Foreign firms buying biggest stakes in UK businesses

Around £3.5 billion was invested in businesses across the UK through private equity between May and July, analysis from Barclays and data firm Beauhurst shows

Foreign firms are buying the biggest stakes in UK businesses, despite there being more private equity deals struck on British soil, according to new data.

Around £3.5 billion was invested in businesses across the UK through private equity between May and July, analysis from Barclays and data firm Beauhurst shows.

This was nearly 3% higher than the previous three-month period.

Across the first half of this year, just under a 10th of deals struck with UK firms involved a foreign investor.

Nevertheless, these deals accounted for nearly 60% of the total amount invested over the period, as per the analysis.

It indicates that foreign investors are more likely to be behind the highest-value funding for British businesses, even though the majority of deals involve UK investors.

Shenal Kakad, head of private markets for Barclays Private Bank, said that “companies are staying private for longer”, prompting investors to turn to private equity to access more opportunities in recent years.

Historically the UK has been a major player in private market activity in Europe and we expect this trend to continue, she added.

Between May and July, the north west of England saw the highest growth in equity funding largely due to Cheshire-based environmental consultancy RSK Group securing £500 million worth of investment from a consortium of funds.

The BoE has been reviewing the sector and the potential risks it poses to financial stability in the UK, having grown rapidly in recent years and become a major source of funding for businesses alongside bank loans.

Major supermarkets Asda and Morrisons are private equity-owned, while recently announced deals include US private equity firm Apollo Global Management’s takeover of British parcel delivery firm Evri for £2.7 billion.

Wagamama owner The Restaurant Group was also bought by Apollo last year, while earlier this year US private equity group Thoma Bravo struck a nearly £4.3 billion deal to take UK cyber security company Darktrace private.