Private equity investment into the South West’s mid-market businesses bucked the national trend in the first half of this year with a 27% increase.
The South West’s performance was in marked contrast to the rest of the UK, with every other region experiencing a slowdown in deal activity.
According to KPMG UK’s mid-year private equity pulse, 28 deals were completed in the South West, a 27% increase compared to the equivalent period last year.
The findings come despite 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 the South West, making up more than half of all deals.
Minority investments were the second largest deal type, followed by traditional and leveraged buyouts (LBOs).
The South West’s mid-market private equity interest accounted for more than 7% of the total mid-market private equity backing in the UK.
John Levis, head of corporate finance in the South West at KPMG UK, said it was heartening to see the South West bucking the UK-wide trend of falling private equity values.
“We’re hoping that the region is buoyed by these stand-out stats, achieved against ongoing challenges in the UK market, and continues to attract significant private equity interest over the next six months,” he added.
“We know that the South West boasts a strong reputation for technology, media and telecommunications businesses, so many should be able to capitalise on the boom in this sector and achieve further investment.”
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 the first as geopolitical uncertainty put the brakes on activity across all private equity and the mid-market.
Most deals took place in the first three months of the year with 370, while only 356 deals closed in the second quarter.
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.
Alex Hartley, head of corporate finance at KPMG UK, said: “As we headed into 2025 off the back of strong deal numbers last year, the expectation was that M&A activity would continue to pick up.
“But economic uncertainty, driven by geopolitical events and nervousness around the impact of tariffs, has meant that the deals market has been slightly more volatile so far this year, and getting deals over the line is taking longer.
“That said, the mood remains cautiously optimistic, and there are still sectors where appetite remains strong, such as business services, healthcare and technology, media and telecoms.
“We may start to see activity pick up over the rest of the year, as business owners contemplate potential tax changes in the Autumn budget and they have had time to assess any impact from global tariffs.”