According to new research by Barclays and Beauhurst, of every four pounds injected into UK businesses via private equity funding, three are caused by foreign investors during May-July. The reports indicate the quarter alone will see private equity flows into UK companies hit at £3.5bn, 3% more than the previous quarter.
While most of the private equity deals stay within UK investors, what is worthwhile to note is that more than 60% of the amount invested during the first half of 2024 has come from foreign investors. And hence, it looks as it is the case, as it looks like more loads are carried by UK investors in volume but when it comes to value, the bigger loads are borne by foreign investors.
Private equity means funds that gain control of a company. It is fast becoming popular because companies are preferring to go private for long periods of time.
Private markets’ head Shenal Kakad of Barclays Private Bank said the United Kingdom has maintained a significant lead in private market activity within Europe, a circumstance she expects will continue.
Regional growth in private equity funding was more pronounced in northwest England, which was mostly driven by a £500 million investment in the Cheshire-based environmental consultancy, RSK Group. The above funding came from a fund consortium and is the region’s largest equity funding gain in the period under consideration.
Private equity funding increases as scrutiny grows. Private equity has grown steadily with increasing influences on financial stability in the UK. As such, the Bank of England is evaluating what are considered risks from private equity. Private equity funds significantly finance businesses and re-invest elsewhere. Some of the notable deals are US private equity Apollo Global Management’s acquisition of British parcel delivery company Evri for £2.7bn and Thoma Bravo’s deal worth £4.3 billion to acquire UK cybersecurity firm Darktrace. Barclay’s study showed that, by July, 300,000 more companies than the year before are currently registered in the UK, with a record-breaking 5.4 million.
According to Hannah Bernard, head of business banking at Barclay, “Businesses have become more resilient, agile, and more adaptable to change.” She also added that support for technologies like advanced manufacturing and life sciences contributed to the growth.
