UK private capital returns continue to outperform public markets
- Investors owning assets invested in UK private equity and venture capital which, if realised at their 31 December 2022 values, would receive 17% return on capital invested across the past decade, a near doubling.
- The good news follows the Chancellor’s Mansion House speech in which he announced plans to encourage greater investment in unlisted equities, benefiting savers and the economy.
The UK’s private markets once again outperformed the public markets last year, highlighting the strong value private equity and venture capital provides savers and investors, new data has shown.
The latest data from the British Venture Capital and Private Equity Association’s (BVCA) Performance Measurement Survey - which looks at the performance of all independent UK venture capital and private equity funds managed from the UK by its members – shows that the private capital industry outperformed the public markets with a 10-year horizon return of 17 per cent per annum. This is well above the returns generated by principal comparators in public markets such as FTSE All-Share or FTSE 250 which yielded the returns of 6.5 percent and 7 percent over the same time frame.
Since 2013, investors owning assets in the UK private equity and venture capital sector have experienced a near doubling of their original investment. This return includes the value of unrealized investments as at 31st December 20221.
The data comes as Chancellor Jeremy Hunt has announced plans to encourage greater pension fund investment in unlisted equities and shows that, despite challenging market conditions, private capital remains an important asset class, especially for savers who will see strong returns.
Michael Moore, Chief Executive of the BVCA, said:
“UK private equity and venture capital funds continue to outperform and deliver strong returns for investors. Our latest data demonstrates that private capital, even throughout the more challenging economic environment of the last 12 months, remains a resilient and long-term asset class that provides consistently robust returns for a range of institutions, including pension funds.”
Albertha Charles, PwC UK Asset and Wealth Management Leader, said:
"The findings of this report underscore the resilience of the sector and scale of the current opportunities in the face of a challenging economic environment. "By providing a detailed insight into the performance of private equity and venture capital, the study adds a layer of transparency to a sector that is of fundamental importance to growth in the UK. "We are pleased to partner with the BVCA on this report and hope that it provides a clear and useful bellwether for industry."
The latest data follows the publication of the BVCA’s latest Report on Investment Activity, which found that British businesses are also continuing to seek out private equity and venture capital funds to help grow. The total amount invested in UK businesses in 2022 was £27.5bn – a 23% uplift compared to the £22.3bn invested in 2019. Of the 1,578 businesses which received funding, nine in ten were small or medium-sized, showing the importance of private capital to the UK’s entrepreneurs and start-ups.
Media contacts
Karen Keany, BVCA: [email protected]
Notes to Editors
- The full report can be found here, and the accompanying data set, here.
- The British Private Equity & Venture Capital Association (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.
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