Torrent of interest rate hikes rain on private equity’s dealmaking parade

Charlie Conchie

PRIVATE equity dealmaking has cooled in the first six months of the year as rapid interest rate hikes and unsettled markets rained on the parade of a predicted deal frenzy, new figures have revealed.

The number of private equity deals in the UK fell to 689 from 909 last year, with just 327 deals worth £32bn done in the smaller mid-market, where transactions were expected to recover more sharply, according to the latest deal tracker from KPMG.

The figures show a slower than expected six months after a wave of deals had been predicted following a torrid year.

Rising interest rates in the UK have ramped up the cost of debt and made big takeovers harder to finance, while volatile markets have posed pricing challenges to prospective suitors.

“While there were high hopes of a return to stability as we entered 2023, it soon became clear that rising inflation and interest rates, together