Private equity investment in the UK has plummeted to its lowest level in over five years, with continued economic and geopolitical uncertainty leaving vendors wary of putting assets up for sale.

A study of UK transactions involving private equity investors during the first half of the year showed that both deal volumes and deal value have fallen below 2014 levels.

The research, published by auditor KPMG, revealed that 384 deals were completed between January and June 2019, with a combined value of £28.5bn. This compares to 483 completed deals totalling £31.5bn during the first half of 2014.

The figures recorded this year also represented a significant decline compared to the same period in 2018, with deal volumes down 35 per cent from 594 to 483, and deal values dropping 40 per cent to £31.5bn from £47bn.

Furthermore, the number of first-half deals involving private equity in the UK’s middle market fell significantly, from 273 in 2018 to 199 in H1 of 2019. However, the total value of these deals increased, with £18.4bn invested in H1 2019 compared with £17.69bn in H1, bucking downward trends seen elsewhere in the market.

Commenting on the data, KPMG head of mergers and acquisitions Jonathan Boyers said: “Investors are currently eschewing those higher-risk transactions that they may have been willing to undertake a couple of years ago.”

He highlighted that uncertainty over Brexit is continuing to shape both investor and vender behaviour.

“However, once the Brexit conundrum is resolved, we may see a flurry of asset sales, investment activity and deal making as both sellers and buyers look to make up ground following this lengthy period of uncertainty,” Boyers concluded.

Despite the fall in transaction volumes, Boyers highlighted that private equity investors "remain incredibly hungry to invest".

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