Will surge in M&A activity benefit investors?

M&A

With as much as £200bn of new activity expected, a boost in M&A will prove to be an attractive backdrop for UK equities, writes Henry Dixon of the Matterley Undervalued Assets fund.

The other day I heard someone use the phrase “equity bull market”. I had to disagree with them. Bull markets to my mind can be characterised by overvaluation, mass participation and heightened M&A activity and none of these factors are at play today. With valuation in mind a look at the long run price-to-earnings ratio shows we are close to an all-time low. With participation in mind, a valuable insight into retail buying trends can be obtained from the IMA. The vogue investment remains Corporate Bond and Mixed Investment, which is what most of us will know as cautious managed. At the...