UK's equity investment market up 72%, says British Business Bank

The UK equity finance market is strong. Equity investment reached a record £6.7m in 2018 – up 72 per cent in two years and the second successive year of a total over £6bn, the British Business Bank said in its 2019 Equity Tracker report.

The figures demonstrated that investment outside of London had done particularly well in growing their investment; they also showed that the majority of investment went towards the tech sector.

The British Business Bank pointed out that there has been increased investment in companies outside of London, up 29 per cent (£616m) in 2018, driven by larger deal sizes.

The East of England, North East and West Midlands are three regions driving this increase, with equity investment increasing by 118 per cent, 115 per cent and 81 per cent respectively. Several UK regions also saw large increases in the number of deals – up by 65 per cent in the North East, 15 per cent in Yorkshire and Humber, and 11 per cent in Wales.

The British Business Bank praised the work of its Midlands Engine Investment Fund (MEIF) and Northern Powerhouse Investment Fund (NPIF) in contributing to the positive growth outside London. 

“This research by the British Business Bank shows that the UK’s SME equity finance market saw a record year in 2018 with investment amounts soaring to £6.7bn. This is a clear sign of investor confidence in British smaller businesses and their potential for growth,” said CEO of the British Business Bank Keith Morgan.

“The British Business Bank continues to work to address regional imbalances in access to investment to ensure smaller businesses across the UK can access the equity finance they need to fulfil their growth potential,” he added. 

British Business Bank programmes are estimated to have supported 9 per cent of UK equity deals between 2016 and 2018, forming 13 per cent of the overall invested equity amount.

The Bank’s MEIF and the NPIF contributed 20 per cent and 16 per cent of equity deals in the Midlands and North in 2018 respectively.