Private Equity M&A Report 2025
This is the seventh year we’ve published a report on UK M&A and private equity deal markets, in partnership with Pinsent Masons and Wiispa.
Overview
In 2024, we found the market to be somewhat akin to the British weather: changeable and unpredictable. The overall picture was one of fluctuating deal volumes and values, influenced by a mix of economic factors and market sentiment. The year started with a surge in activity driven by the anticipation of a new government and potential changes in tax policy, but this momentum slowed towards the end of the year due to economic uncertainties.
The private equity landscape continues to evolve, with 2025 shaping up to be a pivotal year for dealmaking. Transaction structures, bidding strategies and regulatory considerations are reshaping the competitive environment. High inflation and interest rates influenced investor behaviour, making some more risk-averse and prolonging due diligence processes. Despite economic headwinds, opportunities remain strong for well-positioned investors.
Energy on the rise
In 2024, Energy and Infrastructure related transactions made up 28% of transaction volumes, up from 20% the previous year, reflecting demand for assets across the spectrum of the energy transition. It will be interesting to see how policy developments in the US will affect this moving forward.
In value terms. Energy and Infrastructure transactions accounted for 58% of the total deal value, helped by a single £2.5bn transaction.
We also saw an increase in Financial Services and Life Sciences transactions. Retail and Consumer deals continued to make up 15% of our total deal volume. There was a decrease in transactions in Diversified Industrials, and perhaps surprisingly in TMT – though the latter may be a reflection of the volatility we saw in technology markets over the course of the year.
Private equity remains cautious
Private equity remains a major player in the M&A market, but firms are being more careful with how they invest. Fundraising is taking longer, so there's a greater focus on growing value within current investments rather than chasing new deals. Although there’s still plenty of capital available, investors are now focusing more on sectors like healthcare, tech, and infrastructure, areas where they can use their expertise to drive long-term growth.
Exit strategies are changing too. With IPO markets uncertain, many firms are turning to secondary buyouts, which have become more common in 2025. The rise in these deals, along with creative deal structures like delayed payments and Warranty and Indemnity insurance, shows how the industry is adapting to a more uncertain environment.
Despite ongoing macroeconomic challenges, private equity’s long-term outlook remains positive. Firms that prioritise innovative deal structuring, operational improvements, and strategic capital deployment will continue to find success.
Deal-making in an uncertain environment
This year, deal-making has become more competitive, with changing auction dynamics and growing use of structured deals like minority stakes and continuation funds. These trends show how private equity firms are adjusting to uncertain valuations and changing exit plans. Investors are taking more time to carefully review deals, which has lengthened the overall process. While competitive auctions are still common, more deals are now being done through direct negotiations, offering greater flexibility.
Tighter regulations have made cross-border deals more complex, pushing firms to strengthen their compliance efforts. Buyers are also showing cautious optimism, with more deals including delayed payments and longer periods of exclusivity.
Despite these challenges, demand for high-quality assets remains strong, with strategic buyers and financial sponsors alike seeking differentiated opportunities.
For a deeper dive into these trends and their implications, read the full Private Equity M&A Trends Report 2025.
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