Private equity investment across the Midlands slowed during the first six months of 2026 as investors adopted a more cautious approach amid economic and geopolitical uncertainty.
New analysis from KPMG UK’s Private Equity Pulse found there were 87 private equity deals completed in the region during the first half of the year, a 10% decline compared with the same period in 2025.
Exit activity also fell sharply, with just six transactions completed, down from 19 a year earlier – a decrease of 68%.
Despite the slowdown, the Midlands remained the third-largest regional market for private equity investment in the UK, behind only London and the North West. The region accounted for 10% of all new private equity backing nationally.
Bolt-on acquisitions continued to dominate the market, making up 58 deals, or around 67% of all transactions. Traditional buyouts accounted for 15 deals (17%), while there were nine minority investment deals (10%).
The report said the market had been affected by ongoing geopolitical uncertainty and growing questions over how artificial intelligence could influence company valuations across a range of sectors.
Stuart Sewell, head of M&A for the Midlands at KPMG UK said: “The last six months have seen private equity deal volumes reduce in the Midlands, as ongoing geopolitical tensions and uncertainty around the impact of AI on valuations make investors more cautious. But we’re still seeing resilience beneath the surface, and it’s reassuring that the Midlands has maintained its position as the third largest regional hub for private equity investment after London and the North West.
“What remains encouraging is that the Midlands has a wealth of assets in sectors from industrials and manufacturing to professional services, as well as an active buyer audience that’s ready to invest. This positions the region well for an uptick in deal activity as confidence improves.”
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