Confidence among UK dealmakers1 is surging, according to the latest findings from CIL’s Investment 360 Index.
Almost half (48%) of respondents are now positive about the UK’s short-term economic outlook, a dramatic improvement from 19% in 2024. In contrast, only 15% of respondents hold a negative view this year, with 34% remaining neutral.
The Investment 360 Index is based on research with 138 UK market stakeholders, including private equity investors, management teams, corporate finance providers, and business advisors. It has been run by CIL, an independent international management consultancy, since 2017. Now in its eighth year, the survey provides a comprehensive view of investor sentiment and market conditions.
This year’s findings present a very different picture to 2023, when nearly half of respondents (48%) were negative about the short-term economic outlook. Long-term sentiment is also optimistic, with 59% of respondents expressing positive sentiment about the UK’s economic climate over the next five to ten years.
M&A activity is showing signs of recovery. The Index suggests that having hit its lowest point last year, there has been an improvement, with 28% citing high or average current deal activity, compared to just 15% last year.
The outlook is even brighter for the next 12 months, with 76% expecting an increase in M&A activity and 18% anticipating stable levels. This points to cautious optimism in the business and investment communities.
Asset quality also continues to improve slowly, with 24% of respondents describing the current quality of assets as excellent, good or average compared to 19% last year. However, the research points to more significant improvement over the next 12 months, with 55% expecting an increase in quality, compared to 48% last year and just 20% in 2022.
Commenting on the findings of the Investment 360 Index, Alex Marshall, Senior Partner at CIL, said: “The Investment 360 Index has recorded its highest level of positive sentiment toward the UK’s short-term economic outlook since the post-COVID M&A surge in 2021.
Key drivers behind this optimism include easing interest rates and the stability expected from a new Labour Government. However, we can expect to feel some pain before the recovery as higher taxes risk choking consumer and business confidence.
“We are also seeing signs of improvement in M&A activity and asset quality, so we can be cautiously optimistic. While we won’t see an immediate acceleration in the deal environment, the improvements are encouraging, and we expect a gradual upward trajectory.”
The research was conducted with 138 UK market stakeholders, including private equity investors, management teams, corporate finance providers and business advisors, during August and September 2024.
Instructively, founded in 1986, CIL provides strategy consulting, value creation and due diligence support to management teams and investors. As a dedicated growth strategy firm, we are big enough to display extensive knowledge in a range of niche sectors and small enough to know that strong client relationships generate deeper insights.
