The findings reflect a period in which the UK experienced a more stable economic climate, with interest rates and inflation falling; greater political certainty following elections; and a surge in transactions ahead of anticipated changes to Capital Gains Tax.

The volume of private equity deals in Scotland increased from 92 to 111 year-on-year.

Investment in Scotland accounted for 5.9% of total new PE backing in the UK. London continued to deliver the greatest interest from PE funds, attracting £78.1bn of investment, ahead of the North West (£20.0bn) and the South East (£15.8bn).

Graeme Williams, head of corporate finance in Scotland at KPMG UK, said: “Scotland’s 35.6% growth in private equity investment last year shows just how resilient and attractive the country has become for investors.

“With greater economic stability and strong deal activity, cities like Edinburgh and Glasgow are leading the charge, securing billion-pound deals that highlight Scotland’s ability to draw major investment across a range of sectors. 

“It’s clear that Scotland remains as a dynamic and competitive market within the UK, and we would hope to see increased activity again this year as interest rates continue to ease.”

UK outlook

Total private equity investment activity in the UK increased through 2024. 1,699 transactions, with a total value of £158.9bn were completed during 2024, which represents an almost 12% increase in deal values from 2023. The majority of deal activity took place in the second half of the year, with values increasing to their highest level since the first half of 2022.

Alex Hartley, head of corporate finance at KPMG UK, said: “There are encouraging signs from the 2024 data that deal activity may have bottomed out in the UK in 2023, as we saw activity, both in volume and value, pick up last year.

“In particular, we saw significant activity in the second half of the year as many business owners tried to get ahead of expected changes to Capital Gains Tax.

“Given the current signals in the market around increased activity levels – alongside reducing inflation and interest rates and greater political certainty – there is cautious optimism that UK private equity deal activity will see further growth through 2025 and 2026.”

TMT sees greatest growth, while others punch above their weight

Business services dominated the private equity deal market, representing 43% of the total deals made in 2024, up more than 10% over the previous year. However, it was the technology, media, and telecom sector (TMT) which emerged as the hottest sector. Deal volumes were up nearly 19% year-on-year and cumulative values were up nearly 58% over the same period, capturing more than £40bn in total deal value.

While deal volumes were both down in financial services and the energy sectors, the value of those deals was greater than their sum. Financial services represented 11% of the deals, but 14.6% of the value, while energy represented 3% of the deals, but 4.7% of the overall value, indicating that they were both punching above their weight.

Another sector that saw a resurgence was consumer goods and retail, with volumes up 5.3% to 138 and values up 21% to £10.7bn, reflecting improving consumer confidence through the year.