In his regular quarterly commentary on UK private equity investment activity, Jim Keeling finds that, while transaction statistics for the second quarter were slightly lackluster, the overall position remains strong and he expects to see an increase in activity over the rest of the year.

The smaller buyouts sector (enterprise value of less than £150m) held up relatively well in the second quarter and both volume and value were significantly higher than in the same period last year. While the volume of larger deals (enterprise value of £150m or above) rose slightly in the second quarter, the value fell from £2.9bn to £2.1bn. The weakest segment of the market was early-stage and expansion capital deals where the volume, while still a respectable 84, was significantly down on the first quarter’s 103 deals. The value also saw a significant fall from the first quarter’s bumper £1.5bn to £484m though taken together volume and value in the two quarters were still well up on the same period last year.

While debt levels are starting to worry some market participants, the majority of market participants are not concerned and we have seen a number of new debt providers coming into the market.

While prices are rising, they remain in line with expectations.

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