Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The UK private equity market finished Q4 2025 strong with a total deal value of £49 billion, showing significant year-over-year growth [9] - Venture capital deal value remained resilient at £5.3 billion in Q4 2025, despite a sequential decrease [11] - The public equity market in the UK saw a strong recovery with a year-to-date return of 25.8% and a price/earnings ratio of 19.4x [14] Market Overview - The UK private equity market experienced a robust end to 2025, with macroeconomic growth forecasted at 1.2% to 1.5% and inflation averaging above 3% [8] - The Bank of England cut rates to 3.75% by year-end to support demand amid rising unemployment and deteriorating consumer sentiment [8] - Private equity fundraising in the UK declined to £32.6 billion, with a notable concentration in the first half of the year [10] Private Equity Activity - Q4 2025 saw three megadeals (over £5 billion) contributing to the private equity activity, with notable participation from US investors decreasing to 45.2% of deal value [9][10] - Exit value for private equity was robust at £27 billion, significantly influenced by the Verisure IPO [10] - The largest private equity deals included Convex Insurance, Barchester Healthcare, and Utmost Life & Pensions [65] Venture Capital Activity - The largest venture capital deal in Q4 2025 was Revolut's €2.6 billion round, marking it as the largest deal in Europe for the year [11] - VC fundraising mirrored the depressed trends seen across Europe, with only £2.1 billion raised across fewer funds [12] - The IT sector gained a significant share of VC deal value, while other sectors like energy and finance saw declines [11] Regional Insights - Manchester emerged as a top three city for private market activity, indicating a shift in regional hubs within the UK [13] - London remains the leading city for both VC and PE deal values, but other cities like Cambridge and Manchester are gaining traction [18] Public Equity Market - The UK public markets outperformed major global indexes, with over 15 listings in Q4 2025, including significant IPOs like Verisure [14] - The recovery in public equity markets is seen as a turning point, with both non-backed and privately backed listings experiencing a revival [14] Corporate Acquisition Activity - Corporate acquisitions in the UK totaled £28 billion, with B2C and B2B sectors gaining share [15] - The UK median acquisition value stands at £12.7 million, significantly lower than Germany's £37.3 million [15]