Private capital firms eye increasing investment in attractive UK market
Private capital firms view the UK as an increasingly attractive destination for investment as the Chancellor pledges to assist firms in raising capital.
According to new research from the British Private Equity and Venture Capital Association (BVCA), four in 10 private capital investors view the UK as a good location to invest and build a business.
Similarly, a third of dealmakers also believe they are likely to invest more in the next five years, compared to just one in five who expect to reduce their investment.
Private capital investment has surged in recent years, with a 44 per cent year on year increase in 2024 to £29.4bn, with an additional £190bn in UK managed private capital ready to be deployed into the market.
Over 35 per cent of investors credited the strengthening domestic economy with making the UK a desirable place to invest, while 38 per cent noted the improved regulatory environment, due to the government’s push to increase growth and innovation.
The UK’s skilled domestic workforce and renewed clarity around the long-term approach to taxation also made the market attractive to private investors.
Chancellor pledges change
Ahead of her conversation at the BVCA Summit later today, Chancellor Rachel Reeves pledged to aid firms aiming to raise capital.
Reeves said: “Private investment is central to unlocking growth.
“More companies planning to step up investment here underlines Britain’s strength as a place to build long-term success.
“We are making it easier for firms to raise capital and for investors to back them… ensuring the UK remains one of the most attractive places in the world to invest, scale and succeed.”
Most recently, Reeves laid out plans to boost UK private investment in the Leeds Reforms, through cutting unnecessary red tape and encouraging investors to take more risks.
Autumn Budget support
Despite growing investor confidence, the BVCA is calling for the government to increase its support in order to cement Britain as a leading industry hub.
Michael Moore, chief executive of the BVCA said: “The UK can be at the forefront of a new wave of global investment, but to do so, the Government must help ensure that the UK is the most attractive destination it can be.
“Private capital already supports jobs, backs growth and invests across all the nations and regions of the UK, but this industry can go even further with the right conditions in place.”
Ahead of the Autumn Budget on 26 November, the BVCA urged the Treasury to reform the tax relief system, noting it fell short of “channeling investment where it is most needed”, to further drive regional investment and stimulate wider growth.
Meanwhile, the industry body also voiced the need to champion regulatory innovation through fast-tracking approval in order for high-potential sectors, including defence and AI while encouraging the acceleration of reforming pensions to ensure funds are invested efficiently.
In particular, the body has called for the creation of an initiative, dubbed New Opportunities for Venture and growth Acceleration, which would create a market of private capital funds specially appointed for DC schemes to facilitate investment into important sectors
Moore said: “Private capital is standing by to invest even more into Britain’s future, but only if, as a nation, we adopt a system that is pro-growth, pro-innovation and globally competitive.”