2.2 million UK jobs backed by private capital, independent study finds
- Number of jobs backed by private capital in the UK climbs 13% to 2.2 million, around 7% of all UK jobs, second BVCA commissioned independent study finds
- London and the Southeast of England host the most private capital backed jobs, followed by the Northwest of England
- The wholesale and retail trade sectors employ the most people directly: 472,000 jobs
The number of jobs backed by private equity (PE) and venture capital (VC) across the UK has increased by 13% to 2.2 million workers, up from 1.9 million in 2021. This equates to around 7% of all jobs in the country, according to the latest findings from an independent study, published today.
An additional 1.3 million jobs are indirectly supported by suppliers to PE and VC backed firms, which demonstrates the broader value of private capital to the UK economy.
The latest edition of the BVCA commissioned Economic Contribution of Private Equity and Venture Capital Report produced by EY found that private equity and venture capital backed businesses directly generate £137 billion of GDP in 2023, a 34% increase on the previous 2021 study, and equivalent to 6% of the UK’s total GDP. The report found that when their suppliers and the related consumer spend were taken into account, this figure increases to £286 billion, or over 11% of UK GDP.
The report also highlights the significance that private capital plays in backing jobs across the country: more than 50% are based outside of London and England’s Southeast. In 2023, the Northwest of England is home to the largest amount of private capital backed jobs (188,000) outside the capital and the Southeast, a 10% increase since the last study.
This year’s report provides a more detailed breakdown of private capital investment via sector, showing that wholesale and retail trade, such as supermarkets and consumer brands, employ the most people directly (472,000 jobs) followed by information and communications, which includes telecommunications businesses (287,000).
The report was launched at the headquarters of Total Fitness in Wilmslow, Cheshire. The Group was founded in 1993 and has been backed by regional PE firm NorthEdge since 2015. It operates 15 health and fitness clubs across northern England and Wales.
Michael Moore, Chief Executive of the BVCA, said:
“Private equity and venture capital are significant – and growing – contributors to the UK economy. We’re backing more jobs than ever – 2.2 million – with over half of these outside London and the Southeast, demonstrating what a crucial partner private capital is to businesses up and down the country.
“Inflation and high energy prices have put a lot of pressure on companies around the UK in all industries over the last 12 months. Private capital has enabled businesses to weather this storm and remain resilient in an uncertain economic environment. Total Fitness is one example of a firm that, thanks to the support of its private equity backers at NorthEdge, has continued to adapt and thrive during this difficult period.”
Total Fitness employs 650 people in health and fitness clubs across northern England and Wales, as well as a further 150 self-employed fitness professionals and 47 small businesses which operate within the clubs in the region.
Given the challenges that the sports and leisure sector has faced over the past three years, the support of the Group’s PE backers provided a critical lifeline during the covid pandemic-enforced closures that Total Fitness endured and were able to offer additional support over the last 12 months following pressure from high inflation and the increase in energy prices.
Sophie Lawler, CEO of Total Fitness, said:
“We’re extremely proud of our Northern roots and strive to give our customers the best possible workout. We couldn’t offer so many people affordable access to exercise without the support of NorthEdge, our private equity backer, which has been crucial in helping to drive our growth and resilience during difficult operating periods.
“A lot of criticism is often levelled at the private capital sector and I think few people realise the essential role it plays in supporting regional businesses like ours.”
Also new to the report is a breakdown of investment by both venture capital and private equity by size of company. This analysis reveals that VCs tend to support smaller businesses, with 85% of businesses backed having under 50 employees whereas PE investments span businesses across the employment scale.
Keven Parker, Managing Partner at NorthEdge added:
“The senior team at NorthEdge have been investing in the North and Midlands for over 20 years, giving us a unique perspective on the increasing number of exciting businesses and leaders in our regions – from large and international businesses that are increasingly moving operations outside of London and the South East to improve access to talent and reduce operating costs, to start-ups and businesses seeking investment to accelerate innovation and growth. That’s why we are proud to be the UK’s largest independent regionally focussed investor, partnering with management teams in our regions to build better businesses.”
Impact of private capital across the UK
The report by EY goes on to show that, after the Northwest, the regions with the greatest number of private capital backed jobs in the UK were the East of England (161,000 jobs, a 9% increase) and Scotland (145,000 jobs, a 9% increase). The number of jobs backed by private capital in Northern Ireland increased by 20% since the last analysis, jumping to 45,000.
Image 1 - Direct economic contribution of UK private equity and venture capital backed businesses in 2023, by nation and region (Thousands of jobs | Proportion of total UK jobs)
Image 2 - Direct economic contribution of UK private equity and venture capital backed businesses, 2023
Image 3 - Total economic activity of, and related to, UK private equity and venture capital backed businesses, 2023
Media contacts
Karen Keany, BVCA: [email protected]
Headland: [email protected]
Notes to Editors
Measuring the contribution of private equity and venture capital to the UK economy in 2023, was commissioned by the BVCA to provide objective insight into the economic activity of, and related to, UK companies supported by private equity and venture capital firms within the UK economy in 2023.
You can read the full report, and access details on EY’s modelling approach here.
EY’s analysis does not include the related activity of private equity firms and venture capital firms themselves. The estimates provide a snapshot of the economic footprint of economic activity supported by private equity and venture capital investments as measured by employment, employee earnings, and gross domestic product (GDP) in 2023.
Throughout the report, any reference to economic activity supported by private equity and venture capital firms relates to the United Kingdom alone.
About the British Private Equity & Venture Capital Association
The BVCA, as the representative body for private equity and venture capital, connects institutional investors, fund managers, companies, advisers and service providers together, with our membership currently comprising more than 700 businesses from across the private capital ecosystem. This includes more than 325 PE and VC firms, 100 institutional investors and 220 professional services firms.
Private capital drives growth – providing the funding, expertise and long-term view that enables companies to innovate and flourish. Our mission is to advocate the transformative nature of the private equity and venture capital community.
About Total Fitness
Total Fitness was founded in 1993 and has been backed by NorthEdge since 2015, operating 15 health and fitness centres across Northern England and Wales. Despite challenges facing the leisure sector with firstly the pandemic enforced closures and secondly the increase in energy prices Total Fitness has continued to adapt and thrive.
