The BVCA has recently published a landmark report estimating the current economic activity of, and related to, UK companies supported by private equity and venture capital firms within the UK economy in 2021. The independent study produced by Ernst & Young provides a snapshot of the economic footprint of economic activity supported by private equity and venture capital investments as measured by employment, employee earnings, and gross domestic product (GDP) in 2021. It details the millions of jobs directly and indirectly supported by PE and VC-backed businesses, the sectors and the regions in which they are found, and the billions of pounds these businesses contribute to the UK’s GDP. PE and VC are crucial to the growth and economic wellbeing of the UK, but their contribution to the economy has never before been quantified in one comprehensive study.
Key Findings
Economic activity of private equity and venture capital backed businesses
Overall, in 2021, private equity and venture capital backed businesses employed 1.9 million workers, collectively earning £58 billion. PE and VC backed businesses also directly generated £102 billion of GDP in 2021. These businesses directly supported approximately 5% of GDP, 6% of employment, and 5% of gross earnings in 2021.
Economic activity related to private equity and venture capital backed businesses
Suppliers to private equity and venture capital backed businesses employed an additional 1.2 million workers earning £37 billion and generating £63 billion of GDP in 2021. The £37 billion of earnings is included within the total GDP figure. The related consumer spending supported an additional 719,000 workers earning £19 billion and generating £43 billion of GDP in 2021.
Total economic activity of, and related to, private equity and venture capital backed businesses
In total, businesses supported by private equity and venture capital, their suppliers, and the related consumer spending supported an estimated 3.8 million workers earning £113 billion and generating £208 billion of GDP in 2021.
Kathleen McLeay, NCM’s chief executive, says “this report makes for interesting reading, particularly in terms of the geographical spread of private equity and venture capital activity across the UK. We at NCM Fund Services are delighted to play an important part in supporting what is a thriving sector of the UK economy”.
If you would like to read full details of the study you can find the report here: BVCA Report
Source | BVCA