
UK activity remains subdued while concerns over debt levels grow

Despite upbeat sentiment in the market and a positive first half of 2014 overall, UK dealflow has been lacklustre in Q2, according to the latest unquote” UK Watch, published in association with Corbett Keeling.
The survey results also revealed that respondents are increasingly worried about debt levels, with almost a quarter of those surveyed believing they are reaching unsustainable levels. However, two thirds of respondents do not view debt levels as a cause for concern.
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In the small-cap segment (deals with an enterprise value of less than €150m), activity was relatively strong in the second quarter of this year. In terms of deal volume, this segment improved with 34 transactions compared with 28 in the first quarter. And total value also strengthened, amounting to more than £1bn.
For deals carrying an enterprise value of more than £150m, deal volume rose slightly to nine transactions in the most recent quarter, up from just eight in the first three months of the year. Value in this segment fell to £2.1bn in the second quarter, compared with £2.9bn in Q1.
The weakest link here arguably was early-stage and growth capital deals, where volume was significantly down to just 84 transactions, compared with the first quarter's 103. And in value terms, total activity in the second quarter came in at £485m, a dramatic drop from the first quarter's £1.5bn. However, when reviewing activity for the first half of this year, the figures are well above the same period in 2013.
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