LDC committed to increasing investment in 2024 after a strong 2023

Toby Rougier

LDC, the private equity investor, invested £350m in UK-based medium-sized businesses during 2023, despite what it called “challenging” macro-economic conditions.

The firm, part of Lloyds Banking Group, says it plans to increase its investment activity in the year ahead.

In 2023, LDC invested £300m in 14 new businesses with a total enterprise value of more than £1bn. It also invested £50m of follow-on funding in its existing portfolio of more than 90 companies and supported 46 bolt-on acquisitions.

Spanning regions and sectors of the UK economy, new investments included sustainability data and technology provider Sedex, specialist production agency Star Live, artificial intelligence-based talent analytics platform Horsefly, marine inspection services company Idwal, fast-growing managed service provider DSP, and Boston Energy a technical services provider to the wind energy industry.

Key portfolio company acquisitions in 2023 included telecoms provider Onecom’s tenth bolt-on since LDC’s investment in 2019, digital transformation service provider FSP’s acquisition of Savanti, three acquisitions for occupational health and corporate health services provider PAM Group, and Ross Trustees’ merger with ITS to form Independent Governance Group.

LDC also generated £440m of proceeds from nine exits, representing an average money multiple return of 3.2x. Highlights include the exits of Bristol-based artisan baker Cakesmiths after a two-year partnership that generated threefold growth, Newcastle-headquartered iamproperty following four years of transformational growth, and creative and technology group MSQ after significant international expansion.

LDC’s support helped the companies it exited in 2023 to generate average revenue growth of 133%, EBITDA growth of 180% and headcount growth of 159%.

The firm, which operates from 10 regional locations, also made 18 new hires and 13 promotions during 2023, putting it in a strong position to increase investment activity in 2024.

LDC chief executive Toby Rougier said: “Despite the headwinds faced by the economy in 2023, our unique funding model enabled LDC to show its support in every corner of the UK. We provided a consistent and reliable supply of new investment and continued to partner with our portfolio companies to focus on their growth ambitions. The exits we completed in 2023 prove the value of our relationship-based approach.

“Our success reflects the resilience and entrepreneurial spirit that make medium-sized companies the backbone of our economy. Now, as we see signs of market conditions improving, it’s the ambitious leaders behind these businesses who will lead a resurgence of M&A activity in 2024 – and we remain committed to partnering with them.

“I’m also proud of the progress we made towards our ESG ambitions in 2023, in supporting the decarbonisation of our portfolio, investing in businesses making a significant contribution to the UK’s journey to net zero, and raising funds for The Prince’s Trust as well as many local charities right across the UK.”

In 2023, LDC contributed £1.1m to charities across the UK and was awarded Partner of the Year at The Prince’s Trust Partnership Awards in recognition of its ongoing support for the UK’s leading youth charity. LDC has already helped more than 3,350 young people to turn their business ideas into reality whilst encouraging a more diverse group of future business leaders.