Brexit has yet to impact on investor appetite for the UK’s SMEs. The latest market barometer from Lyceum Capital and Cass Business School reveals that the UK had seen significant uplift in activity in the second quarter of the year, with 23 of 40 deals completed in the three months to June.
“During this period of uncertainty, I am most encouraged by the data and conclusions that our research has found,” said Andrew Aylwin, Partner at Lyceum Capital.
“Volumes in H2 are likely to be lower than initially expected as investors assess targets’ prospects in this ‘New Normal’. However, the UK lower mid-market is set to shine again as a beacon of attractive investment opportunities, with the deepest pool of entrepreneurs and the strongest tech and digital economy hub in Europe. Here at Lyceum, we believe the opportunity for disciplined investing to drive growth is clear.”
‘PE remains an attractive asset’
Scott Moeller, director of the M&A Research Centre at Cass Business School, added: “While it is still too early to predict the extent to which Brexit will affect the lower-mid market in the UK, we believe this portion of the industry is well placed to benefit from the new environment.
“Given the asset class’s strong performance and track record throughout the years, we believe that lower deal prices could also signal an increase in foreign investment, giving the industry even more scope and capability. UK private equity remains an attractive asset class that backs successful entrepreneurs who, like their investors, are resolute in the pursuit of their aims.”
‘Solid confidence among London business’
Meanwhile another survey revealed that confidence among London firms remains reasonably buoyant in the wake of the Brexit vote. New analysis by the CBI and CBRE shows that 41% of the 186 firms surveyed after the Referendum said that they planned to maintain their investment plans, with one in ten (9%) planning on actually increasing their plans. 16% said they will freeze investment plans, whilst a fifth (21%) think they will reduce them.
Lucy Haynes, CBI London director, commenting on the findings, said: “London remains firmly open for business, and the capital’s firms are well used to navigating choppy waters. Many appear to have taken the decision to leave the European Union within their stride.
“Whilst the initial shock from Brexit has dented some firms’ investment plans, it’s encouraging that over two-fifths intend to maintain them and half of businesses aim to continue to hire at this early stage.”