PitchBook News - A year of change in the UK

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The Research Pitch

September 7, 2024

Presented by RSM

August performance: US markets whipsawed last month before recovering in anticipation of Fed rate cuts. Our new Global Markets Snapshot breaks down returns data across a range of sectors and indexes. Read it here.

Crypto funds: After a wild ride, crypto VC fundraising is showing signs of life, buoyed by emerging managers and midsized funds. So, where is capital being allocated? What's the outlook going forward? Read our research.

Foodtech innovation: Overall VC funding in foodtech declined in Q2, but opportunities are emerging in shoppable recipes and the development of alternative proteins. Download a preview of our Foodtech Report.

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How AI is playing a lead role in private equity value creation

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Predictive analytics for market trends. Automated financial reporting. AI-powered customer insights. These are just a few examples of how AI-powered solutions can help investors drive operational efficiencies, sharpen decision making and unlock growth opportunities.

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A pivotal moment for the UK's standing in European private markets

Macroeconomics and politics have taken center stage in UK private markets this year.

The first half of 2024 has provided significant changes for the nation, namely the introduction of a new government regime. This brings with it potential changes to the capital gains tax, the removal of previously outlined AI funding, and the launch of a £7.3 billion investment in clean technologies via a new National Wealth Fund.

More broadly, UK macroeconomic data points indicate a more constructive picture, with GDP continuing to grow QoQ and inflation at the BoE's 2% target. Since then, we have also had the first rate cut from the central bank, which should continue to be supportive of private market valuations through the second half of the year.

The resulting impact on private market activity already seems to be having an effect, with both VC and PE deal value in H1 pacing above last year.

AI and fintech verticals continue to be supportive of deal flow, with the UK proving to be the largest hub for AI companies in Europe, ahead of France.

We continue to see a strong flow of take-privates in the UK.

Lower rates are also favoring LBO deals in PE, with discounted valuations in the region fueling a significant amount of take-private activity. The latter has supported public equity valuations, too.

It is therefore difficult to disentangle how much of the rally is buoyed by take-private activity versus fundamentals. A step change to the latter will be needed for listings activity to improve, with exits remaining the weakest area for the region across VC and PE markets.

Given it is the largest ecosystem in Europe, the UK will continue to prove a barometer for wider European activity. However, the fostering of fast-growing ecosystems, such as AI, will be critical for maintaining its leadership, where other regions such as France are catching up—doubling its share of European AI deal value in H1.

In a market that is becoming more specialized by strategy, we expect managers that can capitalize on nascent, structurally growing technologies, such as AI and cleantech, will be well-placed longer-term.

For more data and analysis into UK public and private market trends, download our free research:

UK Private Capital Breakdown

UK Market Snapshot

Best,

Navina Rajan
Senior Analyst, EMEA Private Capital

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Industry & Tech Research

Insurtech Report

VC dealmaking in insurtech rose to $1.2 billion across 106 deals in Q2—quarterly increases of 27% and 4%, respectively—but PE and M&A activity was still slow.

Our innovation spotlight focuses on how blockchain tech startups are helping address issues of fraud prevention, risk management, and more.

Read a free preview

Webinars & Events

Come see us in Europe this upcoming week!

Sept. 9-11: We'd love to meet you at IPEM in Paris, an event for PE dealmakers that will feature 6,000 attendees representing 2,000+ firms. We're also sponsoring the conference's Private Debt Summit. More details here.

Sept. 12: Join us at the BVCA Summit in London and visit our LP Lounge for exclusive content. Our head of private market research will discuss LP-GP dynamics and the future of fundraising with ILPA CEO Jennifer Choi. LPs can register here; GPs and others can request to register.

Sept. 17: Our Tech Talks series continues with HydroX AI founder Zhuo Li on security, privacy, and copyright issues related to large language models. Register here.

Sept. 25: We invite you to join PitchBook, J.Thelander Consulting, and Wilson Sonsini for a live discussion of compensation trends at VC and PE firms worldwide. We'll also be taking questions from our viewers. Register here.

In the News

Our insights and data featured in the press:

The insurtech sector is still attracting investment, albeit pulled-back and with asterisks. [Fortune]

In 2024, investors have pumped $26.8 billion into 498 generative AI deals, including from strategic investors. [CNBC]

The price-expectation gap between buyers and sellers has slammed PE exit activity. [WSJ]

The most active investors in climate tech. [Axios Pro]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

More of our recent research (* - report preview):

Market updates

Thematic research

Exit Alternatives for US VC
VC Returns by Series: Part IV
Micro-Mass Transit
Farm Management Software Market Overview
The Rise of European Megafunds: Part II

Industry & tech research

Coming next week (subject to change)

Global Private Market Fundraising Report
US PE Lending League Tables
MENA Private Capital Breakdown
Netherlands Market Snapshot
Healthcare IT Report*
Mobility Tech Report*
Emerging Space Brief: Digital Identity Wallets
Assessing the health of India's unicorns

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PitchBook News - A year of change in the UK

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