Professional services industry sails through pandemic with strong M&A winds
The professional services industry has sailed through the pandemic with significantly strong fundraisings and acquisitions, according to the latest research.
Private UK fundraising soared 78 per cent higher last year than in 2020, and sits some 70 per cent higher than pre-pandemic figures, analysis by Arden Partners has found.
Meanwhile, buyouts garnered a combined value of £3bn in 2021, more than tripling the figure from the year before.
With over 400 acquisitions recorded, the professional services industry kept a strong momentum coming into the new year.
The growth in takeover activity was driven by a strong final quarter, research found, where acquisitions reached more than £1bn for the first time since before the pandemic, totalling £1.36bn in the final months of 2021.
It signals a return to pre-pandemic acquisition levels for the industry, despite navigating the global health crisis relatively unscathed in comparison to other sectors.
“The UK professional services market is seeing a heightened level of fundraising and M&A activity as the sector has demonstrated its resilience and high-quality earnings, whilst continuing to go through significant structural change,” head of business and professional services at Arden, John Llewellyn-Lloyd said.
“It is still a hugely fragmented market with traditional firms, who have previously under-invested in IT infrastructure, experiencing pressures to invest to support remote working, for example, alongside pressures from increased compliance costs and more stringent regulation. In this environment, firms need to invest to gain economies of scale and develop new strategies, which is why we are seeing such a high level of activity in the sector.”
The industry is expected to maintain its current level of momentum, remaining highly active in the coming years, Llewellyn-Lloyd added.