In its latest annual investment activity report – which collates data from its 179 members – the BVCA found that £6.8 billion of this cash was invested in UK businesses. A further £4.15 billion was channelled towards continental Europe, while US companies received £479 million from UK backers.
In terms of value, management buyouts and buy-ins dominated the landscape, snaring a combined £4.48 billion – even though only a modest 24 per cent of the deals completed could be attributed to this category. A further £1.95 billion was committed as expansion capital (44 per cent of all deals), with the remaining £382 million going to early-stage businesses (38 per cent of deals).
As for the sector breakdown, some 360 of the 1,307 UK companies securing investment last year were classified as technology businesses and a further 251 were healthcare firms. Despite their considerable presence in terms of deal numbers, however, these sectors had a far smaller impact value-wise. A staggering 46 per cent of all UK firms receiving finance were in these sectors, yet this equated to just £911 million in value terms. By way of contrast the 77 travel and leisure sector businesses benefiting from private equity investment in 2005 raised £1.33 billion between them and 79 general retailers secured £1.19 billion.
2005 was also a successful year in fundraising terms with UK private equity houses raising £27.3 billion (up from £3.3 billion in 2004, reflecting shifts in the fundraising cycle). As in previous years the majority of this cash was actually raised from overseas investors, with the US contributing 45 per cent of and continental Europe 22 per cent. Just 21 per cent of the money raised came from UK investors.