Private equity deals drop off in second quarter despite booming start to the year, new figures show

 
Lucy White
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Private equity deals came in thick and fast in the first quarter of 2017 (Source: Getty)

Britain's private equity sector has endured a topsy turvy first half of the year, with buyout activity diving in the last three months despite a strong start to 2017.

A number of megadeals valued at more than €1bn (£879m) closed in the first quarter, such as CVC’s sale of Formula One for €7.5bn.

However, data from Imperial College Business School’s Centre for Management Buyout Research (CMBOR) shows a drop-off in deals from April to June.

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Overall in the first half of 2017, UK deal value stood at a reasonable €9.4bn. But only a tiny fraction of this, €1.8bn, occurred in the second quarter.

“I don’t think you can read too much into one quarter, but I was surprised just how far off the UK activity had fallen after a good first quarter,” said Callum Bell of investment bank Investec.

“The really surprising thing is market sentiment from people I speak to, such as advisers, private equity, debt providers. They’ve all said it feels quiet in the UK.”

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The UK, which is traditionally the strongest region in Europe for management buyouts, was being chased closely by Germany in the first half.

Germany recorded €8.5bn worth of deals over the six months, and its second quarter performance dwarfed the UK’s at €5.6bn.

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Headline activity was strong across Europe, with 11 megadeals in the first half. This has already surpassed the 10 completed in the whole of 2016.

But this hid a drop in the “generally robust” European mid-market, after a spate of elections.

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