Why private equity deals in Yorkshire have plummeted

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Private equity activity in Yorkshire plummeted during 2019 as investors were spooked by the political turmoil surrounding Brexit.

According to new research from KPMG, UK private equity deal volumes dropped to their lowest levels in recent years, falling by just under 25 per cent in Yorkshire.

Brexit a factor

Brexit a factor

KPMG’s latest study of private equity transactions in the region shows that 44 deals were completed in 2019 at mid-market level, compared to 58 deals in 2018.

The combined value of transactions in the region declined by nearly a fifth last year, down from £3.6bn to £2.9bn.

KPMG’s analysis of all UK transactions involving private equity investors indicates that a total of 978 deals completed over the course of 2019, with a combined value of £86.5bn, the fewest number of private equity transactions seen in the UK since 2014.

The UK mid-market also saw a decline in deal volumes, recording 532 deals in 2019 compared to 623 in 2018, albeit the combined value of these deals increased from £38.3bn to £39.9bn.

Christian Mayo, head of corporate finance at KPMG in Yorkshire, said: “Leeds has a strong private equity offering and the wider region has still seen a considerable number of deals complete over the past 12 months as investors scour the market for quality businesses.

“While there is confidence in the market, our research shows the impact that persistent uncertainty around Brexit, coupled with broader geopolitical turmoil, has had on investor appetite locally and nationally.”

Mr Mayo added that the imbalance between demand from private equity to deploy capital and the number of opportunities to invest in buyout deals in high quality assets remains an ongoing issue in Yorkshire.