A new survey by Deloitte, has continued the recent trend of increased confidence in both deal activity and the prevalence of secondary buy-outs.
Secondary buy-outs are where one investment company sells its stake in a portfolio firm to another investment firm, activity that gives a good indication of the shape and direction of the wider business community.
Secondary buy-outs are expected to provide the largest source of new investment opportunities, surpassing trade sales as the main source of exits.
Mark Pacitti, corporate finance partner at Deloitte, said: "Despite the current wall of debt available to fund buy-out transactions, some uncertainty appears to exist within VCs over the level of debt funding available for transactions going forward."
"This sentiment may be contributing to the projected stabilisation at the current level rather than further growth in dealflow."
The survey found that transaction volumes are set to stabilise at current levels for the next six month, while 56% of VCs predict a further increase in portfolio exits during the next six months.
In terms of preferred sectors for new investment opportunities, the three usual suspects of support services, leisure and financial services topped the list, while healthcare - again a regular favourite - was also popular.
Pacitti added: "VCs expect secondary buy-outs to surpass trade sales as the most frequent exit route over the next twelve months, confirming the growing importance of secondary buy-outs as an exit route."
