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Private capital industry calls on political parties to maximise the UK’s investment potential

Publish Date 8 May 2024
Categories News
  • The BVCA calls for a pensions investment roadmap, new industrial strategy and stable and competitive tax framework to increase investment in the UK
  • New figures show private equity and venture capital invested £20.1bn in UK businesses in 2023, down from £29.7bn in 2022
  • London remains top destination for private capital investment, but majority invested outside the Capital
The British Private Equity and Venture Capital Association (BVCA) has called on political parties to adopt policies which encourage investors to back UK businesses with the capital they need.

This comes as the BVCA’s latest report on investment activity shows investment by private equity and venture capital (private capital) in UK businesses fell to £20.1bn in 2023, down from £29.7bn in 2022.

Ahead of the General Election, the BVCA has outlined how the next Government could bolster economic growth and attract inward investment through private capital in the UK. Key recommendations include producing an action plan for pension investment to unlock additional investment and generate higher returns for savers, publishing an industrial strategy to provide long-term certainty for investors, and prioritising a stable and competitive tax framework.

London remains the leading destination for private capital, but almost six in 10 (58%) of businesses receiving venture capital or private equity investment were located in the nations and regions outside the capital. Locations receiving most investment were London (42%), the South East (10%), North West (7%) and the East of England (7%). The BVCA has stated that investment in nations and regions could be even higher with improvements to infrastructure and planning decisions.

The UK continues to be a hub for technology, built on world-class research and development, a strong talent pool and connectivity. In 2023, tech-focused businesses accounted for two fifths (39%) of total private capital investment. To further support the growth of these businesses, the BVCA is calling on the next Government to provide a long-term R&D strategy and expand incentives which support groundbreaking ventures.

The private capital industry represents a significant part of the UK economy. In 2023, 6% of UK GDP was directly generated by businesses backed by private capital - or £1 in £10 of private sector GDP.

Michael Moore, Chief Executive of the BVCA, said:

“Private capital is a key partner for driving growth in every nation and region of the UK, but investment by the industry could be even greater with the right policy environment in place.

“2023 saw a fall from the highs of 2021 for our industry, but it still backed UK businesses to the tune of £20.1 billion. Parties aspiring to form the next government should be guided by the principles of a stable economy, world class standards that are proportionally applied, building on competitive advantages to maintain scale and breadth of talent, and predictable policy frameworks for growth sectors.”

Media contacts

James Gribben, BVCA: jgribben@bvca.co.uk / 07854897974

Notes to editors

About the British Private Equity & Venture Capital Association

The BVCA, as the representative body for private equity and venture capital, connects institutional investors, fund managers, companies, advisers and service providers together, with our membership currently comprising more than 600 businesses from across the private capital ecosystem. This includes more than 250 PE and VC firms, 100 institutional investors and 200 professional services firms.

Private capital drives growth – providing the funding, expertise and long-term view that enables companies to innovate and flourish. Our mission is to advocate the transformative nature of the private equity and venture capital community.

Data sources

The BVCA collects data from members on an annual basis covering fundraising, investments and divestments in each calendar year. All BVCA members who hold General Partner membership and are primarily based in the UK are required to complete the investment activity survey. To be included in the current year survey, a firm had to be a full GP member of the BVCA as at 1 January 2024. In 2022, the BVCA took the decision to widen the scope of captured activity to monitor wider market trends more accurately. The activity dataset now includes the following categories of data:

  1. Activity data provided by private equity and venture capital BVCA member firms.
  2. Activity data provided by non-member private equity and venture capital firms to other national associations that are part of the European Data Cooperative (‘EDC)’.
  3. Activity data of private equity and venture capital firms that was obtained from publicly available sources.

The BVCA together with other national associations have supplemented data provided by members and used estimates where appropriate.