London investment bankers and lawyers have generated more than £1bn in fees from a 175% surge in UK stock market takeovers this year, reaching $132.9bn (£100bn) as overseas buyers acquire British firms at record pace, according to London Stock Exchange data. The dealmaking boom has pushed top-tier advisory pay packets into multimillion-pound territory, igniting a fierce political debate over City remuneration while millions of households grapple with the cost of living crisis.
Private Equity Floods the UK Market
A relentless wave of private equity cash and acquisitive American buyers targeting undervalued British businesses has driven the bumper advisory fees, official filings suggest. JP Morgan bankers have dominated the market, advising on 14 UK takeovers worth a combined $89.4bn (£67.6bn) this year. Slaughter and May led the legal advisory rankings over the same period.
The most lucrative transaction in the City this year is the £10.6bn takeover of lab testing group Intertek by private equity firm EQT. That deal alone is expected to generate upwards of £370m in advisory fees, shared among firms including Morgan Stanley, Barclays, Deutsche Bank, Goldman Sachs, JP Morgan Cazenove, and PJT Partners.
Did you know? The £10.6bn takeover of Intertek by EQT is projected to yield over £370m in fees for the banks and law firms orchestrating the transaction.
Soaring Pay Packets and Bonus Rule Changes
UK bankers are reaping the rewards of soaring bonuses following a major regulatory shift in late 2023, when the government scrapped the cap limiting bonuses to two times annual salaries. Major investment banks now set individual upward limits; Goldman Sachs permits top performers to collect up to 25 times their annual salary.
Meanwhile, lawyers at elite “magic circle” firms are regularly out-earning some bankers. Linklaters and Clifford Chance partners averaged payouts of £2.5m and £2.3m respectively in the year leading up to April, marking all-time highs for both institutions. A&O Shearman partners collected an average of £2.2m. At boutique advisory firm Evercore, senior managing directors averaged about £2m, with the highest-paid dealmaker taking home £16.2m.
Tax Lobbying and the Cost of Living Clash
The revenues arrive as the UK banking sector aggressively lobbies against proposals to raise taxes. JP Morgan boss Jamie Dimon issued direct warnings to Andy Burnham and Chancellor John Healey against increasing taxes on lenders ahead of the 28 October budget, a stance strongly echoed by industry body UK Finance. British lenders currently face a 28% corporation tax rate alongside a separate balance sheet surcharge.
Labor representatives argue the contrast between City windfalls and public hardship is stark. Charlotte Brumpton-Childs, national secretary at the GMB union, criticized financial brokers for collecting immense sums “while the people who keep this country moving struggle to make ends meet.” Trades Union Congress general secretary Paul Nowak renewed his call for a windfall tax on lender profits, arguing that institutions funding bonanza payouts for top executives can clearly afford higher public contributions.
Decline of London Stock Market Listings
Even as private equity buyers fuel a lucrative secondary market in takeovers, the broader UK stock exchange faces structural headwinds. Office for National Statistics figures from July showed total earnings growth including bonuses slowing to 3.9%, down from 4.1% in June. Concurrently, investment banks face declining revenues from sell-side research and flotation work as companies exit the London exchange faster than new ones arrive.
Professional services firm EY reported just seven stock market listings in the first half of the year, raising a modest £577m in total. However, recent announcements offer some relief; Airtel Money, the mobile money arm of Airtel Africa, confirmed plans for one of the largest UK stock market listings seen in years.
Frequently Asked Questions
How much have London bankers and lawyers made from takeovers this year?
Advisory fees paid to investment bankers, lawyers, and accountants working on UK stock market takeovers have topped £1.2bn, fueled by a 175% surge in deal value to $132.9bn (£100bn).
Why are City bonuses currently so high?
Bonuses have climbed significantly since the UK government removed the regulatory cap restricting bonuses to two times annual salaries in late 2023, allowing institutions like Goldman Sachs to pay top performers up to 25 times their annual salary.
What are the tax pressures facing UK banks?
British lenders currently pay a 28% corporation tax rate—higher than the standard 25%—plus a balance sheet surcharge. Banking executives have actively lobbied government officials against implementing further tax increases.
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