LONDON – 7 MARCH 2022:
A new study
from Numis, the independent investment bank (AIM:NUM)
, has revealed positive sentiment around UK investment opportunities, against a backdrop of growing boardroom confidence in the pursuit of M&A activity. The survey reveals that four fifths (78%) of institutional investors think UK stocks will outperform in 2022, and 73% are forecasting highly buoyant M&A volumes in 2022.
This mirrors the sentiment amongst corporates, with 86% expecting to undertake some form of M&A this year, as they seek to drive a market leading position (51%), navigate industry change (31%) and stay ahead of structural sector developments (31%).
Private equity and overseas bidders will continue to lead the way in driving UK M&A activity in 2022, according to the survey, attracted by compelling valuations, favourable exchange rates and access to cheap financing. Of the 200 institutional investors surveyed, 57% expect competition for assets from private equity to rise in 2022 with 89% of investors viewing the higher levels of PE buyer activity in the UK market as either positive or very positive.
From a sector perspective, 40% of institutional investors expect financials to be the most active from an M&A standpoint, more than twice the proportion of any other sector and further evidence of consolidation pressures across the industry.