2024 has seen ECI complete five platform investments, but in an environment of quieter dealflow for the private equity market at large. With over 60 countries having gone to the polls in the last 12 months, what does the global outlook look like now for CEOs, and what is front of mind for LPs, PE Funds and the ECI team?
Tom Wrenn on the 2025 deal market:
“There is an excellent backdrop for increased deal volume across our market in 2025. Currently the UK has a more stable environment compared to the rest of the world, or even to last year. The after effect of a definitive general election win by the incoming government is good for general investment macro stability. The government is cracking through its agenda, which regardless of whether you agree with it or not, is enabling the PE industry to plan ahead. Interest rates are starting to come down, albeit slowly, and this has been calming for businesses in terms of debt cost and leveraged buyouts. CGT changes increasing at a sensible rate demonstrates the government is consulting with business and industry to get it right, and thankfully hasn’t led to business owners halting sales.
We anticipate a continuing uptick in deal flow in 2025 as investors continue to call for more liquidity, but there may be a greater range of quality leading to more failed processes. Higher deal volume in 2025 will be very welcome for the PE market, but it’s important not to ignore the movement of global tectonic plates such as the war in Ukraine, the Middle East and the uncertainty around Trump’s agenda when he’s in power.”
What are you personally most excited about in 2025? Finally being through the horrors of UK 11+ exam process as my final child emerges from them!
Jeremy Lytle on the fundraising market:
“It’s been a challenging few years for fundraising as the same amount of capital being raised is concentrated in far fewer funds. One in three funds are now closing below target and the average time spent fundraising is double what it was in 2019. Behind all these challenges is a lack of exits – realisations have been muted since 2022 when interest rate hikes started, so LPs’ budgets haven’t been replenished with fresh capital for new funds.
Desire to deliver DPI therefore continues to be the primary objective for LPs, but they will also be looking for mature fund management and smart exits – GPs making sure they are not hanging on to average performing investments for too long, or selling their stars too early, and focusing on the deals that really have potential to drive the overall fund return. These factors, alongside a desire for more co-investment, will likely be three key decision makers for LPs looking to deploy capital in 2025.”
What are you personally most excited about in 2025? Liverpool doing the double of PL and Champions League by the end of May!
Rory Nath on the North West investment market:
“The wider background of UK stability provides a solid foundation for North West businesses and dealmakers to have a busy 2025. There continues to be challenges around operating in a lower growth environment, but we see North West businesses bucking the trend, delivering some of the best of UK tech in particular. A great example of this is CMap, a Manchester-headquartered market-leading provider of professional services automation (PSA) software, which ECI backed in October 2024. What we’re seeing from the North West headquartered businesses in our portfolio is that, while they benefit from the fantastic local business community, their ambitions are global and we’re seeing great international growth both organically and through acquisitions.
We continue to look for greater infrastructure investment across the region, and government announcements around intra-city transport links are welcomed, although we’ve been here before so I won’t buy a train ticket just yet!”
What are you personally most excited about in 2025? my 10 year anniversary at ECI, and my wife and I welcoming our second child!
Skyler Ver Bruggen on the acquisition market:
“We saw an uptick in M&A activity this year as founders looked to exit ahead of the first Labour budget at the end of October 2024. Advisors are still reporting a high number of sales mandates, although with some slow down in workforce heavy sectors that have been impacted by NI increases. Despite the promise of no more tax increases for businesses there is still uncertainty about how that might change in the future and that will accelerate some sales processes, alongside the usual drivers of enabling succession and retirement.
With a background of lower economic growth, companies and investors will look to acquisitions to drive value. Acquisitions which offer the opportunity for the buyer to extend capability, expand into new geographies and ultimately drive cross sell and up sell will continue to see lots of interest.”
What are you personally most excited about in 2025? Hopefully moving house and getting a bit more space!
Lewis Bantin on portfolio growth opportunities:
“I think 2025 will see more investment in the commercial ‘engines’ of companies, looking at how to marry strong outbound business development, rather than reliance on Google search. While PPC and SEO are great, you are increasingly reliant on a smaller and smaller piece of SEO real estate on a search page, and a hugely contested PPC landscape. Companies are going to become much more focussed on their ideal customer profile and we’ll be looking to support our portfolio in a targeted approach to activating those customers. If you get this right, you should benefit from an increase in customer lifetime value and long-term growth!”
What are you personally most excited about in 2025? I’m looking forward to seeing Captain Caelan leading the Lions down under and hopefully joining him down there!
Tsvetelina Delcheva on the European market:
“Looking at the European deal market, I expect to see more activity in 2025 as investors’ demand for liquidity remains strong. The drivers here are much the same as in the UK – strong dry powder reserves, combined with longer hold periods and ageing portfolios.
Demand for tech businesses will remain strong, which will mean we will likely see more deals in the likes of the Benelux and the Nordics where the tech sector is a cornerstone of the economy. Companies here are doubling down on AI adoption, and leading the way in sectors that enable automation, data analytics, and cybersecurity. Many of the resilient tech businesses across the Benelux and the Nordics are globally-minded, and for that reason we are increasingly seeing international investors being active in those regions, with subsector experience rather than geographical proximity being one of the most important factors for management teams when selecting an investment partner.”
What are you personally most excited about in 2025? Having recently moved closer to Wimbledon, I’m looking forward to experiencing the atmosphere of The Wimbledon Championship from a close distance for the first time.
Ash Patel on the cyber outlook:
“As AI tools grow more sophisticated, phishing attacks are expected to become more targeted and harder to detect. Deepfakes are increasing and improving in quality, with more companies being attacked, which will emphasise the need for robust detection, tools and policies. There will be a push for blockchain and watermarking as technology tries to keep up with attackers.
While AI will benefit bad actors, it will also hinder them. AI-driven cybersecurity systems will improve how organisations can detect and respond to threats. As the machine learning model improves, the speed and accuracy of detection will go up and fewer attacks will make it through. It also enables companies to spot unusual user or device behaviour that might indicate insider threats or compromised accounts.”
What are you personally most excited about in 2025? Celebrating 25 years of marriage and 25 years at ECI!
