Author: admin

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK companies attracted a surge of interest from foreign buyers eager to capitalise on cheap valuations, driving British dealmaking in 2025 to a post-pandemic high, new data shows.

Overseas bidders agreed $142bn in takeovers of British companies over the past year, according to data from the London Stock Exchange Group. That marks a 74 per cent uptick from 2024.

The sharp rise in foreign takeovers outpaced a broader 20 per cent rise in UK mergers and acquisitions — which reached a total value of $367bn this year — to reach the highest levels since the pandemic-era boom.

“The UK stock market remains materially undervalued,” said Philip Noblet, head of UK & Ireland investment banking at Jefferies.

“The ratings are still poor to rival companies in the US, but also in Europe, so people keep coming . . . We’re going to see more strategic interest from overseas in 2026 and for bigger companies,” he added.

While the overall value of UK M&A rose 20 per cent, it was mainly driven by a rise in larger deals. The overall number of deals announced in the last year fell 16 per cent. One such headline deal was Anglo American’s $50bn merger with Canadian rival Teck Resources, having rebuffed repeated takeover attempts by Australia’s BHP.

The UK’s bumper year is in the context of a wider dealmaking frenzy, particularly in the US, where President Donald Trump’s deregulatory push has prompted a spate of megadeals topping $10bn.

Just over half of foreign acquisitions for UK companies involved an American buyer, far ahead of any other country, such as DoorDash’s £2.9bn acquisition of Deliveroo.

Private capital investors have been particularly eager bidders for UK assets, with top transactions for the year including the £5.7bn acquisition of Pension Insurance Corporation by the Apollo-backed European insurer Athora, and Advent’s $4.8bn deal to acquire a majority stake in a portfolio of Reckitt cleaning products.

One particularly popular strategy has been private equity takeovers of publicly listed companies; one reason why London has lost core constituents of its public markets.

Some London-listed groups such as the £4.8bn industrial group Spectris and the £2.7bn fund administrator JTC were acquired by private equity firms KKR and Permira respectively after competitive bidding processes.

The deals also highlighted how UK boards are pushing suitors for higher bids to compensate for their relatively lower valuations. KKR’s final offer for Spectris represented a close to 100 per cent premium compared to the company’s share before a bidding war broke out.

“UK boards have got more self-confidence [ . . . ] boards are likely to hold out on premia for takeover bids that are on average higher than has historically been the case,” said Murray Cox, a partner at the law firm Weil, Gotshal & Manges.

Other significant transactions in the past year include Santander’s £2.65bn acquisition of high street lender TSB.

“Where is M&A happening in the UK? It is in the products we have to sell, which is services; professional services, financial services,” said James Howe, co-head of European M&A at the law firm Simpson Thacher.

The surge of foreign takeovers for UK companies contrasts with domestic dealmaking, which plunged 54 per cent to about $44bn, the lowest level since 2016.

Domestic dealmakers have had to contend with economic uncertainty both overseas — driven by Trump’s widespread tariff plan — and the wait for the UK’s new budget in late November.

Chancellor Rachel Reeves’ budget drove taxes to an all-time high, but it was preceded by weeks of uncertainty that broadly forced dealmakers to sit on the sidelines.

There remains a large number of transactions still in the works: BP is in talks to sell its lubricants business to the infrastructure investor Stonepeak, and Comcast’s Sky is in talks to buy ITV’s television business.

Meanwhile, the private capital owners of UK wealth manager Evelyn Partners, and the UK’s two roadside recovery businesses AA and RAC are all exploring exits.

“You continue to have an economy whose performance is relatively muted and where GDP forecasts have been downgraded, so that creates a necessity for companies to find growth,” said Anthony Parsons, executive chair of investment banking and capital markets at Deutsche Bank. “Private equity continues to see the UK as a very fertile ground for investment.”

Stay informed with free updates

Simply sign up to the Hedge funds myFT Digest — delivered directly to your inbox.

Macro hedge funds are enjoying their best year since at least 2008, as huge swings in the price of currencies, commodities and bonds have provided fertile conditions for traders.

An index from data provider HFR tracking the returns of such funds — which aim to profit from economic trends by trading equities, bonds and commodities — was up 16 per cent at the end of November, putting the sector on course for its most profitable year in data stretching back to 2008.

Hedge funds such as Andrew Law’s Caxton and Chris Rokos’s RCM have enjoyed returns which were well into the double digits this year, according to figures seen by the FT.

Macro managers say sharp market moves, such as the drop in the dollar triggered by Donald Trump’s trade war, a sell-off in long-term bonds, and a relentless gold rally, have offered the most favourable backdrop for the sector in many years.

“There’s plenty to work with, which doesn’t make it easy to get right,” said Ken Tropin, the founder and chair of macro fund Graham Capital, who said the firm’s discretionary portfolio managers had made most of their returns trading the dollar, gold and the US government bond market. “But at least there’s opportunity.”

Tropin said these portfolio managers relied on so-called “tactical”, or short-term, trading strategies this year, so that they could move quickly in asset classes such as currencies which were volatile in 2025.

While that approach started before the Trump administration unveiled broad tariffs in April, Tropin added, “that was really the wake-up call for everybody”.

Macro funds made money both by shorting the dollar, but also by piling into emerging market currencies and bonds, which rallied as a weaker dollar allowed countries to lower interest rates and refinance their debt more cheaply.

“Every underlying asset class like commodities, FX and bonds had great opportunities this past year,” said an executive at a large European family office that invests in hedge funds. “There was the exuberance in gold and precious metals, the bear market in US dollar, and the divergence between the actions of central banks including the Bank of England and Federal Reserve.”

The strong returns extend a renaissance for the sector which struggled during the decade of very low interest rates and muted volatility that followed the global financial crisis of 2008-9.

“If you didn’t make money this year as a macro fund it will be difficult to explain,” said one hedge fund executive in the sector.

Some funds also profited from a sell-off in long-term bonds driven by worries over excessive government borrowing in big economies, by betting on a growing gap between short-term and long-term borrowing costs.

Caxton and Graham both made money from such “steepener” trades, while Caxton also profited from rallies in gold and copper, according to people familiar with the funds’ performances. Caxton’s Global, the firm’s main fund which manages $10bn, was up 14 per cent to December 5, according to an investor, while Caxton Macro, the $9bn fund run personally by Law, was up 18 per cent.

The Absolute Return and Multi-Alpha Opportunity funds at Graham were up 8 and 13 per cent respectively at the end of November, according to people familiar with the figures. Rokos made 17.5 per cent up to the end of November, according to another person who had seen the numbers.

Greg Coffey, the Australian hedge fund star once nicknamed the “Wizard of Oz”, has emerged as one of the biggest winners this year. The flagship fund at his firm Kirkoswald Capital has made 21 per cent by mid-December, according to people familiar with the figures.

Both Graham and Rokos snapped up UK government debt when long-term borrowing costs soared to their highest levels this century, profiting as gilts rallied and yields fell back, according to people familiar with the trades.

Brevan Howard had a more mixed performance. Its Master Fund was up just 0.4 per cent as of the end of November, while its multi-manager fund Alpha Strategies, which uses a variety of investment approaches, was up 7.2 per cent over the same period, according to people familiar with the returns.

Brevan, Rokos, Caxton and Kirkoswald all declined to comment.