Market recovery: Private equity transactions pick up speed following initial slower pace in 2022
In the first half of 2025, the UK private equity market has experienced a significant revival, with US investment firms like Blackstone playing a prominent role. Notably, Blackstone's substantial growth and investment scale have been cited as significant factors, as evidenced by the Osisko Development's private placement involving Double Zero Capital LP, a Delaware-based investment entity that acquired a 15.4% stake, raising approximately $203 million.
This resurgence has been marked by a bounce back in mega deals, signalling that confidence is returning to the upper end of the market. The UK private equity market has been described as open for business, making it easier for deals to be closed. This openness, coupled with the government's fresh recognition of the need for private capital and the recent monetary easing from the Bank of England, has contributed to the renewed deal-making sentiment from investors.
The deal count for UK private equity deals has rebounded, rising 19.2% to 1,060 completed deals in the first half of 2025. US investor participation in UK deal activity has risen, accounting for 31.3% of total deal value. This trend is reflected in the surge in buy-out activity, which accounted for the majority of deal value for the first time since 2021 in the first half of 2025.
Mid-market buyout deals have dominated the number of deals recorded in the UK. The surge in buy-out activity has been driven by a greater availability of debt financing and the seller's willingness to transact at realistic valuations that reflect market conditions. This shift towards buy-out deals indicates that private equity firms are positioning themselves to focus on long-term growth rather than quantity of deals.
Despite domestic investors' scepticism of UK market conditions, US firms do not share this attitude. In fact, US firms are increasingly deploying capital in the UK, where competition for assets is less intense compared to their domestic market. The UK has become an increasingly popular destination for private equity investment due to its openness to private markets and concentration of leading firms.
Nicolas Moura, senior EMEA private capital analyst at PitchBook, reinforced the optimism about the UK private equity market. He noted that US firms are choosing to look beyond their domestic market and are focusing on growth opportunities and relative value in other markets, such as the UK.
The market has recorded a string of large high-value deals, including the Apollo-backed Athora's £5.7bn acquisition of PIC and KKR's £4.8bn takeover of Spectris. These deals underscore the attractiveness of the UK market to US investors, who see it as a promising destination for private equity investment.
In conclusion, the UK private equity market is experiencing a resurgence, with US investors playing a key role. The open regulatory landscape, combined with the government's support for private capital and the Bank of England's monetary easing, has created an environment conducive to deal-making. As such, the UK remains an attractive destination for private equity investment, particularly for US firms seeking growth opportunities and relative value.
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