In a packed agenda, guests discussed the key drivers of deal activity in 2025 and whether pressure to deploy high levels of ‘dry powder’ is creating unique challenges for lower mid-market firms, and how this is likely to impact price negotiations.
Debate also focussed on whether lower interest rates and political stability will create a favourable climate to ‘get deals done’. Inevitably, panellists also discussed which sectors and deal structures will be hot in 2025.
Pete expressed his views as follows:
“I think there will be continued demand for high quality assets. Inevitably, a period of high interest and high inflation has impacted the growth rate of some businesses and restricted the number of viable investment opportunities coming to market. Our approach of targeting businesses that aren’t linked to the macro-economic cycle has meant we have continued to enjoy opportunities to deploy.
“Our investment criteria is unlikely to change and will remain disciplined. Although our approach isn’t sector focussed, there are clearly sectors of the economy that will benefit significantly from reduced interest rates and inflation. Construction, infrastructure and services to the built environment are likely to benefit, while technology, business and financial services will undoubtedly remain strong growth sectors.
“In terms of deal structuring, we do not see wholesale change in our core market. In the pure mid and large cap market, additional leverage may have an impact on pricing which may lead to an increase in deal volume.”