UK fundraising by privately owned professional services firms jumped 78% in 2021 from the previous year and the value of acquisitions more than tripled.
Private professional services businesses raised about £16.1bn last year, up from £9.1bn in 2020 and £9.5bn in 2019, according to analysis by investment bank Arden Partners (AIM:ARDN) PLC, while the average size of the individual fundraising also soared.
There were 403 acquisitions worth a combined £3bn last year, boosted by a strong final quarter, up 22% on pre-COVID 2019.
“The UK professional services market is seeing a heightened level of fundraising and M&A activity as the sector has demonstrated its resilience and high-quality earnings, whilst continuing to go through significant structural change,” said John Llewellyn-Lloyd, head of business and professional services at Arden.
“It is still a hugely fragmented market with traditional firms, who have previously under-invested in IT infrastructure, experiencing pressures to invest to support remote working, for example, alongside pressures from increased compliance costs and more stringent regulation.
“In this environment, firms need to invest to gain economies of scale and develop new strategies, which is why we are seeing such a high level of activity in the sector.”
Arden said it expects the sector to continue to be highly active in coming years.