Investment in US private equity in the UK is up 53%, while Chinese take £ 515 m

... Credit : @pixabay
Shadrach   in Finance & Money

17 February 2020, 05:44 GMT

Overseas investors faced undervalued businesses in the midst of political uncertainty, law firm Mayer Brown says.

The volume of investments by US private equity funds by UK companies rose last year by 53 per cent to £ 14.2 billion, a study suggested.

Compared with others in Europe, UK firms ' relatively depressed valuations have made them look good value for US-based buyers, law firm Mayer Brown said.

Last year, acquisitions by Chinese private equity funds reached £ 515 million, up from the previous year's "negligible" value, it has been stated.

Brexit and pre-election uncertainty meant UK shares experienced a significant period of underperformance after August 2019 compared to the listed European companies, the report said.

Over the past year, the FTSE 100 has risen by 4 percent, while the FT EuroFirst 300 Index has risen by 15 percent, according to research from the law firm.

Mayer Brown said the period of depressed valuations relative to European businesses could continue as negotiations rumble over the UK trade deal with the EU on.

Mayer Brown's Perry Yam said:

There are still plenty of opportunities to buy private equity funds in the UK. Clearing political uncertainty in 2019 can encourage EU trade buyers to return to the UK.