Regulatory tailwinds boost private equity appetite for UK companies
Financials and industrial-related assets across public and private markets were thought to be the most active and competitive sectors.
The study, which surveyed 200 UK-based senior private equity professionals, found that 85% of respondents viewed the UK as a better investment environment versus other geographies.
Regulatory tailwinds were cited by 33% as a key factor supporting their view. Depressed valuations in UK public markets was also highlighted as an attractive feature for 29% of those polled.
Numis: FTSE leaders bullish on revival of UK listings
Despite this value opportunity in public assets, Numis analysts found current deal pipelines were focused on private assets, with 71% of respondents saying they preferred private companies.
This was a significant pivot from last year, when 73% of those asked said their deal pipelines were focused on UK-listed companies.
Numis attributed the decline in PE's appetite for public assets to a «growing perception» that it was becoming harder to agree terms with company boards and shareholders for public assets.
«This execution challenge is similar in private markets, but with a broader opportunity set, sponsors have shifted their pipelines to private assets,» the analysts said in a note.
However, not all is attractive in the UK for private equity specialists. Almost three quarters (73%) said financing conditions were a challenge weighing on their appetite towards the country.
Looking across PE markets more broadly, the Numis survey found a clear belief there has been a «significant increase» in assets considered overvalued, compared to 2022.
More than half (53%) of private equity professionals think private assets are overvalued, with 37% saying this was the case for public
Read more on investmentweek.co.uk
