The combined value of deals by mid-market private equity houses in the UK last year rose to £5.4 billion (€6.4 billion; $8.6 billion), according to a report produced by LDC in conjunction with Unquote.
There were 166 mid-market deals in the UK in total, a rise of 4.5 percent from 2010.
The services sector saw the most activity, with 45 deals, while dealflow in the industrials sector rallied by 70 percent from 2010. Technology, media and telecommunications companies proved attractive targets for investment as well, the report said.
The larger end of the mid-market suffered more keenly from the Eurozone crisis towards the end of the year, the report found. Over the whole year however, deals in this bracket (£50 million to £150 million) remained stable at 38. The 128 deals at the lower end drove overall growth in the mid-market, accounting for £2.4 billion of the total, a rise of 22 percent from the previous year.
Darryl Eales, chief executive of LDC, observed: “Overall the rising tide of optimism and UK mid-market deal flow in the first half of last year ebbed away in the second six months of 2011 as economic conditions worsened, but both in value and volume the totals were encouragingly still marginally higher than the previous year, driven by the smaller end of the market where weak lending conditions were not such an issue and where vendor pricing had also adjusted to more reflect realistic levels.
“For 2012 the outlook remains uncertain with commerce dominated by the Eurozone crisis and the need for greater business confidence. Positive developments on both would be very beneficial,” he said.