Total private equity investment activity in Yorkshire fell last year, according to research by KPMG UK, but greater activity is expected in 2026.
The firm’s latest UK Private Equity Review found that 125 transactions were completed in the region in 2025, a fall of 13 per cent year-on-year.
According to the report, Yorkshire and wider UK market confidence was affected by geopolitical tensions, tariff uncertainty and ongoing economic challenges throughout the year.
However, deal activity in Yorkshire accelerated in the second half of 2025, with 73 deals completed, compared with 52 in the first half.
Private equity exits held steady in 2025, compared to the year before (26 vs 25). Within 2025, however, activity was slightly stronger in the first half of the year, with 14 exits completed in H1 compared with 12 in H2.
Bolt-ons remained the most common deal type year-on-year, with 73 completed, as investors sought to build scale in their existing platforms. This was followed by buyouts, of which 23 were completed – in line with the year before.
The region’s private equity interest accounted for 7 per cent of the total PE backing in the UK.
Giles Taylor, head of corporate finance in Yorkshire at KPMG UK, said: “Private equity activity across the region softened in 2025. However, the second half of the year delivered stronger momentum, suggesting investor confidence is beginning to return as market conditions stabilise. It’s also encouraging that bolt-ons remained a particularly popular deal type, as businesses continued to pursue strategic M&A to support growth ambitions despite wider uncertainty.
“This positive trajectory sets a strong foundation for 2026. With greater availability of capital and credit expected, we anticipate a rebound in transaction volumes as investors re-engage with high-quality assets and well-run businesses.
“Yorkshire’s growing profile in financial services and innovation is also boosting its appeal to private equity. Initiatives such as the region’s AI Growth Zone bid, alongside a strong pipeline of resilient businesses, are continuing to support investment and exit activity, even against a backdrop of wider economic pressures.”
Nationally, the review found that 1,751 deal transactions were completed in 2025, a fall of 10 per cent year-on-year. While overall volumes recorded were lower than the post Covid rebound in 2021 and 2022, they remain significantly higher than the average recorded in the years immediately prior to Covid.
KPMG said UK private equity activity is expected to pick up in 2026, helped by record levels of available capital, more businesses coming to market, and a renewed focus on improving how companies operate.
There is also growing interest in sectors such as defence‑related industries and AI‑enabled business models, where investors see long‑term growth potential.