Investors focused on UK companies are reinforcing the global message: transformation first, growth second

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What investors are telling us

Our latest UK cut of PwC’s Global Investor Survey shows respondents navigating a low‑growth environment while raising expectations of the companies they back. They see companies as highly exposed to cyber threats, technological disruption, inflation and macroeconomic volatility.

Rather than retreating, they want leaders to accelerate technological transformation, AI adoption and business‑model agility. UK M&A data reinforces this: deal volumes are down, but values and average deal sizes are rising as capital concentrates around higher‑conviction opportunities. The message is clear: transformation has moved from optional to essential.

A muted macro-outlook, alongside rising urgency to act

Investors focussing on UK companies are not expecting a macro‑led upswing to solve their challenges. Most anticipate subdued economic conditions. Alongside this, they highlight high exposure to cyber threats, technological disruption, inflation, macroeconomic volatility and geopolitical conflict.

UK CEOs report similar headwinds. Although confidence in the domestic economy has softened, UK M&A trends show a more nuanced picture: deal volumes are down, but total deal values and average deal sizes are rising as capital concentrates into fewer, higher‑conviction opportunities.

In this context, waiting for conditions to improve is no longer viable. Respondents expect UK companies to act with purpose now — using M&A, partnerships and transformation programmes to position for long‑term resilience and growth.

Technology, AI and sector signals

Respondents see a direct link between risk and innovation. Cyber and technological disruption are not just threats to be controlled; they are also catalysts for transformation and new sources of value.

From the UK Investor Survey:

Beyond technology, respondents highlight strong interest in power and utilities, asset and wealth management, health services, and aerospace and defence — sectors combining infrastructure, resilience and long‑term capability.

Capital is concentrating in organisations with AI‑ready platforms, data‑rich business models and clear, scalable value‑creation plans.

Top sectors for investment (next 3 years) shared by those who invest in or cover UK companies
 

Reinventing the business model across sectors

As industries converge, investors are increasingly drawn to companies that compete across traditional sector boundaries. They see cross‑sector business models as better able to access new pockets of growth and less exposed to disruption.

In a scenario comparing two otherwise similar companies, one focused and one expanding across sector boundaries:

• 78% of respondents who invest in or cover UK companies say the cross‑sector company has more growth potential (vs 11% for focused).
• 70% say the focused company is more likely to be disrupted.
• On average, would allocate $65 out of $100 to the cross‑sector company, and $35 to the focused one.

UK CEOs are already moving this way, with more than half entering new sectors in the past five years. UK M&A activity mirrors this shift, clustering around technology, financial and professional services, and energy‑transition ecosystems.

For boards, the implication is clear: cross‑sector reinvention and disciplined dealmaking are becoming differentiators.

Transparency, resilience and where capital is going

Respondents investing in UK companies want clearer insight into how they are transforming, particularly in areas where risks and opportunities are accelerating.

They place high importance on understanding:

• how AI is reinventing business models
• AI strategies, policies and risk frameworks
• AI’s impact on performance

Yet only around one‑third feel they receive sufficient disclosure today.

• Technological transformation (92%)
• Climate adaptation (86%)
• Business‑model agility (73%)

Overall, capital is flowing to companies that enter the market with well‑prepared strategies, strong governance and evidence‑based transformation plans.

Respondents are already embedding non‑financial indicators such as competitive advantage, industry trends, innovation and business‑model agility into their valuation models. But they also highlight a pronounced disclosure gap at a time when scrutiny is rising.

In the deals market, this is already influencing outcomes. Companies that arrive with well‑prepared, clearly evidenced strategies and strong governance attract more interest and stronger valuations. Those lacking clarity are struggling to convert.

Transparency and resilience have shifted from “nice to have” to prerequisites for attracting and retaining capital.

A UK playbook for the years ahead

Across our investor, CEO and M&A insights, a consistent UK narrative emerges:

• Transformation now matters more than timing the cycle. Investors want to see evidence of progress today, not just plans for tomorrow.
• AI and technology must be embedded across the enterprise. AI is already lifting productivity and profitability in many companies; UK businesses need to scale AI from pilots to enterprise‑wide change.
• Cross‑sector business models are becoming a source of competitive advantage. Investors favour companies that can operate across traditional sector boundaries and participate in emerging ecosystems, reflecting broader shifts in the UK economy as financial, professional and technology services increasingly converge.
• Transparency underpins trust. Clear metrics and narrative around AI, sustainability and resilience are now integral to valuation and access to capital.
• Conviction wins. Capital is flowing to organisations that come to the market with well‑prepared, evidence‑based transformation journeys.

For investors, policymakers and business leaders, the conclusion is clear. The UK can remain one of the world’s most investable markets in an era defined by reinvention, provided organisations rise to meet the expectations being set by investors today.