British private capital fundraising rises in 2025, investment remains steady
- Fundraising by UK private equity and venture capital funds hit £59bn in 2025, driven by LPs increasing allocations to Europe.
- Institutional investors see UK-based private capital funds as a strong place to invest in mid-market businesses which focus on value creation.
- 2025 was another robust year for investment, with £25bn invested by the industry in British businesses.
New data reveals that fundraising by the British private capital industry surged in 2025, driven by LPs allocating more to Europe-focused funds, a high proportion of which are operated out of London.
UK Private Capital’s latest annual Report on Investment Activity shows that British private capital funds had a strong year in 2025, with the total amount raised reaching £58.7bn – compared to £34.8bn in 2024, making it the third highest amount raised on record.
The surge in fundraising was the result of several mid-market firms successfully raising in 2025, including Bridgepoint, IK Partners, Hg, Oakley and MML Capital. Mid-market PE is characterised by a focus on value creation, prioritising operational improvements, strengthening management capability and helping businesses to adopt technology known to increase firm-level productivity.
- In 2025, Bridgepoint successfully closed Bridgepoint Development Capital V (BDC V) - a €2.8 billion lower middle-market fund, focusing on investments typically valued between €100 million and €300 million across the UK and Europe. The BDC V fundraise sits alongside Bridgepoint's wider fundraising activity over the course of 2025 which saw a cumulative €14 billion raised across three flagship funds.
- IK Partners closed the IK X Fund having reached its hard cap of €3.3 billion and representing the largest fund the Firm has raised to date. IK X attracted significant interest from institutional investors across EMEA (64%), Asia (20%) and the Americas (16%).
- Oakley’s Fund VI closed at its €4.5 billion hard cap, six months after the fundraise was launched in September 2024. This included €2.2 billion of new institutional capital from across the globe, including commitments from Europe, North America and Asia, as well as from new regions including Australia and Latin America.
- MML Capital closed its Partnership Capital VIII fund at €1bn, welcoming 16 new LPs, with c.70% of those from outside Europe, and MML Keystone I (€550m) which welcomed 20 new LPs, with c.45% from Europe, 40% US and 15% RoW.
In 2025, 42% of funds raised came from Europe (including the UK) compared to 33% in 2024, with the biggest increase coming from institutional investors based outside the UK. Allocations by North American LPs also remained strong, representing over a quarter of funds raised. This shows that the UK continues to be viewed as an important hub for private capital, and a gateway to investing across the continent.
While fundraising is up overall, the picture for venture capital was less positive. VC fundraising was £2bn in 2025, which was lower than 2024 when several large VC’s successfully closed funds, and on par with 2023. Despite the tougher market, several UK venture capital firms successfully closed funds in 2025, including SV Health Investors and Elbow Beach Capital.
Investment in British businesses remained robust in 2025
UK Private Capital reports that private capital firms have invested nearly £150bn into UK businesses over the past 5 years. In 2025, £25bn was invested in over 1,400 UK businesses. This down from 2024 when £31.4bn was invested but higher than 2023 (£20.4bn), and higher than the average amount invested per year in the 2010s.
This investment has fuelled the growth of businesses across the UK, with more than half (57%) of the businesses backed last year located outside of the capital. The industry backed British businesses across strategically important sectors including advanced manufacturing, defence, financial services and clean energy, supporting companies from global exporters to regional employers. Notable businesses receiving backing in 2025 included investment platform Hargreaves Lansdown, scientific instruments maker Spectris and banknote maker De La Rue.
Of the more than 1,400 businesses which received private capital investment in 2025, nine in ten were small or medium-sized, showing the importance of private capital to the UK’s diverse entrepreneurial and start-up economy.
“At a time of heightened geopolitical and economic uncertainty, investors are rebalancing towards Europe. The UK’s status as the leading hub for the private capital industry in Europe means the nation is benefitting from this strategic shift. The strength of the industry is a significant competitive advantage for the UK, and one that we should seek to build on.
“The £25bn invested into British businesses touched all four corners of the United Kingdom, with much of it directed to businesses in sectors aligned to the Government’s Industrial Strategy. This includes fast growing businesses in advanced manufacturing, defence, financial services and clean energy which will be at the heart of the economy for years to come.”
“Mid-market firms had a robust year for fundraising in 2025 as investors prioritised funds that back businesses with strong growth potential, often located outside the capital. These businesses act as lynchpins for local economies, creating high quality jobs and supporting supply chains.”
Notes to Editors:
The Report on Investment Activity 2025 can be found here.
For further information, please contact:
James Gribben, Head of Communications, UK Private Capital [email protected].
Data sources
UK Private Capital collects data from members on an annual basis covering fundraising, investments and divestments in each calendar year. All UK Private Capital members who hold General Partner membership and are primarily based in the UK are required to complete the investment activity survey. To be included in the current year survey, a firm had to be a full GP member of UK Private Capital at 1 January 2026. The report includes the following categories of data:
- Activity data provided by private equity and venture capital UK Private Capital member firms.
- Activity data provided by non-member private equity and venture capital firms to other national associations that are part of the European Data Cooperative (‘EDC’).
- Activity data of private equity and venture capital firms that was obtained from publicly available sources.
UK Private Capital together with other national associations have supplemented data provided by members and used estimates where appropriate.
About UK Private Capital
UK Private Capital is the industry body and public policy advocate for the private equity (PE), venture capital (VC) and private credit ecosystem in the UK. With a membership of 600 firms, we represent UK-based private capital firms, as well as their professional advisers and a large base of UK and global investors. The private equity, venture capital and private credit industry has a vital role to play in driving national and regional growth. Currently over 13,000 companies, employing more than 2.5 million people, are backed by private capital investment in the UK.
