Quarterly Review – October 2020

The Quarterly Review is a new publication designed to demonstrate the significant impact of private equity and venture capital on the UK economy using the latest data and research.

This is an extraordinary time for companies across the country. COVID-19 and the impending end of the Brexit transition period are both unique events, and the two combined have created an unprecedented environment of uncertainty and trepidation.

The need for investment is huge. The need for business expertise is huge. On the following pages, using the BVCA’s own research, we will be showing how private equity and venture capital can play its part in fuelling the recovery.

With almost 4,300 UK businesses currently backed by our industry, it already has a significant footprint in the country’s economy. Last year we invested more than £10 billion into around 1,200 companies. Eighty-seven percent of these – more than 1,000 – were small and medium sized enterprises, operating in a range of sectors across the UK. We saw more than £1.3 billion invested into the North of England, £1.1 billion in the South West, and £1 billion in the Midlands.

All these facts and more can be found in our Report on Investment Activity, an annual study of UK deals, fundraisings and exits, and from which selected highlights are presented here. Private equity and venture capital are about more than just investment of course. Their success has always depended on a long-term philosophy and close engagement with management teams to improve businesses and drive innovation. In so doing, the value of the company is enhanced so that when it comes time for the private equity or venture capital fund to sell its stake, it is able to make a return on its investment to the benefit of institutional investors across the world.

Over the last 10 years, private equity and venture capital funds managed in the UK have generated a return of 14.2%. In comparison, the FTSE 100 delivered 7.4% and the FTSE 250 12%. These results - presented in our annual Performance Measurement Survey - show why institutional investors from across the world continue to invest in our industry.

Both of the studies provide robust evidence of how private equity and venture capital are driving business growth and industrial progress, and making a significant contribution to returns for the benefit of millions of pensioners and other savers. These attributes will be crucial in powering the economic recovery, and ensuring the UK remains a global leader for innovation, business and investment. 

 

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