Private equity-owned businesses drive growth and jobs in 2017

Jamie Austin

UK private equity-owned companies are driving growth against a backdrop of uncertainty as they boost revenues by 12% in the last year.

The research, published today by accountancy and business advisory firm BDO LLP, reveals that the UK’s private equity-owned companies (from a sample of 902 portfolio companies where private equity firms together own between 50.01% and 100%) have seen revenues increase by 12% from £37.4bn to £42bn in the last year.

These private equity-owned companies are also boosting the UK labour market. Now employing 311,833 people in the UK, these businesses have grown their workforces by 8.5% in the last year from 287,488 and 26% in the last five years from 248,299.

Driving growth across the whole of the UK, 41% of these high-growth companies are based outside London and they contribute a third (33%) – £13.6bn – of the overall revenue of these companies in 2017.

Yet despite seizing opportunities for growth, their needs and contribution to the economy are often overlooked.

Jamie Austin, partner and head of private equity at BDO LLP, said:  “The UK’s private equity-owned businesses are proving their worth as they continue to shake misconceptions about their impact on the UK economy. They are in fact fuelling growth in our national and local economies while creating much-needed job opportunities for people in times of uncertainty.As Brexit negotiations finally start to take shape, it’s now more important than ever that the Government ensures these dynamic, high-growth businesses don’t fall into a policy gap and that they remain a firm part of the UK’s driving force for post-Brexit growth.”

Leading the charge for growth in Yorkshire and The Humber, private equity-owned businesses in the region have seen revenues rise by 21.4% in the last year from £2.8bn to £3.4bn. Businesses in the region are also hiring more people, boosting employee figures by 55% from 10,240 to 15,900 in the last year.

Growth in the South East tells a similar story as private equity-owned companies in the region have grown revenues by 20.3% from £2.7bn to £3.24bn in the last year. These fast-growth firms have created 64% more jobs in 2017 from 11,784 to 19,290.