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14 January 2025
We asked some of our in-house experts from around the business to share 3 trends to look out for in 2025.
Melanie Saluja, Managing Director, Investment Banking
1. Geopolitical risks and political change are expected to continue to present both challenges and opportunities.
2. As interest rates continue to fall, UK companies will be focused on the prospects for further growth.
3. We expect strong corporate activity and investor engagement to continue in the UK and look forward to working closely with our clients to take advantage of opportunities.
Maurice Franks, Co-Head of Private Client Fund Management Sales
1. The recent Budget has resulted in reform to the AIM IHT rules, so investment managers will need to navigate the changing landscape along with any further reforms, such as changes to pensions.
2. We continue to see investors allocating more client funds into global equities, but there is still a strong focus and belief the UK represents good value, especially in the FTSE 350 universe.
3. There has been lots of consolidation in the wealth management community, but active client management remains a key focus and we continue to see strong engagement around our corporate access and research product.
Daniella McDonnell & Sarah de la Fuente, Co-Heads of Investor Relations
1. We are now seeing inflows into UK equities, giving fund managers more capital to deploy and representing a great opportunity for our corporate clients to increase focus on their investor relations activities.
2. With the UK continuing to look attractively valued, we are seeing an increase in attention from international investors looking to the UK for new investment opportunities.
3. Our AIM clients are once again keen to get back on the front foot with investors given the recent Budget didn’t adversely impact them as much as many had feared.
Ewan Lovett-Turner, Head of Investment Companies Research
1. 2024 was a record year for M&A in the Investment Companies sector. We expect this high level of corporate activity to continue in 2025.
2. More vocal shareholders and activist activity in the face of wide discounts are likely to be pivotal for the future of the sector.
3. Investment Companies will continue to offer access to less liquid asset classes, such as Infrastructure, Private Equity and Specialist Debt.
Ulick Burke, Director, UK Equity Sales
1. Despite outperforming NASDAQ Index in 2024, UK banks remain strong going into 2025 - earnings growth, visibility, compounding distribution potential, and attractive valuations.
2. UK corporates will need to navigate UK Budget reforms. Vulnerability to PE and US interest has increased, where firepower is bolstered by US deregulation.
3. Drag from UK equity outflows subside. After 41 consecutive UK equity monthly outflows, the first UK inflow was witnessed in November. Expect to see UK equity outflow headwinds ease in 2025.
Debt Advisory
Mike Beadle, Head of Debt Advisory
1. We have been pleasantly surprised by the increasing number of non-UK banks interested in building a UK mid-market franchise and we are helping borrowers develop these relationships well in advance of any financing event so that lenders are better able to move quickly when financing is needed.
2. ESG continues to be a key focus for lenders, though in the mid-market, we are seeing fewer facilities where interest rates are linked to KPIs and more focus on diligencing how borrowers manage these ESG risks.
3. While base rates have fallen, longer-term interest rates have been increasingly volatile, meaning that borrowers need to be very careful about when and how to lock in long-term funding costs, including pre-hedging.