Midlands private equity investment activity falls in 2023

Private equity investment activity in the Midlands experienced a decline in 2023 due to challenging macroeconomic conditions, according to the latest mid-market Private Equity report by KPMG UK.

The report indicated that 64 deals valued at £5.1bn were finalised in the Midlands in 2023, marking a 20% decrease in volume and a slight 4.5% dip in total value compared to the previous year’s transactions.

Despite the downturn, the Midlands still accounted for over 9% of total investment activity in 2023, positioning it as the third most favored region for mid-market deals, trailing behind London and the North East.

Nationally, the report disclosed that 675 deals totaling £47.9bn were completed in 2023, reflecting a 10% reduction compared to 2022’s 735 transactions.

Although deal volumes decreased across the board in 2023, business services retained its prominence as the leading sector for activity, followed by Tech, Media, and Telco (TMT).

Conversely, Financial Services witnessed a surge in investment activity, standing out as the only sector to experience growth despite the overall decline.

Khush Purewal, head of deals at KPMG UK in the Midlands said: “As we entered 2023, there were high hopes of a return to stability. However, it soon became clear that 2023 was going to be a challenging year for dealmaking.

“Persistent macroeconomic instability meant that deal momentum in the Midlands was subdued, but we saw an uptick of 18% in the total value of investment when compared to pre-covid figures – hinting at a stabilising market.”

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