Private capital investment in the North East reaches £180m in 2025

New research shows that investment by private equity and venture capital firms into North East businesses was £180 million in 2025, up from £159 million in 2024.

The report, Private Capital in the North East 2026, which is being launched by UK Private Capital today, showcases the industry’s importance to the North East economy. It finds that the total amount invested in the North East over the past 5 years reached £2.6 billion.

Private equity and venture capital firms currently back 285 businesses across the North East, supporting over 69,000 jobs. Private equity typically invests in established businesses to help accelerate growth and improve performance, while venture capital provides funding to earlier-stage, high-growth companies to help them scale up. Businesses backed by the industry contribute £4.2 billion to the region’s GDP annually.
 

Supporting business growth trajectory

Analysis conducted by Henham Strategy for the report, shows that businesses backed by private capital in the North East are more likely to deliver sustained growth, internationalise and innovate than the wider business population:

• North East companies that receive private capital backing are 30% more likely to also deliver sustained annualised revenue growth above 10% p.a. than those without backing by the industry.
• Venture-backed firms are more outward looking. North East VC-backed firms are 60% more likely to also be strongly internationalised than those not backed by VCs, which could indicate earlier access to export markets and the investor networks that can help businesses expand overseas.
• Innovative businesses often seek to protect and commercialise their intellectual property. North East venture-backed firms are also more than 3x more likely to hold a patent than businesses not backed by the industry.
   

North East’s vibrant spinout ecosystem

The report provides an in depth look at the North East’s spinout ecosystem - companies created based on intellectual property generated through university research. Data provided by Beauhurst for the report shows that the North East boasts 68 active spinouts.

The majority of spinouts in the region originate in Newcastle University and Durham University, generating more investable businesses, particularly in deep tech, life sciences and engineering. Most (44) of spinouts are located geographically around Newcastle and County Durham, with the rest spread across the North East’s local authorities.
 

The report will be launched at the Yorkshire and North East Invest Forum, which brings together investors from leading private equity and venture capital firms, local institutional investors, policymakers, and portfolio companies to explore the both regions’ growing strengths, emerging opportunities and strategic priorities.

The report makes several recommendations to both national and regional policymakers about how the impact of private capital can be maximised across the region. This includes calling on:

• UK Government to scale programmes such as Innovate UK’s Investor Partnerships, Growth Catalyst initiatives and Knowledge Transfer Partnerships that help spinouts and innovation-led businesses access capital.
• The British Business Bank to ensure it catalyses competitive investment ecosystems across the UK, both through its regional angel funds, regional funds and wider programmes.
• UK Government seek to further improve regional skills infrastructure, in partnership with industry and Skills England.
• Combined authorities and local leaders to provide clearer investment signals and improve planning and infrastructure conditions that support long-term growth.

“Private capital is playing an increasingly important role in the North East’s economy, backing established businesses through buyouts while venture capital firms support a growing cohort of start-ups and scale-ups.

“This year, there is much to celebrate about the scale of investment into North East businesses, the strength of the region’s spinout pipeline, and the growing role private capital is playing in supporting jobs, innovation and growth. However, with a more supportive policy and regulatory environment, the industry can play an even bigger role in the economy and help the region realise its full potential.”

Michael Moore

Chief Executive, UK Private Capital

“This report highlights the potential for private capital to be a real catalyst for powerful partnership in the North East, with the region’s offshore energy and clean tech sectors already showing strong investment and huge opportunity existing elsewhere.

“By continuing to bring together business leaders, investors, policymakers and professional advisers in forums like UK Private Capital’s Nationwide Invest Series, we can build long-term confidence and capability across all key industries to drive further regional investment and create long-term sustainable growth.”

Dan O’Connell

M&A Practice Lead – North, Gallagher

Notes to Editors:  

A full copy of the embargoed report is available here.

For further information, please contact:  
UK Private Capital Press Office 
Email: [email protected]
 

Background: 

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.