US Election: strategic due diligence necessary for UK investors in a shifting U.S. market landscape
As we absorb the outcomes of the US election, UK private equity will be taking note of potential policy changes that could impact markets across the Atlantic.
The UK is already feeling the effects of the Republican victory: confirmation of the result triggered a rally in the dollar, causing the pound to drop by 1% and planned changes to US policy is likely to impact deal flow, valuations, and investment strategies here in the UK. For mid-market investors, the current political landscape in the US could influence everything from financing conditions to the regulatory environment in sectors like technology, healthcare, and renewable energy — areas that are already at the heart of many UK PE portfolios.
A key area of concern for UK mid-market PE firms is the potential shift in global interest rates, with Trump’s economic agenda likely to focus on growth acceleration through deregulation, lower tax policies and tariffs. These moves could contribute to inflationary pressures, forcing central banks, including the Bank of England, to increase interest rates to stay abreast with international trends. Any ripple effects on UK borrowing rates could tighten financing conditions for PE transactions, particularly for leveraged deals.
For UK firms with US market interests, Trump’s promise to deregulate and foster a more business-friendly environment could create opportunities, though they may also find that their US competitors face fewer compliance costs and constraints. During Trump’s first term, deregulation was met with frequent reversals and legal challenges which led to confusion and created inconsistencies between federal and state level. This was especially challenging for sectors needing long term clarity such as energy, finance, healthcare and infrastructure – a challenge that is likely to repeat itself.
It is therefore now more important than ever for UK PE firms looking to invest in UK companies with existing or planned US interests to adopt a flexible and well-informed approach, prioritising comprehensive commercial due diligence and strategic planning to navigate the potential volatility and ensure their investments are resilient to the shifting landscape.
As CDD experts, we can help our clients identify specific risks and opportunities in the US landscape that may affect target/portfolio companies. Our approach combines a deep understanding of the US regulatory and economic context with local insights that matter for UK investors, enabling us to deliver actionable intelligence for strategic decision-making. Deep sector-specific knowledge also allows us to interpret political changes within industry contexts, adding insight into how these shifts might affect customer preferences, product viability, and growth projections. This ensures our clients are not only resilient to global changes but also well-positioned to capitalise on new opportunities arising from policies under the second Trump administration.
Speak to a member of the team about the impacts and opportunities discussed.
Gabriel Leggo
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+44 7772 623 607