UK - Dealflow to increase in H2

The results are taken from the Q2 UK Watch update, produced in association with corporate finance boutique Corbett Keeling, which canvasses opinion of unquote" readers each quarter regarding market outlook. The survey is out in today's unquote" (13 July 2009, page 22), which, incidentally, also records the highest deal volume in any unquote" so far this year (18 in the fortnightly issue).

70% of respondents expect larger deals to maintain their current levels over the same time period, though the number expecting a rise in dealflow in this area is also double that seen in Q1.

The attitude reflects anecdotal evidence, with a number of lenders and corporate financiers reporting 'better quality investment memoranda' coming across desks since early May. Given that such deals take longer nowadays to complete - management negotiations alone have doubled in length on average (13 July 2009, page 16) - one can expect announcements in the autumn at the earliest.

Advisers put the uptick down to vendors coming to terms with new pricing levels, as well as GPs' flexibility on funding: if the quantity of leverage needed is not available, loan notes, increasing equity cushions and even using incumbent lenders is on the up. The recent Wood Mackenzie secondary buyout by Charterhouse from Candover exemplified all three characteristics (13 July 2009, page 36).

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