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LDC partner confident amid larger deal pipeline and strong 2025
26 Jan 2026
As seen in Insider
A partner and head of the South West and Wales at private equity house LDC has hailed a successful 2025 and is confident of “continuing to drive M&A activity over the year ahead”.
Dewi Hughes said the firm had a “strong” 12 months from both an investing and realisation perspective despite a “challenging macro-environment” for dealmaking.
Alongside this, Hughes said it continued to support its existing portfolio companies to develop and grow, including through launching new products, recruiting talent and expanding into new markets.
Amongst the transactions highlights included the exit of Hybrid, a specialist in higher education marketing, which more than quadrupled in size through a hold period and which Hughes said “delivered a truly exceptional return.” This was alongside the exit of UK adventure park operator Zip World, which he noted also “delivered a strong return” in a transaction that valued the company at more than £100m.
Hughes believes both are great examples of how private equity can support management teams to grow companies organically and inorganically, develop new propositions and open new offices / sites in new geographies.
In terms of investments, Hughes pointed to LDC’s investment in Taking Care, a provider of technology-enabled care products and services, in a management buyout from AXA Health.
He said the firm was looking forward to partnering with the team to support their ambition to “create new digital services to meet the needs of the UK’s growing ageing population”.
“We have witnessed some sector thematic investing, he said. “Tech-enabled business services, built environment and compliance services have been attractive sectors, particularly where there is strong growth, recurring income, long-term contracts and a strong pipeline and backlog of opportunities.
“International expansion has also played an increasingly important role in driving M&A activity. Businesses that can scale beyond the UK are widening their growth opportunities, their total addressable market and are therefore increasing their attractiveness to a broader pool of buyers.
“Our recent exit from Bristol-headquartered leader in education marketing, Hybrid to US-based education company EAB is a good example of this.”
Hughes said LDC had “hit the ground running in 2026”, following its investment in Taking Care and the exit of Hybrid in December.
He believes these transactions reflect the momentum seen in the market through Q4 of 2025, which the firm “expect to continue into the year ahead”.
“I’m cautiously optimistic about 2026,” Hughes said.
“Our deal pipeline is larger coming into this year versus last year and we have observed more businesses preparing to come to market, despite continued wider economic and political uncertainty.
“From our discussions with corporates, entrepreneurs and management teams we sense that there is significant pent-up demand which will drive M&A activity in the short to medium term. Funding conditions also remain supportive, with banks keen to back the right opportunities and private equity investors focused on deploying capital.
Buy-and-build strategies will continue to play an important role in driving activity. Private equity-backed businesses are often highly acquisitive as a clear means of providing growth, strengthening capabilities and extending geographic reach.”
“From an LDC perspective, the vast majority of our regional portfolio has either undertaken acquisitions recently or are evaluating acquisitions currently.”
Looking at key trends in 2026, Hughes said LDC was seeing more activity around carve-outs and non-core disposals, as larger corporates and PLCs sharpen their strategic focus.
He noted these transactions can create attractive opportunities for private equity to back established businesses with renewed momentum.
“Our recent investment in Taking Care is a good example,” he said. “We backed the management buyout of the Exeter-headquartered business from AXA Health, enabling it to operate as a standalone platform, invest further in digital capability and pursue targeted acquisitions in the growing telecare market.”
He added: “From a sector perspective, in addition to an expected continued focus on tech-enabled business services, we believe there is increasing interest in South West healthcare and life sciences firms as there is in aerospace and defence (an area of strength in the South West), given the obvious tailwinds in the sector. We’re also seeing sustained activity across professional services and cyber, alongside businesses operating in regulation-driven markets such as compliance and infrastructure services.
“For us, 2026 is about continuing to back ambitious management teams across the region and supporting businesses as they scale. The South West has a deep pool of high-quality companies with strong fundamentals and we’re confident that will continue to drive M&A activity over the year ahead.”