Optimism grows among UK dealmakers
Confidence among UK dealmakers is surging, according to management consultancy CIL’s Investment 360 Index.
Almost half (48 per cent) of respondents reported they were positive about the UK’s short-term economic outlook, marking a dramatic improvement from just 19 per cent in 2024.
In contrast, only 15 per cent of respondents hold a negative view this year, with 34 per cent remaining neutral.
The Investment 360 Index, which is in its eighth year, is based on research with 138 UK market stakeholders, including private equity investors, management teams, corporate finance providers and business advisors.
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This year’s findings present a very different picture to 2023, when nearly half of respondents (48 per cent) were negative about the short-term economic outlook.
Long term sentiment is also optimistic, with 59 per cent of respondents expressing positive sentiment in the UK’s economic climate over the next five to ten years.
The Index suggests that having hit its lowest point last year, there has been an improvement in M&A activity, with 28 per cent citing high or average current deal activity, compared to just 15 per cent last year.
The outlook is even brighter for the next 12 months, with 76 per cent expecting an increase in M&A activity and 18 per cent anticipating stable levels.
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The survey also found that 24 per cent of respondents described the current quality of assets as excellent, good or average compared to 19 per cent last year.
However, 55 per cent expect an increase in quality, compared to 48 per cent last year and just 20 per cent in 2022.
“The Investment 360 Index has recorded its highest level of positive sentiment toward the UK’s short-term economic outlook since the post-covid M&A surge in 2021,” said CIL senior partner Alex Marshall said. “Key drivers behind this optimism include easing interest rates and the stability expected from a new Labour government. However, we can expect to feel some pain before the recovery as higher taxes risk choking consumer and business confidence.
“We are also seeing signs of improvement in M&A activity and asset quality, so we can be cautiously optimistic. While we won’t see an immediate acceleration in the deal environment, the improvements are encouraging, and we expect a gradual upward trajectory.”
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