New research shows that the number of private equity deals in the UK hit a 25-year low in 2009, mainly because the credit crisis cut off cheap debt supplies and dissuaded business owners from selling. According to the Centre for Management Buy-out Research at Nottingham University, last year saw 117 private equity deals take place - fewer than half of 2008's 243 deals.
The total value of 2009's management buy-out deals was £4.7 billion, in contrast to the previous year's £18.2 billion. A slight rebound in private equity activity between October and December saw the value of buy-out deals go up 48 per cent from the previous quarter to £943 million, though that was still the lowest fourth-quarter figure for more than ten years.
Christian Marriott, director of research sponsor Barclays Private Equity, has commented that 2009 was "very, very poor" in terms of deal activity.
However, private equity advisers have suggested a build-up in demand among buy-out houses over the past two years could trigger a rebound in activity during 2010. One survey, by accountants BDO, indicates that nine out of ten private equity houses expect to do more deals this year.
An expected rise in capital gains tax after the likely May general election has been cited as further reason for an increase in business sales in the coming months.
In 2007, the UK buy-out market reached £43.4 billion when the Alliance Boots pharmacy chain was purchased for £11 billion.
