• The volume of mid-market private equity investment in Scotland fell by 14%.

• Amongst 24 investments in Scotland, bolt-ons remain the most popular deal type.

• Total UK private equity deal volumes dropped in H1 2025 to their lowest levels since the second half of 2020
• The second quarter saw reduced activity versus Q1, as geopolitical tensions dampened momentum across private equity and the mid-market

Mid-market private equity investment in Scotland fell in the first half of this year, according to KPMG UK’s mid-year private equity pulse.

The mid-year study into private equity deal activity found that interest in the region’s mid-market declined, with 24 deals completing and deal volumes falling by 14% compared to H1 2024.

The findings reflect a backdrop of economic uncertainty, influenced by ongoing geopolitical developments and concerns surrounding the potential impact of trade tariffs.

Bolt-ons remained the largest component of mid-market private equity activity across Scotland, making up over two thirds of all deals. Traditional and leveraged buyouts (LBOs) were the second largest deal type, followed by minority investments and management buy-ins.

Scotland’s mid-market private equity interest accounted for 6% of the total mid-market private equity backing in the UK. Deal activity in the mid-market slowed down across all regions in the UK, except the South West, which experienced increased activity in terms of deal volume, compared with the first half of 2024 (28 vs 22).

Graeme Williams, Head of Corporate Finance in Scotland at KPMG UK, said: “There’s no doubt that deal activity on the whole has slowed across the UK, and Scotland hasn’t been immune to that trend.

“What stands out however is the consistency in the types of deals being done – bolt-ons made up over two-thirds of all mid-market activity here, showing that investors remain confident in backing growth through strategic acquisitions.

“While the wider market has been challenged by geopolitical headwinds, the fundamentals in Scotland remain solid. We continue to see strong interest in key locations like Edinburgh and Glasgow, where high-quality businesses and resilient sectors are creating opportunities. As the market begins to stabilise, I’m optimistic that momentum will grow in the second half of the year.”

The national outlook

From a national perspective, last year’s rebound in all private equity investment stalled in the first half of 2025 as activity dipped to the lowest levels since the second half of 2020.

Deal volumes dropped 17% year on year, with a total of 726 deals closed throughout the first half of 2025 compared to 876 over the same period in 2024. The second quarter witnessed fewer deals compared to Q1 as geopolitical uncertainty put the brakes on activity across all private equity and the mid-market. Most deals took place in Q1 with 370, while Q2 saw only 356 deals close.

The slowdown in the mid-market was less pronounced with a total of 377 deals in the first half of the year, representing a fall of 11% year on year.

Commenting on the findings, Alex Hartley, Head of Corporate Finance at KPMG UK, said: “As we headed into 2025 off the back of strong deal numbers last year, the expectation was that M&A activity would continue to pick up. But economic uncertainty, driven by geopolitical events and nervousness around the impact of tariffs, has meant that the deals market has been slightly more volatile so far this year, and getting deals over the line is taking longer.

“That said, the mood remains cautiously optimistic, and there are still sectors where appetite remains strong, such as business services, healthcare and technology, media and telecoms. We may start to see activity pick up over the rest of the year, as business owners contemplate potential tax changes in the Autumn budget and they have had time to assess any impact from global tariffs.”