Private equity activity in the UK’s North West expanded slightly in the first half of 2026, but the picture beneath the headline shows fewer exits and a pronounced preference for bolt-on acquisitions, according to KPMG UK’s mid-year private equity pulse.
Deal volumes up, exits down
KPMG found that total private equity deal activity in the North West rose by 3% compared with the first half of 2025, with 102 deals completed between January and June. At the same time, however, exits fell sharply: only eight exit transactions were recorded in H1 2026, a near 43% decline from the 14 exits reported in the same period last year.
The firm said the mixed results reflect a backdrop of economic uncertainty driven by geopolitical developments and concerns about the broader effects of artificial intelligence on business models and sectoral returns.
Bolt-ons dominate activity
Bolt-on acquisitions accounted for the bulk of activity in the region, with 71 bolt-on deals — almost 70% of all transactions in the period. Minority stake deals, buyouts and leveraged buyouts were the joint second-largest categories, with 13 transactions each.
| Deal type | Number of deals (H1 2026) |
|---|---|
| Bolt-on acquisitions | 71 |
| Minority stakes | 13 |
| Buyouts / LBOs | 13 |
| Total deals | 102 |
| Exits | 8 |
Sector focus and investor preferences
KPMG said investors in the North West are increasingly selective, favouring businesses that can demonstrate resilient earnings, recurring revenues and strong market positions. Technology and business services remain key targets, but there is an expanding appetite for industrials and services companies that can show long-term revenue visibility.
"Private equity investors remain active in the North West, but they are being increasingly selective about where they deploy capital," said Christian Mayo, partner and head of corporate finance, North at KPMG UK.
Mayo also highlighted that artificial intelligence is now a central consideration in investment decisions — both as an opportunity to enhance growth and as a factor in assessing a target’s future defensibility. In such an environment, he said, businesses that can pair a compelling equity story with solid fundamentals will be best placed to win investor backing.
Regional and national context
The KPMG report noted the North West accounted for 11.5% of new private equity backing across the UK in the period. Across the UK, five regions — the South East, South West & Wales, North West, Yorkshire and the North East — recorded increased deal volumes in H1 2026 compared with the same period last year.
- Deal concentration: Bolt-ons continue to be the primary form of activity, signalling consolidation strategies by existing platform investors.
- Exit market weakness: The fall in exits points to either fewer attractive sale opportunities or market conditions discouraging disposals.
- AI influence: Fund managers are assessing targets for both AI-enabled growth and vulnerability to disruption.
The report’s detail is incomplete in the published extract, which cuts off during a further quote from a Manchester-based executive. KPMG’s full mid-year pulse would likely expand on regional sector break-downs, valuation trends and timelines for exits, which remain a crucial signal of private equity health.
For investors, owners and advisers operating in the North West, the message is clear: disciplined deal selection and demonstrable recurring revenues matter more than ever. For workers and communities in the region — particularly in manufacturing and services where consolidation is common — sustained investment can bring jobs and growth, but fewer exits may also mean longer hold periods and a different cadence of change for local employers.
As the year progresses, market watchers will be watching whether exit activity recovers, whether AI continues to shift investor preferences, and how regional deal flow compares with national trends.
