- Fundraisings in 2021 were up 78% on 2020 and 70% on 2019, according to new analysis from Arden Partners

- The value of acquisitions amongst privately-owned professional services businesses more than tripled last year, driven by Q4, which was the first £1bn+ quarterly period since pre-pandemic

- External capital increasing vs partner capital

- Multidisciplinary and consultancy models are becoming more prevalent

London - Private UK fundraising within the professional services sector recorded a significant increase in 2021, 78% higher than in 2020 and 70% higher than in 2019, according to new findings.

Analysis1 by Arden Partners plc ('Arden), the small and mid-cap investment bank, also reveals that the value of acquisitions amongst private businesses in the sector more than tripled in 2021, with 403 acquisitions worth a combined £3 billion. This collective value is 22% higher than pre-pandemic figures in 2019.

The growth in acquisition activity was driven by a strong final quarter, where acquisitions reached more than £1bn for the first time since before the pandemic, totalling £1.36bn in Q4 2021. The previous £1bn+ quarter was in Q4 2019 when deals collectively worth £1.2bn took place.

Acquisition activity by volume of deals was also well ahead of previous years, with 403 recorded across the year at an average size of £7.4m. This volume is 54% higher than 2020 (261 deals) and 36% higher than 2019 (296).

Last year saw £16.1bn worth of external capital flowing into private professional services businesses through fundraisings compared to just £9.1bn in 2020 and £9.5bn in 2019. The average size of an individual fundraise increased significantly last year, at an average of £4.9m, compared to just under £3m in 2020 and 2019.

John Llewellyn-Lloyd, Head of Business and Professional Services at Arden, explained: "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. 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.

"We fully expect the sector to remain highly active in the coming years, with firms seeking private external capital and also increasingly turning to the public equity markets as they see the value in having a tap of external capital they can turn on to invest."

-ENDS-

Media contacts:

SEC Newgate UK

Ian Morris, Clotilde Gros, George Esmond

arden@secnewgate.co.uk

Notes to editors

1 Arden analysis of data from Beauhurst, a data platform that tracks the UK's high-growth companies.

About Arden Partners plc

Arden is a dedicated corporate adviser and multi-service stockbroker to small and mid-cap companies in the UK and their investors.

The absolute core of our business is the effective management of the needs of our significant and growing base of corporate clients, and the effective support of their relationships with existing and potential shareholders. These relationships are enhanced by the quality of our corporate finance advice and industry research, and the strong market presence of our sales and trading teams.

Our corporate finance capabilities encompass M&A, corporate finance advisory, broking and Sponsor and NOMAD services. We represent our clients in private transactions and AIM and Main Market share issues.Our research is designed to be sector-focused, concentrating on top-down thematic trends which highlight companies giving investors exposure to the real growth areas of the small-cap and AIM markets.

It is the job of the sales team to keep institutions abreast of these themes and stock ideas. When there is a requirement for our corporate clients to raise money to fulfil their growth ambitions, the sales team is in a strong position to effect this, with its entrenched relationships with the UK institutional and non-institutional markets. Our market-making and trading teams provide liquidity in the shares of our corporate clients. We also trade the shares of non-client corporates on behalf of institutions.

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