Against a background of enhanced growth and confidence in M&A activity, the North West Private Equity Market continues to punch well above its weight in comparison to other regions. With 2017 data still pending, the region remained the most active outside London/the South East and outperforms its Yorkshire, Midlands and South West counterparts.
The statistics make healthy reading with the 2016 figures revealing PE houses making total investments of over £520m. In terms of deal volume and despite being down on 2015 figures, the 19 deals completed in 2016 still outstripped the competing provinces. As a national figure, the North West contributes around 10% of total private investment in the UK.
The North West remains an attractive proposition for PE funding. It is home to a number of well-established PE houses with substantial capital to invest in good quality fast-growth businesses. The North West appears to be fertile ground – with an excellent range of digital/ media businesses amongst other more traditional sectors.
Research in the region also suggests that PE groups prefer to invest in entities still operated by their founder shareholders. This mode of buy-in certainly reflects the long-standing tradition of North West OMB/SMEs continuing to be developed by creative hands-on entrepreneurs.
PE players also emphasise that their offering is not restricted to growth capital and successful exits. SMEs in their infancy also require expertise regarding talent management and succession. Given the PE providers were often previously entrepreneurs themselves, this knowledge assists the backing process – especially in primary buyouts.
Whilst deal activity in 2016 was slightly tempered by the Brexit vote, there is plenty of anticipation around the 2017 data and good prospects for 2018. There are therefore numerous reasons to be optimistic across PE activity in a range of different sectors. The future is therefore bright for deal-making.
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