After a turbulent macroeconomic environment in 2023 and a cautiously optimistic 2024, early 2025 has seen a return to stability in private equity (PE) M&A activity in the UK — but one characterized by selectivity, disciplined valuation scrutiny, and a shifting sectoral focus.

While dealmakers are cautiously navigating geopolitical tension, inflation uncertainty, and post-Brexit adjustments in the UK, activity across bolt-ons, buyouts, and exits reveals a market that remains active, albeit measured. At Artemis Origination, our conversations with business owners and institutional investors reinforce that dry powder remains plentiful — but deployment thresholds have risen, and investors are more sector- and strategy-specific than ever.

The Market Picture: Steady Hands, Fewer Exits

Private equity deal activity remains consistent in the 40–50 deals since the start of 2025 in the UK, with firms taking advantage of narrowing valuation gaps and greater asset availability. But exits remain few and far between, with most GPs continuing to hold until IPO and secondary markets improve. Meanwhile, bolt-on activity showed a temporary rise in March, only to fall back by April — a sign that borrowing conditions have improved, but geopolitical concerns (especially around tariffs)are keeping some buyers on the sidelines.

“Exits are low across the board. People are waiting — but they’re watching,” noted one buyer. “Dry powder isn’t the issue. It’s timing, confidence, and clarity.”

Across regions, UK buyers are proving more aggressive with non-UK bolt-ons — but also more exposed to volatility. By contrast, deals for UK-based targets are more predictable but less frequent.

Sector Spotlights: Where Capital isFlowing

1. Professional Services
Private equity continues to reshape the UK’s legal and accountancy landscape.With over £1.2B already invested in law firms and platforms like Affiniaemerging in accountancy, the playbook is clear: consolidate regional talent,unlock cross-sell, and modernize delivery (The Times).

2. IT Services
Still a cornerstone of deal activity, IT services now represent a third of all PE buyout value. Firms offering digital transformation, automation, and compliance solutions remain especially in demand (Grant Thornton).

3. Energy & SustainabilityConsulting
Although early 2025 shows reduced deal volume, momentum in energy transition assets continues. 72% of PE investors report increasing exposure to decarbonization, energy efficiency, and renewables — driven by long-term ESG strategy rather than short-term returns (KPMG).

Takeaways

• PE activity is stable but selective, favouring proven sectors and assets that align with thesis-led growth
• Exit markets remain tight, but bolt-ons and international interest are key levers for buyers
• ESG and energy themes are long-term plays — investors are still committed, but deals are getting smarter

At Artemis, we continue to see that off-market insights, sector fluency, and people-first diligence are what make the difference in today’s market. Buyers aren’t just buying a company — they’re buying clarity in a complex and shifting landscape.

This piece is part of our “M&A in the Knowledge Economy” series. To learn more about how Artemis helps buyers sharpen their theses and find smart targets, follow us on LinkedIn or explore our latest deal notes.

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