2019 Report on Private Equity and Venture Activities in the United Kingdom: £ 22.3 billion invested
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BVCA is the private capital association in the United Kingdom and has published data regarding market activity in 2019.
UK private equity and venture capital investment reached £22.33 billion in 2019, an increase of £1.6 billion on the previous year, new research from the BVCA shows.
Published today, 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.
Key report highlights include:
Venture capital investment increased by 67% year-on-year to £1.65 billion with 821 companies backed, an 18% increase.
The South West of England received the largest amount of private equity and venture capital investment (11.6%) outside of London and the South East, followed by the North West (9.6%) and the West Midlands (7.8%).
The technology sector saw the largest number of deals and investment in 2019, accounting for 37.1% of all companies, and 26.8% of total investment.
UK private equity and venture capital funds raised £47.59 billion in 2019.
Pension funds provided 38% of all capital raised followed by sovereign wealth funds (14%) and fund of funds (11%).
Raising during the year was £ 47.6 billion, up from 2018 when it was £ 34.1 billion. 118 operators were active in fundraising. The origin of the capital was almost exclusively foreign, as non-UK investors contributed 89% of the total. Pension funds, which provided 38% of the capital, were the primary source of funding, followed by sovereign wealth funds (14%) and funds of funds (11%).
Total investments in 2019 grew by 8% compared to 2018, reaching over 22.3 billion pounds. The companies subject to investment also increased, which were 1,530 (+ 15%).
Looking at the type of operations, the buy outs totaled almost 17 billion pounds, distributed over 226 companies. Large buy outs accounted for 43% of these, followed by mega buy outs with 35%. Mid-market investments of £ 3.4 billion distributed over 101 companies fell by 9% compared to 2018. The venture capital sector showed 67% growth over the previous year, reaching nearly 1.7 billion pounds out of 821 companies.
Finally, moving on to divestments, it is noted that over 500 companies have left the operators' portfolios, in line with previous years. The total divested, calculated at the cost of equity investments, was around £ 8.2 billion. The preferred exit channel, in terms of amount, was that of selling to another private equity operator (36%), followed by selling to an industrial operator (28%) and repayment of preference shares (13%).