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UK Circular Economy on the Rise

The number of UK-based circular economy-related investments increased by 30% in 2023, significantly outperforming the country’s M&A market, which saw a 17% drop last year. A new report published by accountancy firm BDO also noted that the deal value for circular economy-focused investments increased to £1.3 billion (US$1.6 billion) last year, from £879 million in 2022. Venture capital accounted for 58% of all 2023 transactions, followed by mid-market private equity, which accounted for one in five investments. “We’re excited by the level of activity in the sector and its future potential as businesses continue to create value, reduce waste and drive inefficiencies, as well as drive wider benefits for society and deliver against environmental goals,” said Rory McPherson, Deal Advisory Partner at BDO. Industrials and manufacturing benefitted the most from these investments, representing over a third of the deals in 2023. “ESG continues to move higher up the agenda for investors as they seek strong returns that also make a positive environmental impact,” said Todd Mills, Assistant Director for Circular Economy and M&A at BDO. “The economic benefits of investing in the circular economy are clear and compelling. Looking ahead, we expect to see increasing interest from trade investors, with high-quality businesses attracting premium valuations as the competition for assets hots up.” 

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