Private capital invests £9 billion in South West businesses over the past five years

New research shows that investment by private equity and venture capital firms into South West businesses reached over £2.8 billion in 2025, up from £2.1 billion in 2024, with the total amount invested over the past five years reaching £9 billion.

The report, Private Capital in the South West 2026, which is being launched by UK Private Capital today, showcases the industry’s importance to the South West economy.

Private equity and venture capital firms currently back 641 businesses across the region, supporting over 165,000 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 £11 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 South West are more likely to deliver sustained growth, internationalise and innovate than the wider business population:

• South West companies that receive private capital backing are 1.1x more likely to also deliver annual revenue growth above 10% than those without backing by the industry.
• Venture-backed firms are more outward looking. South West VC-backed firms are 1.6x 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. Venture capital backed firms in the South West are 3.2x more likely to also have a patent than those without investment.
   

South West’s vibrant spinout ecosystem

The report provides an in-depth look at the South West’s spinout ecosystem - companies created based on intellectual property generated through university research. Data provided by Beauhurst for the report shows that the South West boasts 148 active spinouts.

The largest single proportion of spinouts in the region are located in Bristol, with the rest spread across the South West’s local authorities. World-leading universities including Bristol, Exeter, Bath and Falmouth are helping to generate more investable businesses, particularly in deep tech, quantum, life sciences, engineering and climate-focused innovation.
 

The report will be launched at the South West Invest Forum, which brings together investors from leading private equity and venture capital firms, local institutional investors, policymakers, and portfolio companies to explore the region’s 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 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 South West’s economy, backing both established businesses and a growing cohort of start-ups and scale-ups.

“This year, there is much to celebrate about the scale of investment into South West 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 clearly demonstrates the powerful role private capital is already playing in the South West, by enabling ambitious businesses to scale and compete on national and global stages while delivering real economic impact to the tune of over £11bn Gross Domestic Product (GDP). But there remains plenty more untapped potential.

“By continuing to work collaboratively and bring together business leaders, investors, policymakers and professional advisers we can unlock additional pathways for regional investment, drive further innovation, create more jobs and deliver long-term sustainable growth.”

Rheanna Duffield

Associate Director, PEMA (Private Equity & M&A), 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.