How will the UK's financial services sector adapt to huge increase in demand post-Covid?

The market for Mergers, Acquisitions and other deals has, in the past two years, weathered periods of quiet during lockdowns and periods of boom as the economy reopened and optimism returned. This high demand looks set to continue well into 2022 with a new survey indicating that 90% of dealmakers expect stronger activity over the next 12 months. Much of this demand is expected to be driven by distressed deals and cheap UK companies, with analysis from Schroders indicating that on average, UK companies are undervalued by around 30%. Further to this, at points in 2021 deal volumes were at their highest since 2006.

The volume of deals has been noticed by professional service and accounting firms, a sector which has seen a far quieter year given Covid-19 and Brexit. Mid-sized firms have disrupted the sector this year, taking on many of these large clients, and offering more tailored solutions to clients. As such, this is an opportunity for these firms to further monopolise and aid both buyers and sellers in the private sector to ensure neither party falls flat at a time of rapid deals, and surges in cashflow and financial backing driving deals quicker than ever before. These firms are standing as the flexible resource keeping the deals market afloat at key times when the difference between a deal going through and it falling through can be a matter of minutes. The end of the Big Four's near monopoly could also open the door for smaller, more nimble firms to further capitalise, and the increasing demand for consultancy around deals means that those looking for a more tailored service will in many cases look to smaller, more agile providers.

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