Written by Nick Hague
Last month, I spent the day at the Mergermarket’s UK Forum in London, and rather than write up the agenda, I thought it would be more useful to share what people were actually saying in the room, in the coffee queues, and over lunch. If you couldn’t make it, here’s the flavour of the conversations.
Valuations (unsurprisingly) came up in every conversation
If there was one thread running through the day, it was this. Almost everyone I spoke to, on panels and off, came back to the same point: valuations are still too high, and that’s one of the reasons that activity feels slower than it should.
The phrase I heard more than any other was “the ‘OK’ assets aren’t moving.” Trophy businesses still get away. Genuinely broken ones get repriced quickly. It’s the big middle band of solid but unspectacular assets where buyers and sellers can’t agree, and that’s where most processes are dying.
Time kills deals (and everyone has the scars)
Another line that came up again and again, and to an extent, linked to the issues on valuations was deal processes are taking longer. The longer a process drags, the more likely it is to fall over. Diligence findings stack up, management gets distracted, the macro moves and, at some point, the deal quietly dies in the data room.
Several people also made the point that the current macro environment is making pricing genuinely difficult. One of the biggest challenges is simply forecasting business performance. After years of disruption (Brexit, Covid, fiscal policy shocks, geopolitical tensions and a steady stream of market uncertainty) many buyers are finding it harder than ever to underwrite future earnings with confidence. When forecasting becomes more difficult, pricing becomes more difficult, and that makes getting deals over the line far harder.
Overpayments from the last cycle are also still working their way through portfolios. Sellers can’t accept a markdown without booking a disappointing return, so they wait. And waiting, as the room kept reminding itself, doesn’t help.
Carve-outs are having a moment
A lot of the more interesting conversations were about what sponsors are actually doing to get things moving.
Carve-outs came up repeatedly. The mood is very much focus on the core, separate out the non-core or underperforming divisions, and tell a cleaner story on what’s left.
Where the headline number won’t move, structure is doing the work: earn-outs, vendor loans, rollover equity, staged consideration.
People were also pretty open about which sectors are busy and which aren’t. Industrials, consumer and business services kept getting mentioned as active. Software deals, on the other hand, was widely described as essentially unfinanceable in its current form.
What people think happens next
Of the forecasts made, a few common expectations came up.
Overseas money keeps flowing into the UK. Foreign buyers continue to play a major role in UK M&A, with recent data suggesting that approximately 86% of UK deal value in 2026 has come from inbound acquisitions by non-UK buyers. It felt particularly relevant in the room. FX helps. So does the fact that, for all its issues, the UK is genuinely engageable on the regulatory side in a way several people felt parts of Europe aren’t.
A few people flagged the possibility of a short pause around a change of PM while things settle, similar to what we saw post-Iran and around other set-piece moments. Most expected an uptick in activity beyond that, with complexity rising rather than falling.
Software and tech businesses being pushed to become genuinely “AI-ready” rather than traditional SaaS was another recurring theme, as was the rise of strategic buyers across pretty much every sector.
AI was the other word of the day
Unsurprisingly, AI came up constantly. The interesting bit was the tone. Less hype than I expected, more practical. A few things stood out from the chats.
IMs are now routinely going into AI tools for summaries and stress-testing. With a strong caveat that they all require human reference, input, expertise, and checking.
Buyers are increasingly expecting a credible AI story inside the equity narrative, not as a buzzword but as a real answer to how the asset lowers cost, lifts margin or opens new revenue.
The headcount question came up more than once and the answer was striking: nobody I spoke to is using AI to cut people. One firm mentioned they’d actually increased hiring since fully adopting AI about a year ago. The repeated point was that if you cut your juniors, you cut your succession pipeline. Better to redeploy them into higher-value work.
And on origination, the consensus was clear: AI is great for market mapping and analysis, but M&A is still a relationships business. BD still happens in person. Nobody thinks that’s changing.
What does this mean for the private equity talent market?
Listening to the discussions throughout the day, it was hard not to think about the talent implications behind many of these themes.
When markets are moving quickly and there are fewer factors restricting deal activity, quality assets of all kinds tend to find willing buyers and achieve favourable outcomes. In a more uncertain environment, however, the quality of the M&A and Corporate Development team becomes a far more important part of the investment case. Longer diligence processes, greater scrutiny of forecasts and increasing deal complexity place greater emphasis on management quality, execution capability and strategic judgement.
That is particularly evident in carve-out situations, where separating a business, building standalone capabilities and delivering a new strategic direction requires experienced leadership from day one. The same applies in slower-growth markets, where value creation is driven less by market tailwinds and EBITDA expansion alone, and more by operational excellence, strategic execution and disciplined M&A.
The conversations around AI reinforced a similar point. While the technology is rapidly becoming embedded across dealmaking and portfolio operations, nobody was suggesting it reduces the importance of management teams. If anything, the opposite. As AI becomes more accessible, the competitive advantage increasingly lies with the people who can identify practical applications, drive adoption and turn technology into measurable results.
AI may allow teams to spend less time on lower-value tasks and more time on strategic, commercial and value-creating activities, but it is not a substitute for talent. Businesses still need strong management teams, succession plans and pipelines of future leaders. In fact, reducing investment in junior talent risks creating leadership gaps at precisely the point when judgement, adaptability and execution are becoming even more valuable.
For private equity investors, that places a premium on M&A and leadership teams capable of executing through uncertainty. For candidates, it reinforces the value of skills that are difficult to automate: managing complexity, leading transformation, influencing stakeholders and delivering measurable value creation.
In short
While valuations, financing conditions and market sentiment will continue to influence deal activity, high-quality deal leadership remains one of the few levers investors can directly control. In a market where conviction is harder to build, exceptional talent becomes an even more valuable asset.
The takeaway
If I had to boil the day down to one sentence, it would be this: The appetite is there, the capital is there, and the UK story is still attractive to buyers.
What’s holding things back isn’t a lack of appetite or capital. It’s the combination of valuation expectations, underwriting uncertainty and increasing deal complexity. Resolve even some of those challenges, and a lot of what feels stuck today starts to move.
Thanks to Mergermarket for putting on a genuinely useful day, and to everyone who stopped for a chat. If you were there and your read of the day was different, I’d love to hear it.