Private Equity’s best year

Private equity investment activity in the UK and Worldwide has hit its highest activity since before the Financial crisis and it is forecasted to be even stronger in 2018 according to an article in City A.M by Lucy White. Cheap debt and record sums of ready cash has lifted the value of deals globally to $212 billion (approx. £159 billion). In the UK between July and September 2017, 44 deals worth £12 billion combined were completed. Julian Longhurst, head of Unquote, leading European private equity specialists said, “Given the rate that new capital is flowing into the private market, it is perhaps not surprising that the need to put money to work is currently outweighing doubts over political uncertainty”. According to Unquote there has been the most capital in UK companies in one quarter for a decade.

The full year of 2017 is set to be more active than 2016 with 147 deals completed in the first three quarters of this year compared to 122 in the same time period of the previous year, despite a fall in the volume of deals over the quarter from 47 to 44. Some of the biggest deals in the UK include the acquisitions of PaySafe by Blackstone and CVC for £3 billion and Cinven’s £2.4 billion sale of CPA Global to Leonard Green & Partners. Since the financial crisis some of the largest private equity deals worldwide include the sale of Toshiba’s memory chip by a Bain Capital-led consortium for $18 billion and the $6.5 billion takeover of US office supply retailer Staples by Sycamore Partners.

In total, buyouts in Europe reached $69 billion in the first nine months 2017 w
hich is a 60% increase from the same period in 2016 as stated in te Financial Times article “Value of private equity dealmaking at highest level since 2007”.

“We could have two to three years of relatively buoyant growth and high levels of M&A” – Mark Redman, Global head of private equity at OMERS, a Canadian pension fund.

Author: Melissa Simson, October 2017