Activity is picking up in UK leveraged lending as private equity firms start to target middle-market buyouts, which have more attractive valuations after the sharp fall in sterling following Britain's vote to leave the European Union in June. Changing currency dynamics are also making British buyout deals more appealing due to the premium that sterling offers to compensate investors for lending in a less liquid currency, despite the uncertainty that the Brexit vote has cast over the UK economy. For US private equity firms with dollars to spend and European sponsors deploying euros, the 15% fall in the pound since the referendum is making the valuations of British companies more attractive.
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