Strong second half boosts UK year-end activity figures

It may not have been an especially pronounced recovery, but 2013 certainly seems to have marked the start of an upward trend for private equity in the UK's mid-cap engine room. On full-year numbers, the growth is almost imperceptible, with just one more deal having completed than the previous year (223 versus 2012's 222). But this masks the underlying trends somewhat. Deal activity in 2012 was heavily skewed towards a very strong first half, which then tailed off. In 2013, there has been a steady growth in deal numbers in each quarter, from 48 in the first three months of the year to 61 in the last. Value too was up on the full-year, but again modestly, from £6.35bn in 2012 to £6.6bn.

The gradually improving picture also hides differences in fortunes between the UK regions - especially in the lower mid-cap £5-50m bracket. The London region, which put in a barnstorming showing in 2012, was pegged back in 2013, with deal numbers in the smaller size range dropping by almost 28% from 83 to 65. The broader Southern region also saw some contraction in this bracket, with deal numbers down by six to 42. However, these falls were offset by equal rises in the more Northerly regions. Of the two, the North itself saw the most significant uptick in activity, with a jump from the 37 deals seen in 2012 to 55 - the highest level in the four-year sample. But the Midlands also saw deal volumes rise by almost a third in the lower mid-cap space, from 14 to 20. The boost from these two regions left overall deal volumes in the £5-50m bracket at exactly the same level as they finished in 2012.

Read about other trends in the UK mid-market, as well as a Q&A with LDC deputy CEO Chris Hurley, in the latest unquote" Regional Mid-market Barometer

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