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Laxman Pai, Opalesque Asia: Buyout investment in the UK has soared since the EU Referendum in 2016, with the $125bn of private equity-backed acquisitions recorded in 2021 smashing previous records, said a study.
According to the latest Preqin territory guide, 'Buyouts in the UK 2022', the average deal size for investments with a disclosed value increased from $65mn in 2017 to $147mn in 2021 and was $115mn for the first eight months of 2022.
"The UK's decision to leave the European Union has had a dramatic impact on its private equity buyout market. Assets under management (AUM) rose by 77% from $181bn in December 2016 to $321bn by the end of 2021," the study pointed out. This equates to a CAGR of 12.1%, a dramatic change from the 1.8% for the period from December 2010 to December 2015.
The driver of the increase in AUM was a surge in the value of unrealized investments, which rose from $122bn at the end of 2016 to $235bn by December 2021.
Dry powder grew at a slower pace, from $60bn to $86bn over the same period, and the ratio of dry powder to AUM declined from 49% in 2016 to 36% by December 2021. This decline indicates that GPs haven't struggled to put capital to work, despite a buoyant fundraising market that has seen a total of $191bn raised between 2017 and 2022 YTD.
While the value of buyouts of UK-based companies dipped in 2016, it climbed in 2017, 2018, and 2019, when $41bn, $63bn, and $73bn of deals, respectively, were completed. After a qui...................... To view our full article Click here
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