While 2025 saw overall global deal values up, in the UK deal volumes in the first half of the year were down 19% according to PwC. This continued into the second half of the year with ongoing geo-political and economic uncertainty and a UK Budget in late November.

The impact of increased costs, particularly employment, raw material and energy costs making accurate forecasting, and hence closing transactions, even more difficult than usual.

Deal flow incoming

Despite this, David Petrie, Head of Corporate Finance at ICAEW believes there are clear signs of deal flow coming through.

“I think 2026 is going to be a busier year and probably better than 2025 for public company deals, M&A and private equity investment,” says Petrie.

“There were signs of an uptick in public company activity towards the end of 2025, and we’re also seeing continuing investment from private equity houses seeking to deploy the large supply of capital they’ve been sitting on, in some cases for years. The macroeconomic backdrop could certainly be better, but things are beginning to look more encouraging.”

Window closing for PE investment in accountancy

According to Petrie, private equity (PE) investment in accountancy firms, is not a new phenomenon but started some time ago, with the first deals that really attracted attention being back in 2016 when John Connolly, the former UK senior partner at Deloitte, co-founded Cogital Group, later rebranded as Azets with funding from Hg Capital. 

Accountancy and audit firms are seen by investors as low risk compared with other professional services or consulting businesses and typically have stable, recurring revenue. So, although the PE investment trend in the sector is likely to continue through 2026, Petrie warns the “window will close” at some point, with the supply of mid-market firms that are haven’t yet done a deal starting to dry up, and some remaining partner groups being steadfastly opposed to external investment and control.

He says: “We’re at a particular point in the market at the moment and it will be very interesting to see how it evolves over the next 12 to 18 months.”

Strengthening London’s IPO market

One area of significant focus for 2026 and beyond is around increasing the number of IPOs on the London Stock Exchange.

Historically, the City of London has been one of the world’s leading financial hubs, but in recent years, its dominance has weakened, due in part to Brexit and poor investor appetite.

As Petrie explains, there’s a strong desire to try and address some of the difficulties in the market and increase the flow of new businesses onto the London Stock Exchange.

“Certainly, potential new public companies are at the forefront of policymakers and regulators minds,” he says. But increased demand for UK equities is at the top of his shopping list.

“Measures focussed on adjusting the listing rules, or on retail investors are only going to scratch the surface,” Petrie says. “It’s getting the institutions back into UK equities that’s really important”.

He believes that stronger market sentiment for UK-listed companies, often including those operating in global markets (as evidenced by the FTSE touching the 10,000 mark at year end), alongside changes to UK pension scheme investment rules, are a key part of the answer.

AI overhauls deals and investment

So what changes are ICAEW members in advisory likely to face next year? Unsurprisingly, artificial intelligence (AI) is number one.

In Petrie’s view, accountants and investors are already changing the way they operate. For example, large language models, both off-the-shelf and proprietary are significant speeding up and changing the nature of analysis and report writing in so many aspects of the deals market.

This creates opportunities, but also requires different review skills from experienced people to ensure accuracy, manage risk and facilitate sound decision-making. 

Regulatory change inevitable - but will it work?

There will also be considerable regulatory change, which financial professionals will need to get to grips with. For example, Public Offers and Admissions to Trading Regulations 2024  (POATRs) which replaces the old EU Prospectus Regulation is a new framework for trading on public markets such as the London Stock Exchange, and comes into effect in January 2026.

Also, Basel 3.1, a global regulatory framework for banks to enhance resilience of the global finance system, comes into force in 2026.

So overall, while economic growth may remain muted for 2026, Petrie expects to see continued investment and deal flow, as well as a raft of regulatory reforms. As always, the world of deals and corporate finance is far from standing still.