Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London – 21 September 2021 – A shift away from publicly traded companies and towards private equity as a central driver of the UK economy has been accelerated by pent-up demand and low interest rates. With an increase of 39% in closures of mid-market private equity deals alone in the first half of 2021 compared to 2020, we are currently enjoying a buyers’ market. Here HULT Private Capital examines this good news for private equity investors in greater depth.
What are the numbers?
Across the private equity market, we are seeing renewed confidence amongst investors. During the first quarter of 2021, closed private equity deals in Britain reached a five-year high compared to previous Q1s. H1 saw 785 deals completed with a total value of £73.7 billion, impressive figures last seen in 2017. This marks a 61 % growth in volume and 48 % increase in value of the transactions completed in H1 2020.
Contrasting these figures with the EU which saw just 14 % growth, it is clear that the UK holds considerable potential for investors looking to expand their holdings in the private equity market.
What is driving the expansion?
One of the key forces behind the flurry in the market is the revival of deals that were paused during the first half of 2020 as the pandemic took hold. With investors now returning to the field keen to lay down cash, the private equity market has been reinvigorated.
Compounding this, the UK’s relatively cheap equities are encouraging buyers to spend. The mass withdrawal of investors from UK equity income funds following the 2016 Brexit vote made the UK stock market appear enticingly cheap compared to the EU and US. Those now keen to invest are enjoying the appealing opportunities this presents.
Low interest rates are also pushing investors towards private equity in search of higher yields, including via buyout firms like HULT Private Capital who are offering attractive returns. Moreover, low interest rates on borrowed funds means the private equity model is more accessible than ever. This facilitates new entrants to the market as well as encouraging those eager to use leverage to generate better returns.
In short, investors are recognising the significant opportunities currently presented by the private equity market and are excited by the potential for generous returns implied by the UK’s low prices and interest rates amidst its nascent post-pandemic economic revival. No doubt investors will take advantage of this buyers’ market sooner rather than later.
Private equity funds are sitting on hundreds of billions at the moment where Covid-19 market turmoil has muted them.
Now things are calming down , markets starting to stabilise and companies returning to business as normal expect to see a flurry of buy outs.
Tesco is well within range for a buy out.
Nope.
SP diving over last week and now sun 250p
Depends if the losing parties in auction/bidding war look at other supermarkets as alternate investments.
Also depends how attractive Tesco is for growth and assett striping.
Selling off exiting real estate and renting back would be a way of raising capital to pay off some of investment costs/borrowing to invest.
If it’s a private equity takeover then common ‘ listed shares will no longer exist.
So in this case I would expect whatever amount you have saved will be used to purchase shares at option price.
Eg.
If savings is £21,900 then 10,000 shares would be available to you at this price and then sold at takeover offer share price let’s say £5.00 per share.
The profit of £29,100 would then be declared to HMRC.
Brexit funded a new car for me (£30k).
I was being paid in CHF and when the £ tanked it was ‘win , win , win’.
During my life in CH I saw a range of 2.45CHF to the £ to a low of 1.20CHF to the £.
Been retired since I was 53 and also busy , busy , busy ….
I used to play the markets back in the 80’s , 90’s and stopped in 2005. Now I’m retired I have more time so back making the odd investment.
Started investing in Gold while living in Switzerland.
Like you I’m into Gold buying in at $1250 five years ago.
I also speculated with Barratts Developments buying in at 400p when they nosedived after Brexit vote and selling January 2020 for 850.60p when I figured that Covid-19 could only be bad news for market.
Then played with Sainsbury’s shares over 6 months and took a 15% profit and now into Tesco that’s showing 20% profit to date.
I think if a takeover does happen then it will be in next 12 months.
Tesco is starting looking a lot healthier and after Covid blips on trading (extra expenses and Booker downturn) is back on track for a good year.
There are a lot of private equity funds bulging with cash at the moment and I think we will see this pent up demand release in a series of buyouts over the next year.