Private equity activity has picked up despite the looming EU referendum

William Turvill
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The decline in private equity activity was more pronounced in Europe, according to the research (Source: Getty)

Private equity deal activity picked up in the second quarter of this year despite the upcoming EU referendum.

In the first quarter of 2016 there were 42 deals tracked with a value of £2.9bn. In the second, there were 46 deals worth £3.1bn.

UK private equity deal value was down by a third in the first half of 2016 overall to £6bn and volume was down by a quarter to 88 buyouts.

Read more: Why there could be a burst of private equity activity after the referendum

In Europe as a whole, deal value halved from the second half of 2015 to the first half of 2016, from €48.5bn to €25.6bn, according to Centre for Management Buyout Research, sponsored by Equistone Partners Europe Limited and Investec Bank.

But the research found activity remains strong in the lower mid-market, with larger deals being held off on.

“The statistics reflect a normalisation of activity for private equity,” said John Clifford of Investec Bank. “The market is cooling off, with the EU referendum one of a number of challenges currently facing deal-doers. This has made larger deals more difficult to complete, but we are encouraged to see the lower mid-market persevere – it highlights private equity’s ability to truly invest across all cycles.”

Read more: Private equity firms close in on O2 as Telefonica prepares it for listing

He added: “The figures suggest that concerns over a possible Brexit are most pronounced at the larger end of the market, with the lower mid-market conducting business as usual.”

Elsewhere, research from primary research company Third Bridge suggested that while private equity activity has dipped this year so far, firms may be gearing up for a burst of activity after the referendum.

The suggestion there could be a surge in activity after the referendum was also backed by Graeme Gunn, a partner at SL Capital Partners.

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