Quarterly Review - December 2021
The Quarterly Review is a new publication designed to demonstrate the significant impact of private equity and venture capital on the UK economy using the latest data and research.
Our flagship report, Investing in Integrity, shows that when the pandemic hit private equity and venture capital stepped up, investing additional capital into the businesses they already backed – £2.8bn of follow on funding invested over the full year. To this was added the management expertise that comes with private equity and venture capital investment.
Our members worked with businesses to adjust their plans and to provide funding where it was needed to support working capital and business investment.
Our report also shows that private capital investment is focused on small and medium sized firms – with 9 in 10 investments by our members in firms with fewer than 250 employees – and with 66% of these investments outside London. Private capital is supporting the growth of every part of the UK and the resilience of UK businesses through the pandemic.
The BVCA has also published two reports in the last quarter of this year on the performance of the industry. Our annual Performance Measurement Survey reveals a strong industry return of 19.6% per annum over the last decade. These annual returns are equivalent to investors nearly doubling their money, getting a 1.9x return on capital invested over the past decade.
And for the first time, the BVCA has benchmarked funds managed by our members against the UK stock market using a public market equivalent analysis. This shows that private equity and venture capital funds have outperformed the FTSE All-Share, the most comparable index for the range of small, medium and large investments held by UK private equity and venture capital funds, each vintage year since 1991.
Finally, as all eyes turned to COP26 in Glasgow in November, we have also focused, rightly so, on the efforts in our industry to help deliver Net Zero. There is much to do, and the BVCA has made a commitment to supporting our members to deliver Net Zero in their own businesses and the companies they invest in. We are proud that many of our members have worked with the Science Based Targets Initiative to provide clarity and rigour in the standards they are holding themselves accountable for. And our Excellence in ESG Series has helped to share ideas and best practice amongst our members. In addition, our report on the 10 Steps to Net Zero shows the investments our members are making today to tackle climate change.
We cannot delay action on tackling climate change, but equally change cannot happen overnight. The long-term view, expertise and capital provided by private equity and venture capital is ideal for making big commitments to tackling climate change. I am very proud of the steps this sector is taking to make Net Zero a reality.
