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December 23, 2024
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Private Equity

Opinion: ‘Driving Growth – The impact of private capital in the North West’


Private capital, which is generally considered to be made up of private equity and venture capital investment, has a tremendous impact on the economy.

In 2022 (latest available data), over £27.5 billion was invested into UK companies through PE and VC firms. £11.5bn was invested by foreign funds, showing the allure of UK business’s potential.




This capital matters because it flows overwhelmingly into small- and medium-sized enterprises (SMEs), which are typically fast-growing and create employment as they innovate and mature.

In fact, in the North West alone, private capital invested nearly £1 billion in 2022, over 90 per cent in SMEs and directly supporting 188,000 jobs across the region, ten per cent more than the previous year. A quarter of that amount (£256 million) was invested into technology businesses, demonstrating the breadth and attractiveness of the technology ecosystem across the North.

The region’s appeal is partly down to its impressive number of privately owned growth businesses, strong infrastructure and large university base. This attracts investors and advisers to create a local ecosystem for backing ambitious businesses.

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This is positive for the region as a whole since private capital can accelerate growth, with data from industry association InvestEurope estimating that businesses backed by PE and VC added jobs at circa 6.5 per cent year-on-year to 2021, versus 1.2 per cent for Europe as a whole.

This enhanced growth will be down to a myriad factors, not least the sector expertise and functional support investors provide to amplify the impact of their funding through operating partners and value-creation teams.



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