PitchBook’s latest Q1 2026 UK Market update, released on 27 April, paints a picture of contrasting fortunes across private capital channels. While venture capital demonstrated unexpected resilience and growth, private equity activity cooled after a robust prior period. Overall deal values reached £7.2 billion in VC, £23.8 billion in PE, and a record £91.9 billion in corporate M&A, with VC-backed public listings limited to just three deals carrying a median value of £19.3 million.
PitchBook also pointed out in the research report that exit values stood at £3.5 billion for VC and £14.9 billion for PE, while fresh capital commitments totaled £1.1 billion in VC and £7.4 billion in PE.
UK public equities posted a 3.4 percent year-to-date return and traded at a 17.6x price-to-earnings multiple.
Macroeconomic headwinds continued to shape the landscape. The Office for Budget Responsibility trimmed its 2026 growth projection to 1.1 per cent from 1.4 per cent, citing subdued private-sector demand.
Inflation moderated to 3 percent in January—its lowest level since March 2025—yet stayed above the Bank of England’s 2 percent target.
In March, the Monetary Policy Committee unanimously kept the Bank Rate at 3.75 percent, citing fresh inflationary pressures from elevated global energy prices linked to Middle East tensions.
The Spring Statement offered little in the way of new fiscal stimulus amid ongoing geopolitical uncertainty.
Regionally, activity is broadening beyond traditional hubs. Over the past decade, London, Cambridge, and Oxford dominated private-market deal counts and capital deployment, but Manchester has climbed into the top three nationally.
Leeds now ranks among the leading cities for all-time PE deal value, while Sheffield has surged to fourth place in cumulative PE and VC capital raised.
Venture capital stood out with £7.2 billion in deal value—a marked rise both year-on-year and quarter-on-quarter—fueled by several outsized transactions. Nscale and Wayve each secured more than £1 billion, while Kraken Technologies raised £745.7 million and Roark closed a large aerospace and defense round.
Information-technology investments captured roughly 70 percent of total deal value, the highest share since 2023, as energy-sector funding virtually disappeared.
Exit proceeds edged higher to £3.5 billion, though no VC-backed IPOs occurred; all liquidity came through M&A, with healthcare and business-to-business companies leading deal counts.
Fundraising reached £1.1 billion across fewer vehicles, already approaching the full-year 2025 total.
Private equity, by contrast, saw deal value slip to roughly £24 billion. Add-on acquisitions gained ground at the expense of primary buyouts, keeping average deal sizes modest—the largest transaction, Netomia, an internet-service provider, closed at £2 billion.
US investors’ share of deal value fell to 35.7 percent, ceding the top spot to German capital at 38.8 percent.
Exit value held steady near £15 billion, supported by two large secondary deals exceeding £2.7 billion: Coller Capital (acquired by EQT) and Evelyn Partners (acquired by NatWest).
Fundraising remained subdued and broadly in line with 2025 levels, with only nine funds closing, most of which were above the £500 million mark. PE dry powder edged up slightly to £145 billion, while VC dry powder continued its decline toward £15.6 billion.
Corporate M&A hit an all-time quarterly high of £91.9 billion—nearly triple the Q4 2025 figure—with business-to-consumer, energy, and healthcare sectors driving the surge.
Median deal values lagged behind those in the Netherlands and France. In policy news, the UK government unveiled a £500 million Sovereign AI initiative to back domestic artificial-intelligence startups.
PitchBook analysts describe the sum as modest relative to the £7.1 billion already deployed into British AI companies in 2025 alone, noting that median Series C–D AI deal sizes in Europe reached €71 million last year.
While the fund may assist early-stage firms, deeper institutional capital will be required for UK startups to compete globally.
A companion chart tracking VC dry powder by vintage year underscores tightening supply at the younger end of the market, with 2025 vintages already accounting for a substantial share of the £25 billion total.
Overall, the data from PitchBook signal a UK market in transition—buoyant in venture and M&A, cautious in traditional PE—set against a backdrop of moderating inflation, steady rates, and evolving regional strengths.