Private capital – powering communities across the UK

Supporting success

The UK is home to an abundance of successful businesses: start-ups making incredible advancements in their sectors, family-run businesses catering to their communities, and home-grown, high-street stalwarts employing thousands of people right across our nations and regions. Behind many of these businesses is private capital – an industry that directly supports 2 million jobs nationwide. And in 2021 alone, over 1,300 UK companies were supported by the British Private Equity and Venture Capital Association’s members, receiving more than £17bn in funding, with over two thirds of these businesses outside London.

Spotlight on the North West

The North West is an exciting and dynamic business landscape, with leading universities and talented people eager to innovate. It is little wonder, therefore, that the region is the third largest hub for private equity and venture capital investment outside of London. In 2021, 127 companies in the North West saw £2bn of investment by private capital – or just over 11% of all funds deployed last year. But the support does not stop there. Private capital works in partnership with founders and entrepreneurial management teams, providing the handson expertise and long-term approach that enables companies to innovate, grow, and create jobs. In fact, of the 2 million total jobs supported by PE and VC, 171,000 of them are in this region. These are companies like Liverpool ChiroChem, a chemistry-based research organisation that supports the discovery and development of drug intermediates; Manchester’s Back2Work, which specialises in delivering intensive training courses to help the long-term unemployed return to work, retrain or reskill; and Blackpool’s Merlin Entertainments, the second largest operator of theme parks and visitor attractions worldwide. As these examples highlight, private equity and venture capital firms cover the last mile between UK financial services and the real economy up and down the country – they are invested in growth, innovation and people. And through active ownership of businesses, they deliver long term growth, which is not only good for the private capital funds and their investors, but local, regional and national economies as well.

Investing at the earliest stages

Private capital is often associated with big buyouts but, in reality, 9 in 10 UK businesses supported by the industry are SMEs. Companies at their earliest stages will find backing from venture capital; a driving force behind thousands of UK start-ups. In 2021 alone, BVCA VC members invested almost £1.8bn into

650 start-ups and small businesses. These businesses are often in technology sectors such as cyber security and SaaS (software as a service), but also in R&D intensive sectors like life sciences and deeptech (next generation technology), which drive our economic growth but also address prominent societal challenges, like climate change, or drive exciting advances in medical science. This investment is nationwide, with cities like Manchester, Leeds, Newcastle, Edinburgh and Belfast, among others, emerging as hotspots for venture capital firms to find innovative companies to support. There’s also a distinct correlation between VC investment and the UK’s world-class universities, with many startups beginning life as pioneering research projects that need a helping hand in commercialising and coming to market.

Private capital at work

It’s clear that private equity and venture capital are at work across the UK, backing individuals and communities to innovate, flourish and grow. If you’d like to find out more about how the industry is supporting your nation, region or constituency, or to visit a private equity or venture capital backed business there, please contact the BVCA on ExternalAffairs@bvca.co.uk