Investec PE mid-year update reveals that deal-making continues

Investec Bank plc (Investec), a leading international financial services provider, today announces findings from its mid-year Private Equity (PE) roundtable, held just over six months after its 14th PE Trends 2025 report, an annual in-depth survey of over 250 PE professionals. This roundtable aimed to take the temperature of the mid-market with key industry players and shows a significant shift in sentiment since the start of the year.

While Investec’s 2025 report revealed that nearly 80% of private equity managers believed that deal valuations would pick up in 2025, the mid-year perspective is more subdued. GP attendees at Investec’s roundtable cautioned that, while high-quality companies continue to command solid valuations, weaker names may struggle to attract bids.

The discussions highlighted that a general increase in market volatility has led to lengthening exit processes as both buyers and lenders want to complete more in-depth analysis. However, there were signs of positivity in the market, with reducing interest rates and an increased number of lenders entering the market.

Kate Gribbon, Head of Financial Sponsor Coverage at Investec, stated: “The market remains very much open, particularly in the services and technology sectors, but levels of caution have increased, with buyers taking time over their due diligence work, resulting in longer processes. Previous relationships with management of the target company are particularly valuable as they give investors comfort in the narrative of the equity story. UK investors are seeing increasing competition from hungry US PE houses. These houses are looking to Europe to find stronger relative value in their targets as they seek to diversify away from their home market. While increasing market volatility has led to a greater focus among lenders on debt servicing costs, we’re seeing a more conservative approach to leverage multiples which is likely to carry through to the end of the year.”

However, while caution among investors has increased, there remains significant liquidity available to fund deals, which has conversely driven competition for the best deals.

Helen Lucas, Co-Head of UK Origination, Direct Lending at Investec, commented: “The dry powder in the industry means that there’s ample liquidity available to finance the best deals, driving stiff competition among private credit funds and banks, which is actually improving deal terms for the best assets. However, relationships are now more important than ever with GPs wanting to work with tried and tested lenders they know they can work with throughout the investment cycle.”

Investec’s PE Trends survey showed strong ongoing momentum for both single-asset and multi-asset continuation fund deals as exit routes. However, the mid-year event argued that landing a CV deal will typically require the GP to include a trophy asset or assets in the vehicle.

Stefano Manna, Head of GP Advisory at Investec, added: “Private equity firms are increasingly turning to innovative solutions such as continuation funds (CVs) to provide liquidity to investors. The market has matured, and CVs have moved into the mainstream, with the vast majority of GPs now well-versed in how the CV structure works and are supportive of it. CV deals need to show an alignment of interest between GPs, existing LPs, and incoming investors, and we’re seeing an increased requirement for GPs to increase their commitment to show they’re aligned with investors.”

For further insights on the Investec Private Equity Trends 2025 Report and the mid-year roundtable findings, please visit Investec’s website or contact the Investec Specialist Fund Finance team.