In a note from Charles Hall, head of research at the investment bank, he warned that UK M&A activity had accelerated towards the end of 2023 and is set to continue into 2024, which could lead to fewer publicly listed companies.
Shareholder activism and M&A surge is a mixed blessing for investment trust sector
He argued that the “key driver” of this problem had been the 30 consecutive months of outflows from UK funds, leading to selling pressure and declining valuations.
“The negative trend is self-fuelling, as the poor performance of UK equities makes them appear less attractive to fund managers and retail investors, the reduction in liquidity reduces appetite from overseas investors, and reduced capitalisation impacts on index weightings,” he explained.
Hall noted the pace of dealmaking had increased throughout the year, as there had been just three offers announced in Q1 2023 compared to 18 in Q4.
None of these came at the large…
