PRIVATE equity firms are on course to execute a flurry of deals over the summer as a “new normal” is ushered in following the triggering of Article 50, according to a magic circle law company.

Charles Hayes, partner at Freshfields Bruckhaus Deringer, said last year’s deal-making lull following the Brexit vote has given way to heightened activity now that Britain has officially begun divorce proceedings with the EU.

The comments came as the number of London private equity (PE) deals reached its highest monthly level for more than a year in March. Figures sourced from industry data provider Preqin showed the capital’s deal count had climbed 78 per cent to 16 last month, up from nine in January.

Hayes said PE firms were ready to make investments and were eyeing opportunities in the pharmaceutical and financial services sectors.

He said: “We saw a hiatus after the EU referendum last year. Since then, a lot of private equity firms have priced in Brexit. They knew Article 50 was coming, and now the notice has been served, we have entered a new normal with higher deal activity. We are expecting an uptick after Easter, with a lot of processes now under way, agreements in principle and debt widely available.

“By pricing in Brexit, PE firms are able to commit capital and execute deals they have had in the pipeline.

“PE investors have shown themselves consistently able to deploy capital in varied markets. They have a clear line of vision, they have adjusted to the new normal and they’ve been able to price the risk going into Article 50 territory.”

L’Oreal’s sale of The Body Shop could be driven through in the summer, with reports suggesting 15 private equity firms are mulling a bid. The struggling British toiletries and skin care retailer, which employs 22,000 people in 66 countries, is believed to be on the market for around €1 billion (£848 million).

Hayes said: “We have seen a lot of interest in L’Oreal’s sale of The Body Shop. It will be interesting to see how that plays out in the summer. While it is an international business, The Body Shop’s significant presence in the UK will make the deal an interesting barometer of confidence levels in the British high street.”