ASI's McCoy on the perceived risk factor of Britain's plc

The increase of M&A activity in the UK year to date is dramatic with take-outs announced across the market by size in a variety of sectors.

The bullish aspect of this activity is it is indiscriminate to size and sector, and the broad spread of approaches suggests animal spirits are high.  We think this is the result of high access to capital following many years of central bank expansion of balance sheets and capital trickling into more pro-risk behaviour by market participants.  Well-capitalised companies are taking advantage of low borrowing costs. The risk associated with acquired businesses is often not about the long-term potential, but transitory impacts on the company from a point in an economic cycle or ability to...