Private Investment in the United Kingdom increased to 3.90 percent in the first quarter of 2025 from -1.90 percent in the fourth quarter of 2024. This dataset provides - United Kingdom Business Investment- actual values, historical data, forecast, chart, statistics, economic calendar and news.

In 2023, the majority of private equity investments in the United Kingdom (UK) involved companies in the ICT sector (communications, computer and electronics), which accounted for 26.3 percent of the total. Other popular sector for private equity investments in the UK were business products and services, consumer good and services, and biotech and healthcare sectors.

The total value of private equity investments in portfolio companies in the United Kingdom (UK) came to 30.96 billion British pounds in 2023. The majority of investments during that year were focused in buyouts, which include the acquisition of companies by purchasing majority or controlling stakes. These transactions are financed through a mixture of equity and debt.

Detailed breakdown of business investment by industry and asset, in current prices, chained volume measures, non-seasonally adjusted and seasonally adjusted.

Key information about United Kingdom Investment: % of GDP

• United Kingdom Investment accounted for 18.2 % of its Nominal GDP in Sep 2024, compared with a ratio of 18.3 % in the previous quarter.
• UK investment share of Nominal GDP data is updated quarterly, available from Mar 1955 to Sep 2024, with an average ratio of 18.8 %.
• The data reached an all-time high of 26.2 % in Mar 1989 and a record low of 12.9 % in Jun 2020.

CEIC calculates Investment as % of Nominal GDP from quarterly Nominal Gross Capital Formation and quarterly Nominal GDP. Gross Capital Formation is calculated as the sum of Gross Fixed Capital Formation, Changes in Inventories and Acquisition less Disposals of Valuables. Office for National Statistics provides Nominal Gross Capital Formation in local currency and Nominal GDP in local currency.


Related information about United Kingdom Investment: % of GDP

• In the latest reports, UK GDP expanded 0.2 % YoY in Mar 2023.
• UK Nominal GDP reached 786.4 USD bn in Mar 2023.
• Its GDP deflator (implicit price deflator) increased 6.6 % in Dec 2022.
• UK GDP Per Capita reached 45,308.8 USD in Dec 2022.
• Its Gross Savings Rate was measured at 16.4 % in Sep 2024.

The UK is the largest European centre for the management of private equity (PE) investments and funds, second only to the US in terms of global importance. PE firms pool investment funds or use leverage to purchase other companies. Their goal is to improve a company's performance by introducing managerial and operational changes, before selling the company for a profit. More CEOs are wanting to retain control of their companies, increasing the number of minority stake buyouts. PE firms profit from management fees, calculated as a percentage of AUM, and performance fees on the total return from the invested company's IPO or sale to another company. Revenue is expected to grow at a compound annual rate of 6.6% to £4.6 billion over the five years through 2024-25, including growth of 4.9% in 2024-25. Following a short-lived halt in PE dealmaking at the start of 2020 following the COVID-19 outbreak, PE buyouts skyrocketed in 2021-22 due to higher levels of dry powder and low interest rates. Despite strong fundraising in 2022-23 as investors sought higher yields, PE activity slowed amid rising interest rates and a gloomy economic outlook, hitting deal volumes. Conditions only worsened in 2023-24 as the higher base rate environment, spiralling inflation and geopolitical tensions incited significant fundraising challenges and clobbered investment activity, hurting revenue. The macroeconomic environment is set to improve in 2024-25, driven by the prospect of further rate cuts and investors upgrading growth prospects, lifting deal activity. Revenue is forecast to grow at a compound annual rate of 7.2% to £6.5 billion over the five years through 2029-30. In the coming years, private equity firms will focus more on optimising operational performance and driving inorganic growth amid the high base rate environment and inflation, a sharp contrast to the expansion-driven growth experienced over the past decade. ESG will also be on their agenda, realising that significant value can be achieved from the investment strategy. Brexit has proven detrimental to domestic PE firms, but this could change depending on how effective the government's regulatory divergence is. Growing competition from alternative investment vehicles will also hurt revenue growth.

Number of Businesses statistics on the Private Equity industry in United Kingdom

United Kingdom GG: Net Investment: Capital Grants from Private Sector data was reported at 697.000 GBP mn in Mar 2018. This records an increase from the previous number of 606.000 GBP mn for Dec 2017. United Kingdom GG: Net Investment: Capital Grants from Private Sector data is updated quarterly, averaging 39.000 GBP mn from Mar 1946 (Median) to Mar 2018, with 289 observations. The data reached an all-time high of 6,479.000 GBP mn in Dec 2008 and a record low of 0.000 GBP mn in Dec 1975. United Kingdom GG: Net Investment: Capital Grants from Private Sector data remains active status in CEIC and is reported by Office for National Statistics. The data is categorized under Global Database’s UK – Table UK.F007: ESA 2010: Public Sector Finances: Transactions: General Government.

The statistic illustrates the total amount of investments of the private equity companies based in the United Kingdom (UK) from 2007 to 2016. Private equity is the OTC provision of equity capital through private or institutional investments with the participation of companies in another company for a limited time in order to generate financial benefits. It can be seen that total private equity investments fluctuated overall during the period under observation, reaching a value of over 15.2 billion euros as of 2016. The largest total value of private equity investments was found in 2007, when total private equity investment of more than 35 billion euros was recorded.

In 2023, the number of companies in the United Kingdom (UK) that received private equity amounted to 1,796. Moreover, over 1,000 companies to receive a form of private equity in 2023 was through venture capital investments.

In 2018, the number private equity (PE) investment funds through venture capital in the United Kingdom (UK) amounted to 145. In 2018, more than 1.3 thousand companies received private equity investment in the UK.

Sector and asset breakdowns of gross fixed capital formation (GFCF), including business investment and revisions.

The European private equity (PE) funds market is experiencing robust growth, projected to reach €214.95 million in 2025 and maintain a Compound Annual Growth Rate (CAGR) of 9.56% from 2025 to 2033. This expansion is driven by several factors. Increased availability of capital from both institutional and high-net-worth investors fuels investment activity. Furthermore, a favorable regulatory environment in several key European markets, coupled with a growing number of attractive investment opportunities in sectors like technology, healthcare, and renewable energy, contributes significantly to market growth. The market is segmented by investment type (large, mid, and small-cap) and application (early-stage venture capital, private equity, and leveraged buyout). Large-cap investments currently dominate the market, but the mid and small-cap segments are demonstrating impressive growth potential, particularly driven by the burgeoning technology sector across Europe. Competition among established players like Apax Partners, CVC Capital Partners, and Permira, as well as emerging firms, is intense, leading to innovative investment strategies and a focus on value creation for portfolio companies. While economic downturns could pose a restraint, the long-term outlook for the European PE market remains positive, underpinned by a strong entrepreneurial ecosystem and ongoing demand for private capital. The geographical distribution of investment within Europe shows variation, with the United Kingdom, Germany, France, and Switzerland representing major hubs. However, other countries within the "Rest of Europe" segment are showing increasing activity, suggesting a wider geographic diversification of investments over the forecast period. This expansion into less traditional markets indicates the growing confidence in the overall European economic outlook and the availability of lucrative opportunities beyond established financial centers. The consistent influx of international investment, coupled with strong domestic PE activity, ensures a healthy and competitive market environment, promising further expansion in the years to come. The diversification within the investment types and applications within the market will continue to shape its growth trajectory and attractiveness for both investors and entrepreneurs across Europe. Recent developments include: December 2023: Apax Partners LLP, a prominent private equity firm, completed the acquisition of OCS from Charme Capital Partners and Finwave from the Lutech Group. This strategic move solidifies Apax's position as a leading player in the European financial software market.February 2023: Oakley Capital raised a record EUR 2.85 billion (USD 3.13 billion) for its fifth flagship fund. Oakley continues to invest in long-term trends that have driven growth and profits during various economic cycles, such as the migration of businesses to the cloud, the shift of consumers toward online shopping, and the increasing global demand for quality and affordable education.. Key drivers for this market are: Favorable Regulatory Reforms, Including Tax Incentives and Investor-Friendly Policies, Growing Number of Startups and Innovative Companies. Potential restraints include: Favorable Regulatory Reforms, Including Tax Incentives and Investor-Friendly Policies, Growing Number of Startups and Innovative Companies. Notable trends are: Increasing Merger and Acquisition (M&A) Activity with Private Equity Firms.

The Venture Capital industry has seen healthy growth over the past decade, as investors increasingly turn to private markets, seeing the benefits of greater returns and portfolio diversification that a venture capitalist can offer. From being a niche area of finance consisting of old-school investors and investment bankers, venture capital has evolved to allow investors to capitalise on new technologies and innovations that could disrupt and shape the future. This phenomenon has become all too common in recent years, with the rapid pace of technological change giving rise to exciting advancements like generative AI. Venture capital revenue is projected to grow at a compound annual rate of 17.6% over the five years through 2024-25 to £545.8 million, including an estimated growth of 13.9% in 2024-25. The Venture Capital industry experienced unprecedented growth in 2021-22, brought about by low interest rates and sky-high investor confidence amid the tech boom that followed the COVID-19 outbreak. Many venture capitalists also had eyewatering amounts of dry powder from limited investment during the first half of 2020-21. Although showing signs of slowing amid numerous economic headwinds like rising interest rates and uncertain economic conditions, venture capitalists continued to perform strongly with VC investment recording its second-highest year ever in 2022. VCs in 2023-24 fared less well, with deteriorating economic conditions and further rate hikes making investors nervous, hitting VC investment and deal volumes. 2024-25 marked a turning point with VC investment more than doubling in the first quarter, according to KPMG, as improved economic growth prospects and interest rate cuts prompt investment towards SMEs. Venture capital revenue is projected to swell at a compound annual rate of 11.7% over the five years through 2024-25 to £947.5 million. With macroeconomic challenges persisting, VCs are set to place a greater emphasis on companies with robust fundamentals, contrasting the ‘growth at all costs’ approach seen following the COVID-19 outbreak. Excitement around generative AI will persist, with many VCs rushing to secure the largest deals. Developments in platform technology, giving retail investors greater access to private markets, will also support fundraising activity, pushing up revenue in the coming years.

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Private Equity Market Size 2025-2029

The private equity market size is forecast to increase by USD 885.7 billion at a CAGR of 9.5% between 2024 and 2029.

The private equity and venture capital investment landscape is experiencing significant growth, driven by an increase in deal volumes and the rising number of high-net-worth individuals (HNWIs) worldwide. This trend is fueled by the attractive returns offered by private equity and venture capital investments, which have become a popular asset class for wealth management portfolios. However, this market is not without challenges. Transaction risks, such as regulatory changes and foreign exchange fluctuations, can pose significant hurdles for investors. Additionally, there is a growing demand for impact investing, particularly in sectors like renewable energy, as investors seek to align their financial goals with social and environmental objectives.
Navigating these trends and challenges requires a deep understanding of market dynamics and a strategic approach to investment opportunities. This market trends and analysis report delves deeper into these topics, providing valuable insights for professionals seeking to maximize their private equity investments.

What will be the Size of the Private Equity Market during the forecast period?

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The markets continue to evolve, with investment strategies becoming increasingly data-driven and sophisticated. Investor returns remain a key focus, with growth stage investing and innovation hubs driving value creation. Risk management is crucial in this industry, with deal origination and fundraising strategies carefully considered. Management fees and capital calls are essential components of the fund lifecycle, while deal closing and post-investment management ensure optimal portfolio performance. Cryptocurrency investments represent an emerging trend, with digital assets joining traditional assets in investment portfolios. Impact measurement and regulatory compliance are also critical, as private equity firms strive for transparency and customer experience.
ESG integration and industry consolidation are shaping the venture capital ecosystem, with secondary market sales providing liquidity for investors. Fund size and investment strategies vary, with some focusing on start-ups and emerging technologies. Technology adoption is a significant factor in fund performance, with customer acquisition and retention key to long-term success. Fund returns are closely monitored, with performance fees incentivizing top-performing funds. In the global private equity landscape, fundraising strategies and industry trends continue to evolve. Regulatory compliance and customer experience are paramount, with digital assets investment and ESG integration shaping the future of the industry.
Private equity sales and industry consolidation are ongoing, with post-investment management and portfolio optimization crucial to maximizing returns.

How is this Private Equity Industry segmented?

The private equity industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

End-user

  Privately held companies
  Start-up companies


Application

  Leveraged buyouts
  Venture capital
  Equity investment
  Enterpreneurship


Investments

  Large Cap
  Upper Middle Market
  Lower Middle Market
  Real Estate
  Large Cap
  Upper Middle Market
  Lower Middle Market
  Real Estate


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    UK


  Middle East and Africa



  APAC

    Australia
    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By End-user Insights

The privately held companies segment is estimated to witness significant growth during the forecast period.

In the realm of investment, private equity portfolios play a significant role in the additive manufacturing market. These portfolios encompass various investment vehicles, such as buyout funds, growth equity funds, strategic investments, and late-stage funding. Each type caters to different growth stages of companies in the sector. Buyout funds focus on acquiring controlling stakes in mature companies, often facilitating digital transformation and operational improvements. Growth equity funds, on the other hand, invest in companies with proven business models, aiming to fuel their expansion through capital infusion and industry expertise. Strategic investments are made by firms seeking to gain a foothold in a new market or expand their existing presence.

Legal frameworks and regulatory landscapes play a crucial role in shaping the market dynamics. Alternative investments, such as distressed debt funds and private debt, provide opportuni

In the third quarter of 2024, the business investment index in the United Kingdom was 111, compared with 109 in the previous quarter, indicating that business investment has increased.

Experimental measures of UK infrastructure investment, covering investment by government and the private sector, and construction activity.