The growth of the UK private equity market is outstripping that of its international competitors, new research shows.
Despite global private equity investment being down by 25 per cent to $93 billion (£59.4 billion) in the first half of 2012, the UK registered a £8 billion increase in buy-outs.
The £8 billion surge represents a 38 per cent increase over the second half of 2011. The UK had previously seen a decline in investments during 2011 but has bucked the trend for the first six months of the year.
Chris Cummings, chief executive of TheCityUK, says that the global private equity sector has seen a ‘significant’ downturn in activity, a concerning issue due to its importance for a key element to economic recovery, growth businesses.
He adds, ‘However, there is some good news for the UK, where the private equity industry is starting to see improvement and remains second in size only to the US.
‘The UK’s importance as a private equity hub reflects its continued attractiveness as a home to a broad range of funds, as well as offering access to a deep pool of private equity expertise.’
In the Britain, London has accounted for 44 per cent of all UK investments in 2011, wroth £2.9 billion. The value of deal activity in the rest of the South-East jumped to 17 per cent, up from 14 per cent in 2010.
Findings from TheCityUK in its Private Equity 2012 study shows that private equity funds managed in the UK currently back around 3,800 companies, employing 515,000 people in the UK and 1.2 million around the world.
Global fundraising for the first half of 2012 hit $130 billion, down by a fifth over the same period in 2011. The report concludes that the majority of large private equity funds available for investment are a result of an accumulation of funds by private equity firms in previous years, which were not used due to the economic slowdown.