Private equity gets boost from small Brit firms
PRIVATE equity investment into UK small and medium sized firms hit a two year high in the first half of 2015, according to figures, underscoring the insulation small British outfits enjoy from global headwinds.
Turmoil in the Eurozone sparked by the Greek debt crisis and ongoing fears over a slowdown in China have hit larger British corporates hard this year.
Yet the latest statistics, published by Cass Business School and private equity investor Lyceum Capital, suggest smaller enterprises – worth less than £50m – are in rude health and attracting increasing attention from buyout investors.
Between January and June this year, 80 per cent of UK private equity transactions in the £10m to £100m bracket involved the acquisition of controlling stake in a smaller company. The total value of deals amounted to £1.4bn, the highest level since 2013.
“We expect 2015 to be the third year in a cycle of strong private equity activity. Indeed, lower mid-market activity has been remarkably consistent in the past two years, with less volatility than other equity and financial markets,” Cass professor Scott Moeller said.