This edition of RG’s Human Capital M&A Report demonstrates the continued resilience of the UK’s human capital sector in the face of a challenging macroeconomic environment, providing optimism for the year ahead. As inflation begins to moderate and interest rates stabilise, we anticipate a more buoyant landscape for Human Capital M&A in 2024, driven by an opening up of debt markets and a resurgence of investment, particularly among high growth niche recruitment businesses, search firms and private equity investors.
In anticipation of a more active debt market in 2024, we can expect private equity acquirers to deploy their pent-up ‘dry powder’. A resurgence of M&A activity seems imminent, with strategic acquirers and investors poised to acquire premium UK assets in an effort to achieve geographic expansion, service offering diversification, candidate pool expansion and further scale, thus enabling businesses in low margin sectors to remain competitive from a pricing perspective.
Human Capital business owners seeking to consider their exit options in 2024 should remain vigilant to a potential rise in capital gains tax and potential changes to the 10% BADR, with a UK General Election expected in late 2024.
