The buyout market has enjoyed huge success in 2005 and is expected to reach a five-year high of £23 billion, 12 per cent ahead of 2004.
That is the outcome of prel iminary figures from CMBOR, founded by Barclays Private Equity and Deloitte, which analyses the sector.
Phil Griesbach, Birmingham-based director of Barclays Private Equity, said 2005 was set to be the best year for the buy-out market since the heady days of 2000.
"However, the shape of the market has changed dramatically over that period," he noted.
"The best hunting ground for private equity firms now, is either buying from competitors or from the stock market. Secondary buy-outs and take privates now account for over 70 per cent of the market value.
"By way of contrast, the value of traditional primary buy-outs from UK corporates has declined dramatically over the last five years. They used to account for over 50 per cent of the market but this has fallen away to 13 per cent."
Nick Johnson, corporate finance partner at the Birmingham office of Deloitte, commented: "The key trend this year has been the growth of the mega-deal - over £250 million - with a record 21 deals worth nearly £13 billion, more than 60 per cent of the market and up 28 per cent on last year.
"Conversely, the mid-market - £10-250 million - has actually fallen by 23 per cent this year from £9.6 billion to £7.4 billion. With the incredible firepower available to private equity houses, we can expect to see average deal sizes continuing to grow in 2006."
Total market value for the year to date is £20.9 billion, however further mega deals announced such as Somerfield at £1,082 million and Peacock at £404 million are expected to push the total over the £23 billion mark.
Healthcare has been the big success story of 2005, trebling 2004's figures to produce £4.5 billion.
The exit market is healthy with a new record value set in 2005 with £20.1 billion recorded.
Fund raising has also reached a new high with £18.5 billion raised.
CMBOR is based at Nottingham University Business School.