Private equity sector mounts charm offensive as new report claims North West is investment hotspot

With big ticket raids on stock market companies and a negative perception as the corporate raiders of the investment world, the trade body for venture capital and private equity in the UK is pushing the positives in a new report released today.

The Economic Contribution of Private Equity and Venture Capital 2023 report, launched today (18 April) at the Wilmslow headquarters of Total Fitness, found that the number of jobs supported by private capital increased in the North West by almost 10% to 188,000.

This makes the North West home to the largest amount of private capital backed jobs outside London and the Southeast.

There are 351 private equity backed businesses in the North West, 404 with investment from venture capital funds, employing 141,000 people in private equity owned companies and 12,000 in VC backed businesses.

Nationally, 2.2 million UK jobs are directly supported by private equity and venture capital, up by 13%.

The wholesale and retail sector, such as supermarkets and consumer brands employed the most private-capital-backed job (472,000 jobs) followed by information and communications (278,000).

Private capital backed businesses were also found to have contributed £137bn to the UK economy, equivalent to 6% of UK GDP.

Sophie Lawler, chief executive of Total Fitness, owned by NorthEdge, fronted the launch and said private investment has provided an ‘invaluable support’ for her business over the last five years and has urged other business owners to explore private capital as a way to grow.

Total Fitness employs 650 people in its health clubs across the Northern England and Wales, as well as supporting a further 150 self-employed fitness professionals and 47 small businesses which operate within the clubs. 

It has been backed by NorthEdge, a regionally-focused private equity firm, since 2015.  

The role and value of private equity within the UK economy has been under scrutiny in recent years after a series of high-profile business sales.

Lawler said her private equity investment has been ‘essential’ and thinks that sometimes there’s an ‘outdated’ view of the industry.

The report has been written by consultants at EY and commissioned by the BVCA, the private capital trade body.

Lawler added: “I’ve worked alongside NorthEdge for almost five years – some of the most challenging but equally rewarding times. Having been supported by them to build a great team around me we were able to create some brilliant momentum in the business before 2020, and their continued trust and support through the pandemic and beyond has enabled us to quickly navigate back to growth and our exciting future strategy. Very few business owners that I speak to know what an effective, empowering, and supportive role private equity can play, and I certainly think there are a few myths to be debunked.”

The analysis in the report is based on estimates of the economic contribution or footprint of private equity and venture capital backed businesses.

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 and 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 businesses around the UK in all industries over the last 12 months. Private capital has enabled companies 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.”

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.”