Private capital invests £4.3 billion into businesses across the West Midlands over the past five years

New research shows that private equity and venture capital firms invested £4.3 billion into businesses in the West Midlands over the last five years.  

The report, Private Capital in the West Midlands 2026, which will be launched by UK Private Capital at an event taking place in Birmingham today in partnership with Gallagher, highlights the industry’s importance to the region’s economy. Private capital firms invested £1.1 billion in the region in 2025, a significant increase from the £439 million invested in 2024, taking the cumulative overall figure of investment over the past 5 years into business in the region by private capital to £4.3 billion.

Private equity and venture capital firms currently back 503 businesses across the West Midlands, supporting over 172,000 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 £10.7 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 West Midlands are more likely to deliver sustained growth, internationalise and innovate than the wider business population:

• West Midlands companies that receive private capital backing are 20% more likely to also deliver sustained annualised revenue growth above 10% per year than firms without private capital backing.
• Venture-backed firms are more outward looking. West Midlands-backed businesses are 60% more likely to also be 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. West Midlands venture-backed firms are also 2.7x more likely to file patents than businesses not-backed by the industry.
   

The West Midlands’ vibrant spinout ecosystem

The report provides an in-depth look at the West Midlands spinout ecosystem - companies created based on intellectual property generated through university research. Data provided by Beauhurst for the report shows that the West Midlands boasts 90 active spinouts.

The University of Birmingham, University of Warwick, Coventry University and Aston University are responsible for the lion’s share of spinouts in the region, helping to generate investable businesses in deep tech and biotechnology. The majority of spinouts within the region are located in Birmingham, with Coventry close behind and the rest spread across the region’s Local Authorities.  
 

Active Spinouts by Local Authority:

The report will be launched at the Midlands Invest Forum, which brings together investors from leading private equity and venture capital firms, local institutional investors, policymakers, and portfolio companies to explore the Midlands’ 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. 

“The West Midlands has a strong and increasingly diverse population of businesses supported by private capital. From backing established businesses through buyouts to supporting innovative start-ups and scale-ups through venture capital, the industry is helping companies across the regions grow, create jobs and contribute more to the economy. 

“The region has real strengths in its business base, its universities and vibrant spinout ecosystems. With the right policy and regulatory environment, private capital can play an even greater role in helping the West Midlands build on those strengths and support the next generation of high-growth companies.”

Michael Moore

Chief Executive, UK Private Capital

“With more than 500 businesses currently backed by private capital, supporting around 172,000 jobs and contributing £10.7 billion to regional GDP annually, the scale of the industry’s impact across the West Midlands is clear. Backed businesses are also more likely to sustain strong growth, demonstrating the value of combining capital, expertise and ambition.

“Building on that strong foundation and connecting businesses with the right investors, advisors and support will help unlock further potential, strengthen regional capability and turn investment into lasting economic impact.”

Dan O’Connell

Practice Lead, Private Equity and M&A, Gallagher

A full copy of the report is available here.

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

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.  

About Gallagher

Gallagher is the brand name of Arthur J. Gallagher & Co. (NYSE: AJG) — the global insurance broker, risk management services and consulting firm headquartered in Rolling Meadows, Illinois.

Gallagher offers client service capabilities in more than 130 countries around the world through a network of correspondent brokers and consultants. 

For further information, please visit www.ajg.com/uk and www.ajg.com.