Last week we visited our UK colleagues, clients and friends for a number of discussions around private capital. These conversations echoed similar sentiments from investors at home, with many funds building on already existing positions in both private credit and private equity. We heard about strategies, not related to timing, but rather more sophisticated approaches to private market exposure.  

Since our last tour in 2023 economic and market conditions have clarified. As is the case in the US, the UK economy continues to motor along despite BOE’s rate of 5.25%, essentially at the Fed’s current level. While the nation’s predicted growth rate this year of 0.7% is about half of the US, its inflation rate has also been holding steady 2% (vs. 3% here) for a number of months. That is expected to lead to rate cuts later in the year. 

The political situation has also been resolved with the New Labor government taking over after a fourteen year hiatus. New fiscal announcements are expected to be forthcoming with a first budget in October. These trends have created a constructive environment for capital markets in the UK, particularly in private markets. For more global-oriented investors, there was also increasing interest in access to assets both in Europe and the US.