In the heart of London, over a standout meal at Bocca di Lupo, a handpicked group of private equity investors and alternative lenders gathered for a roundtable lunch that proved to be as insightful as it was oversubscribed. Attendees from firms that are actively funding and supporting businesses across sectors like healthcare, IT services, energy transition, and professional services – bringing a wealth of real-world deal experience to the table.
The conversation was candid, collaborative, and forward-looking. With Trump’s second term already sending ripples through global markets, the mood was one of cautious optimism. Despite macroeconomic headwinds, participants agreed that M&A – particularly in the lower mid-market – remains a powerful force in 2025. Here are the key takeaways from the discussion:
Market Momentum Is Rebuilding
There was a shared sense that deal activity is beginning to pick up again. Stabilising interest rates and gradually falling inflation are improving financing conditions. At the same time, pent-up demand from both strategic and private equity buyers is starting to be released. Crucially, buyer and seller expectations are becoming more aligned – helping to unlock transactions that had previously stalled.
Smarter, More Selective Deal-Making
Investors are becoming more discerning. There’s a clear preference for businesses with defensible market positions and recurring revenue models – particularly in IT managed services, tech-enabled platforms, and professional services. Healthcare, life sciences, and energy transition also emerged as sector hotspots. Due diligence is more rigorous than ever, with a sharper focus on ESG credentials, tech integration, and the achievability of current-year forecasts.
Buy-and-Build Still Dominates
The buy-and-build strategy remains a cornerstone of value creation, especially in fragmented markets. Business services, IT managed services, and healthcare continue to offer fertile ground for consolidation. Investors are looking for platforms with strong leadership and scalable infrastructure that can support bolt-on acquisitions.
Value Creation Starts Earlier
One of the most striking shifts is the timing of value creation planning. Increasingly, these plans are being developed pre-acquisition. Attendees discussed the importance of 100-day plans that focus on early wins, synergy measurement, and integration. Margin improvement, working capital optimisation, and leadership upgrades are also high on the agenda.
ESG Is Now Central
ESG is no longer a box-ticking exercise. It’s becoming a core part of investment theses and value enhancement strategies. Some alternative lenders are even offering interest rate discounts tied to ESG performance metrics – linking sustainability directly to financial outcomes. Carbon reduction, diversity, and governance improvements are being embedded into deal structures and incentive plans.
Exit Strategies Are Evolving
Finally, the group agreed on the importance of planning for exit from day one. Creative deal structures – such as deferred consideration and warranty & indemnity insurance –are helping bridge valuation gaps. Exit readiness is no longer a final-phase consideration but a continuous process that starts early and evolves throughout the investment lifecycle.
Looking Ahead
The roundtable sparked valuable conversations and connections that will continue well beyond the restaurant. It was a reminder of the strength and depth of the UK’s investment community – and the power of bringing the right people together in the right setting.
And remember, if you want to talk private equity or alternative lenders, whether that’s as a lender or a business looking for investment, get in touch.
