Corporate advisers expect rise in M&A activity post-Budget
58 per cent of corporate advisers expect to see M&A activity ramp up following the Budget on 30 November.
According to a new survey of corporate advisers – carried out by ThinCats – a lack of clarity around the upcoming capital gains tax changes has created uncertainty for business owners.
However, following Chancellor Rachel Reeves’s debut Budget next month, the advisers have predicted a spike in deal activity.
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The survey also found that confidence among small- and medium-sized enterprises (SMEs) has ticked up. 62 per cent of advisers said they were seeing higher levels of activity in their pipelines in the last six months, an increase from 36 per cent a year ago. Only 12 per cent said that they had seen less demand.
Macroeconomic issues such as inflation were cited as the biggest constraints to deal activity, with valuation expectations and deal quality the next most significant challenges.
When asked about funding sources, the advisers said that non-bank lenders have been stepping in to meet the increased demand, with 30 per cent of participants reporting higher levels of credit appetite from SMEs.
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One-quarter (24 per cent) of advisers said that more funding is available from the high street banks than there was six months ago, compared to 33 per cent in the last survey.
“Advisers have their fingers on the pulse and they will see day-to-day how changes in the economy and regulation affect how businesses act,” said Mike Hackett, chief commercial officer at ThinCats.
“While it is positive to see that advisers are reporting growing appetite to lend and to borrow across the market, clearly there are concerns and activity afoot as business owners get ahead of any potential capital gains tax increases in the budget.
“Business owners will be watching the Budget closely.”
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