SCOTLAND’S mid-market private equity investment has topped pre-pandemic levels with more than £2 billion spent in the first half of this year, according to the new analysis.

KPMG said 35 private equity deals worth £2.1bn were recorded in the six months to June, which is the largest half-year tally in the last five years and a 75 per cent increase in volumes set against the first half of 2019, when 20 deals worth £1.4bn were sealed.

Volumes and value of mid-market investments in Scotland grew year on year by 46% and 100% respectively, with technology and life sciences the most in demand sectors.

KPMG suggested that the market is likely to soften in the second half of 2022, as uncertainty returns.

“After back-to-back years of disruption for dealmakers and investors we saw a real return to form in the first half of this year, as pent-up demand was released across Scotland’s mid-market,” said Graeme Williams, of KPMG UK, said. “It’s heartening to see half year levels surpass pre-pandemic volumes and values, and we’re very much on track for a record-breaking year well above five-year averages, even if investor activity cools off in the months before Christmas.”

He also said: “However, with so much uncertainty globally and across the UK’s economy, diligence and valuations may become more challenging, which in turn may make it harder for private equity houses to move forward with conviction when looking for the best investment opportunities."

He added that houses those who have made the biggest strides in environmental, social and governance (ESG) agendas "continue to command significant market interest".