Mid-market private equity investment in London fell in the first half of this year, according to KPMG UK’s mid-year private equity pulse.
The mid-year study into private equity deal activity found that mid-market private equity interest in the region declined by 14% compared to H1 2024, with 168 deals completed.
The findings reflect a backdrop of economic uncertainty, influenced by ongoing geopolitical developments and concerns surrounding the potential impact of trade tariffs.
Bolt-ons remained the largest component of mid-market private equity activity across London, making up over half of all deals. Traditional and leveraged buyouts (LBOs) were the second largest deal type, followed by minority investments.
London’s mid-market private equity interest accounted for 45% of the total mid-market private equity backing in the UK. Deal activity in the mid-market slowed down across all regions in the UK, except the South West, which experienced increased activity in terms of deal volume, compared with the first half of 2024 (28 vs 22).
Helen Roxburgh, Partner and Head of KPMG’s London Region M&A team, said: “While there’s been a dip in mid-market private equity activity in London in the first half of this year, the capital is still leading the way – accounting for nearly half of deals completed across the UK.
“London’s deep pool of talent, access to global capital and concentration of high-growth businesses makes it a magnet for investors. As geopolitical uncertainties begin to stabilise, we’re confident that London will continue to lead the way for private equity in the UK.”
The national outlook
From a national perspective, last year’s rebound in all private equity investment stalled in the first half of 2025 as activity dipped to the lowest levels since the second half of 2020.
Deal volumes dropped 17% year on year, with a total of 726 deals closed throughout the first half of 2025 compared to 876 over the same period in 2024. The second quarter witnessed fewer deals compared to Q1 as geopolitical uncertainty put the brakes on activity across all private equity and the mid-market. Most deals took place in Q1 with 370, while Q2 saw only 356 deals close.
The slowdown in the mid-market was less pronounced with a total of 377 deals in the first half of the year, representing a fall of 11% year on year.
