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BVCA Report on Investment Activity 2019

Publish Date 16 Jul 2020
Categories Industry Activity
The BVCA’s annual Report on Investment Activity shows the full breadth of the impact of private equity and venture capital on the UK economy. A total of 1,530 companies received backing in 2019, an increase of 15% on the 2018 figures.
1. Fundraising
  • Total fundraising in 2019 reached £47.59bn.
  • The number of funds raising new capital was 118.

Pension funds provided 38% of all capital raised followed by sovereign wealth funds (14%) and fund of funds (11%). Institutional investors from outside the UK contributed approximately 89%.

Buyout fundraising reached £41.01bn. Pension funds are the largest institutional investor in UK buyout funds contributing 40%, followed by sovereign wealth funds (15%), fund of funds (11%), and insurance companies (10%).

Venture capital fundraising reached £2.4bn. Private individuals contributed 19% to the total VC fundraising amount, followed by pension funds (15%) and fund of funds (13%).

Growth capital reached £3.22bn. Pension funds were the largest contributor at 29% followed by private individuals at 21%. This year’s report showed the continued flows of international sources of funds with circa. 89% of fundraising coming from outside of the UK. This is up from 86% in 2018 and 82% in 2017.

2. Investments
  • The total equity amount invested in portfolio companies in 2019 increased by 8% year-on-year to £22.33bn.
  • The number of companies receiving investment rose 15% to 1530.

Buyout investment increased by 5% year-on-year to £16.86bn. The number of companies backed increased by 9% to 226. Large buyouts accounted for 43% of the buyout market, followed by mega buyouts at 35%. In 2019 Small buyouts remained consistent with £407m invested and 90 companies backed.

Mid-market saw a slight year-on-year decrease of 9% at £3.4bn investing in 101 companies. Venture capital investment increased by 67% year-on-year to £1.65bn with 821 companies backed, an 18% increase. Seed investments increased to £87m in 2019. Early stage investments increased 80% year-on-year in size to £865m. Start-up grew to £210m, an increase of 79%. Later stage investments increased by 39% to £467m.

Growth capital investments increased by 12% to £3.63bn. 467 companies were backed, a 13% increase year-on-year.

3. Divestments
  • Around 512 companies were exited in 2019, a similar number to 2018.
  • By amount of former equity investments (divestments at cost), the total value was £8.19bn.

The most prominent exit routes by amount at cost were sale to another private equity and venture capital firm (36.2%), trade sale (28.1%) and repayment of preference shares (13.2%).

Buyout divestments represented 76% by amount at cost and around 32% by number of companies of all exits in 2019. Venture capital comprised around 25% of all divestments with 128 companies. The most prominent exit route was trade sale, which represented 24% of number of companies divested in 2019.

Growth divestments represented 16% of all exits by amount at cost and 38% by number of companies.

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