Growing private equity appetite signals rebound for professional and business services
Private equity (PE) deal activity dropped off in Q1 2025, as businesses frontloaded deals ahead of Autumn Budget tax changes and as global economic uncertainty took hold, according to analysis of PitchBook data by leading audit, tax and consulting firm RSM UK.
UK PE buyouts rose 3% from 317 in Q1 2025 to 327 in Q2 2025, but were down 16% from 391 in the same quarter last year. After dipping across all industries in Q1 2025 (down 32%), the technology and media industry appears to be the first to bounce back, with PE buyouts up 34% from 56 to 75 in Q2 2025. However, professional and business services saw another quarter-on-quarter fall (4.8%).
Hywel Pegler, Head of Professional and Business Services at RSM UK, said: “Following a tail off in deal volume for professional and business services in Q1 2025, the slight downward trend in deal activity has surprisingly continued into Q2. We do however expect to see a rebalancing of deal activity to more normal levels moving into Q3 and beyond, as we know there’s currently appetite in the market. Investors are looking for secondary/bolt on investment opportunities, due to demand for legal, accounting and consulting services regardless of economic uncertainty and seasonal lulls.
“The spike in technology and media buyouts reflects what we’re seeing in the market and presents further opportunities for professional and business services firms to scale up and create new revenue streams. We know that consolidation is taking place in the sector already, with the intent of creating innovative products and more integrated and holistic solutions. The government is also laser focused on increasing tech adoption and AI integration in the sector, with plans to expand the Made Smarter scheme, and introduce new professional and business services hubs in Greater Manchester, Liverpool City Region and West Yorkshire.”
He added: “Despite the challenges, there’s a key opportunity for professional and business services firms to modernise, scale and reverse the recent downward trend in buyout activity, which will help to drive the UK government’s ambition to double business investment to £65bn.”