The 2006 UK private equity market has beaten all previous highs, reaching #25 billion, according to an end of year buyout data round-up released by CMBOR.
The Nottingham-based provider of analysis on the European private equity market founded by Barclays Private Equity and Deloitte noted a shift back towards primary deals in 2006, particularly at the top end of the market.
Value share of public to private and secondary MBOs fell from 66.8 per cent to 52.1 per cent, whilst combined value of family and divestment deals increased from 30.3 per cent to 46.8 per cent.
Record exit figures of #24.4 billion were achieved, up from #21.9 billion in 2005.
Leisure dominated the market in 2005 and continued to do so in 2006 hitting the #5 billion mark.
Nick Johnson, corporate finance partner at the Birmingham office of Deloitte, said: "Last year's Christmas hangover lasted well into 2006, with first half deal levels looking less than healthy at around #10 billion.
"Coming into the summer, we saw a new energy in the market as figures more than made up for the sluggish start to the year bumping up 50 per cent to #15 billion for the second half.
"In the highly competitive mid-market range between #100 million #500 million, total deal value increased by 30 per cent to #10 billion compared with #7.5 billion in 2005. As a result, average deal size (over #10 million) went up by nine per cent this year hitting #134 million."
Phil Griesbach, director of Barclays Private Equity in Birmingham, said that overall, there had been a better shape to the market in 2006 with the figures made up by a strong mid-market rather than a small number of deals at the top end.
With the drop off in the big deal figures, there had also been a slump in public to privates - from #7.2 billion last year to #5.1 billion this year - reflecting a strong year for the stock market overall and corporate M&A.
"The decline of UK public-to-privates in 2006 is in sharp contrast to the experience in the US where public-to-private activity in 2006 has already exceeded 2003, 2004, and 2005 combined.
"The largest deal in the UK in 2006 was the buy-out of United Biscuits for #1.6 billion which is puny compared with the gargantuan deals being done in the US and also starting to emerge in Europe.
"In the meantime it looks like most of the money raised this year will be heading to Europe. Just five years ago Continental Europe was the same size as the UK market; two years ago it was double and now, in 2006, it is treble the size."