Private equity activity falls in Yorkshire and the Humber in the first half of 2023

The figures from CMBOR, the Centre for Private Equity and MBO Research based at Nottingham University Business School and supported by Equistone Partners Europe, showed that four deals were

completed in the first half of the year, representing a 60 per cent drop from the same period in 2022, when 10 deals completed.

Deal volume was also down compared to the latter half of 2022, falling 50 per cent. This also represents the lowest half-year result for the region in over 20 years.

Deal value fell to £240m during the period, representing a 27 per cent decrease from the first half of 2022, when transactions totalled £331m.

However, deal value was still higher than the second half of 2022, when only £129m worth of deals were completed.

Half of the deals completed in the first half of the year were in the manufacturing sector, a reflection of the region’s strong manufacturing ties. An additional two deals were completed in the business and support services industry.

Notably, Equistone Partners Europe’s acquisition of Pudsey-based Nexus in January was ranked among the UK’s 20 largest private equity deals for the first half of the year.

Across the north of England, 13 deals completed in the first half of the year, accounting for 22 per cent of all UK deals. In terms of completed transactions, the North was not far behind London’s 17, although deal value remained lower, attracting £795m in capital as opposed to over £2bn in London.

The continued dip in private equity activity comes amid stubborn inflation figures and rising interest rates across the UK and much of Europe.

Sebastien Leusch, investment director at Equistone Partners Europe, said: “Just as we saw in the second half of 2022, persistent economic uncertainty coupled with rising interest rates and inflation have all created a more challenging market. Given this, the fall in the number and value of deals across Yorkshire and the Humber in the first half of 2023 isn’t surprising.

"However, deals like our acquisition of Nexus earlier this year show the immense level of business potential within the region, even during periods of slower economic growth.

“As we head into the second half of the year, we’re likely to see deal activity begin to pick up again across the UK, given the pent-up supply from private equity houses.

"There remains a number of ambitious, high-quality management teams and businesses both in Yorkshire and the Humber, as well as across the North of England. Therefore, the region is likely to continue being a hub for private equity deal activity over the coming years.”