UK private equity deals bounced back in the later stage of the first half of 2025, as investors became increasingly optimistic about growth opportunities.
The total deal value for UK private equity deals dropped 5.3 per cent to £55.7bn, broadly mirroring the rest of Europe, according to new analysis from financial data platform PitchBook.
However, deal count recorded a sharp rebound after a sluggish first quarter, rising 19.2 per cent, to 1,060 completed deals.
The market also recorded a string of large high-value deals including the Apollo-backed Athora’s £5.7bn acquisition of PIC and KKR’s £4.8bn takeover of Spectris.
This renewed deal making sentiment from investors was credited to the government’s fresh recognition of the need for private capital as well as the recent monetary easing from the Bank of England.
Nicolas Moura, senior EMEA private capital analyst at PitchBook reinforced this optimism, said “ The UK regulatory landscape is open for business, making it easier for deals to be closed.”
Mid-market and mega deals
The share of buy-out deals increased to 25.7 per cent of total deal count, while also accounting for the majority of deal value for the first time since 2021.
The surge in buy-out activity was driven by a greater availability of debt financing and seller’s willingness to transact at realistic valuations that reflect market conditions.
In particular, mid-market buyout deals dominated the number of deals recorded, with Moura noting it is traditionally “where PE firms operate because it represents the largest volume of companies”.
The market also recorded a bounce back in mega deals, lifting the average deal value and signalling that confidence is returning to the upper end of the market.
This renewed appetite for large buyouts suggests that private equity firms are positioning themselves to focus on long-term growth rather than focusing on quantity of deals.
US investors eye attractive valuations
While domestic investors remain sceptical of UK market conditions, US firms do not share this attitude, projecting a bullish market sentiment.
US firms are increasingly choosing to look beyond their domestic market, where competition for assets is intense, and deploying capital in markets which offer growth opportunities and relative value.
The UK has become an increasingly popular destination due to its openness to private markets and concentration of leading firms.
US investors participation in UK deal activity has climbed steadily, rising from 20.5 per cent of total deal value to 31.3 per cent in 2025.