Foreign investors pour £3.5 billion into UK firms in May-June
2024-09-16 14:53- Foreign investors contributed £3.5 billion to UK businesses through private equity from May to July 2024.
- The north west of England saw significant equity funding growth, particularly with RSK Group's £500 million investment.
- The trend of foreign investment in UK firms suggests a robust future for private equity in the country.
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Insights
Between May and July 2024, foreign investors significantly increased their presence in the UK private equity market, investing approximately £3.5 billion in local businesses. This investment represented a 3% rise compared to the previous three-month period, highlighting the ongoing trend of foreign firms acquiring substantial stakes in UK companies. Notably, while only about 10% of deals involved foreign investors, these transactions accounted for around 60% of the total investment amount during this timeframe. The north west of England experienced the most substantial growth in equity funding, largely driven by a £500 million investment in RSK Group, an environmental consultancy based in Cheshire. This surge in funding comes amid a broader trend where companies are opting to remain private for extended periods, prompting investors to seek opportunities in private equity. The private equity sector has garnered increased scrutiny from the Bank of England, which is assessing the potential risks associated with its rapid growth and its role as a significant funding source for businesses alongside traditional bank loans. Prominent private equity-owned companies include major supermarkets like Asda and Morrisons, with recent high-profile deals such as Apollo Global Management's acquisition of Evri for £2.7 billion. As of July, the UK had approximately 5.4 million registered companies, reflecting a year-on-year increase of about 300,000. This growth indicates a trend of resilience and adaptability among businesses, supported by strategic investments in key industries such as technology and life sciences, which are seen as vital for future growth.
Contexts
In May and June, foreign investors injected £3.5 billion into UK firms, reflecting a strong interest in the UK market despite ongoing economic concerns. This influx of capital comes at a time when UK airports are preparing for expansion, with City Airport recently approved for a 40% increase in passenger numbers, while Luton and Gatwick await decisions on their major development plans. These expansions are aimed at boosting economic growth and job creation. However, the push for airport expansion raises environmental concerns, particularly regarding carbon emissions. The balance between economic development and environmental conservation is becoming increasingly critical as the UK navigates its post-pandemic recovery. Additionally, the UK’s military training areas, such as Salisbury Plain, highlight the dual role of the Ministry of Defence in maintaining military readiness while also focusing on environmental conservation efforts. This reflects a broader trend of integrating economic and environmental considerations in various sectors, including defense and aviation. Overall, the significant foreign investment in UK firms, coupled with airport expansions and military training area management, underscores the complex interplay between economic growth and environmental sustainability in the current UK landscape.
