Welcome to 2026. But first the year in review. Last year M&A with any UK involvement was 20% up on 2024, with $367bn (£273bn) of deals completed during 2025 (according to LSEG). That’s the positive from the stats. The negative from the data for 2025 was that the volume of deals delivering that value was 16% down on 2024.
Mid-market volumes were down, so one wish for 2026 is for that segment of the transactions market – where our members are focused – to pick up. Feedback from our faculty board meetings suggests that deals, for a plethora of reasons, are taking longer. This has been the environment for some time now.
More, please
The economics that underpin M&A remain positive. Share prices on public markets are high, and private equity still has an abundance of dry powder to deploy. Carve-outs, the subject of a faculty guideline to be published later this year, should be a rich source of deal activity for members over the next 12 months – often as a result of big deals. Successful businesses focus on strategy and acquisitions, which is a significant work stream for advisory teams. And a focus on core activities means disposals.
In 2025, private equity-backed M&A involving UK targets in 2025 totalled $64bn – 20% up on 2024. Private equity still has enormous amounts of capital to deploy, so the funding is there for firms to continue their successful buy-and-build strategies. An increasing amount has gone into continuation funds. Mid-market firms are now using them extensively and I do not see that trend stopping any time soon.
There’s no question that a significant number of private equity exits have been deferred. Private equity houses’ valuations of their portfolio investments have been a key driver in that. As always, competitive tension will eventually resolve those situations in favour of vendors.
The government’s £725bn strategy for infrastructure is an enormous amount of capital to be deployed – and advised on
Tech, financial services, healthcare and those linked to energy infrastructure have been the hot sectors. Those sectors will continue to thrive, as will private equity investment in accountancy and advisory firms (many of whom are members of your faculty).
We have seen something of an improvement in the performance of UK public markets – with, perhaps, the emphasis on ‘something’. There will be welcome reforms to listing documents this year; the faculty is representing members’ views on those changes. The value of high-quality independent advice on capital markets transactions will always be crucial, which is why the faculty continues to highlight the value of that to the FCA.
But tweaks to regulation alone will not stimulate activity to any significant extent. Bringing the right companies to market – those with the fundamentals that are required – will drive success.
Rebuilding UK plc
Another welcome development last year was the 10-year strategy for UK infrastructure and the wider market. The launch of the government’s plan in June 2025 might have been overshadowed by geopolitical events, but £725bn is an enormous amount of capital expenditure to be deployed – and advised on. Seeing progress from strategy to execution is key.
In the faculty’s “pipeline” for 2026, as well as the aforementioned guideline on carve-outs, is a guideline on public-to-private deals. We’ll also be working on a new edition of Private Equity Demystified, for publication in 2027.
Katerina Joannou and the technical committee will be coordinating ICAEW responses to the Treasury, the Takeover Panel, the FCA and other bodies on subjects that will impact how corporate finance services and deals are done in the UK.
A full programme of events will keep members up to date with market performance and market practice. And, of course, our work on AI in corporate finance and investment will again feature prominently in our output.
I’d like to wish all our members the very best for a safe – but not entirely risk-free, of course – and successful 2026.
David Petrie is ICAEW head of corporate finance