Deal volumes remain stable while small-cap activity contracts and large-cap slows down hire
ECI Partners, a leading mid-market private equity firm, reports mid-market resilience amidst shifting trends across the private equity landscape in its latest quarterly report on buyouts across all industry sectors.
With 14 buyouts completed in the £150 – 300m range across the trailing 12 months (TTM) to Q1 2025, up from 13 in Q4 2024 and 12 in Q3 2024, the sector has remained consistent with its long-term average of 14 deals completed per quarter since 2021, reflecting stability in the market.
The large-cap end of the private equity market, over £300m, has seen a reduction in activity, with the number of completed buyouts in single digits, not helped by a clogged IPO market for exits. This has in turn caused larger funds to dip down into the mid-market, supporting continued activity. Meanwhile, smaller-cap buyouts – firms valued up to £150m – have dropped significantly, with only 26 transactions in Q1 2025 compared to 37 in Q4 2024 and 38 in Q3 2024.
Despite these broader challenges, ECI highlights the importance of flight to quality over quantity in private equity investments. High performing companies are commanding high valuations as investors seek out companies with robust management strategies and solid growth trajectories.
ECI completed five deals in the 12 months to the end of March 2025, outperforming mid-market private equity during this period.
Suzanne Pike, partner at ECI comments: “In a tougher macro climate, investors are prioritising quality over quantity – backing businesses with stability, fantastic leadership, and clear growth potential. Research from private market intelligence platform Gain.pro shows overall UK holding periods are now up to 5.3 years, a 10-year high, up from 4.1 years in 2020. The mid-market has proved stable in terms of dealflow but there are still many pent-up deals waiting for the right time to come to market.”
Co-founder and co-CEO at Gain.pro, Nicola Ebmeyer comments: “The UK mid-market continues to show remarkable resilience, even in a more selective deal environment. While overall deal volumes have softened, investor appetite remains strong for high-quality businesses with clear growth potential. At the same time, longer holding periods point to a growing focus on long-term value creation. In an increasingly competitive market, access to accurate, cleanly structured data isn’t just helpful, it’s a strategic advantage for investors looking to stay ahead.”
ECI’s focus on high-quality businesses with experienced management teams has been instrumental in maintaining momentum during market uncertainty. Notable examples within the ECI portfolio include: CMap, a software business with recurring revenue, whose professional services automation tools are critical to its customers’ operations and Avantia, a high growth specialist home insurance MGA, whose world class decisioning platform means it can deliver a better loss ratio and quote for more of the market than its competitors. Avantia delivered its seventh consecutive year of double-digit growth in 2024. These businesses, which offer predictable forecasts and high growth potential, are particularly attractive to investors during more uncertain times.