just one was in the UK.

France also benefited from the UK’s problems, whose private equity market increased by 35 per cent in value.

The survey also revealed the value of exits this year came at €93 billion, below the total value of new investments at €100.7 billion for the first time in almost a decade.

Separately, private equity-backed initial public offerings fell by half in terms of value to €7.5 billion in 2018 as investors remained worried about volatile public markets, the research showed.

The findings support the view that private equity executives are increasingly concerned about uncertainty caused by Brexit. We, however, believe that it is too early for gloom: the dynamics may change once the markets have more clarity.

The UK was not the only market that experienced a decline. In Germany deal values dropped from €18.7 billion last year to €7.1 billion in 2018 due largely to a lack of “jumbo” deals, the researchers said.

Published: December 17, 2018