Private equity investment in the South West increased marginally last year to £6.2bn as a near 33% increase ahead of the Autumn Budget overcame a slow first half.
Deal volume in the region also remained stable, edging down slightly from 104 to 100 year-on-year, according to a survey by global accountancy firm KPMG. 
This was due 2024 being a year of two halves, it said, with suppressed numbers in the first six months followed by a strong recovery in the second half – with a surge in the run-up to the new Labour government’s first Budget contributing to an rise of 32.6%.
The survey shows investment in the South West accounted for 3.9% of total UK new private equity funding, putting the region fourth behind London (£78.1bn), the North West (£20bn), and the South East (£15.8bn).
KPMG UK head of corporate finance in the South West, John Levis, said the region’s strong PE activity was testament to the ambition of the region’s innovative businesses.
Speaking ahead of yesterday’s quarter point cut in interest rates to 4.5% by the Bank of England and its accompanying halving of its growth forecast to 0.75%, he added: “Generally, firms have started 2025 with much more clarity and confidence on the economic landscape ahead of them and the prospect of further cuts to interest rates that would serve to stimulate mergers and acquisitions.
“We’re looking forward to seeing South West businesses continue their growth journeys and attract further investment as a result.”
KPMG UK head of corporate finance Alex Hartley added: “There are encouraging signs from the 2024 data that deal activity may have bottomed out in the UK in 2023, as we saw activity, both in volume and value, pick up last year.
“In particular, we saw significant activity in the second half of the year as many business owners tried to get ahead of expected changes to Capital Gains Tax.”
Business services was the busiest sector for private equity deals last year, accounting for 43% of the total and up more than 10% on 2023’s figure.
However, it was TMT (technology, media and telecoms) that emerged as the hottest sector, with deal volumes up nearly 19% year-on-year and cumulative values nearly 58% ahead over the same period, capturing more than £40bn in the total national deal value.
While volumes were down in financial services and the energy sectors, the value of those deals was greater than their sum, said KPMG.
Financial services represented 11% of the total but 14.6% of the value, while energy represented 3% of deals, but 4.7% of the overall value, indicating, according to KPMG, that they were both punching above their weight.
Another sector undergoing a resurgence was consumer goods and retail, with volumes up 5.3% to 138 and values up 21% to £10.7bn, reflecting improving consumer confidence through the year.
KPMG’s PE activity report for 2024 followed its recent survey of venture capital (VC) investment in the South West between last October and December, which revealed more than £104.2m was raised by businesses in the region – up 82% on the previous three months.
Again the South West ranked fourth among the regions, trailing to London (£2.9bn), the South East (£637.8m) and the East of England (£480.5m) – the regions that encompass Oxford and Cambridge.
Twenty-eight VC transactions were completed in the South West during the quarter, up from 21 in the previous three months.
In total £73.9m was invested into a total of 13 companies, spanning logistics, aerospace, environmental services and automotive, in the region in the fourth quarter.
More than half that figure – £47.4m – was generated by investment into Huboo, the fast-growing Bristol-headquartered firm that provides order fulfilment services for e-commerce sellers.
