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BVCA Report on Investment Activity 2018

Table of contentsIntroduction to the BVCA 1

European Data Cooperative 2

Executive summary 4

1. Fundraising

Fundraising statistics explained 5

Glossary 6

At a glance 7

Incremental fundraising

By fund stage focus 8

Concentration of capital 9

By location of investor 10

Investors by type 12

Investors by geography 13

2. Investments

Investments statistics explained 17

Glossary 18

At a glance 19

By investment stage

All private equity 20

Buyout by equity bracket 23

By geography

International investment flows 25

Regional investment flows 27

By sector 32

3. Divestments

Divestments statistics explained 35

Glossary 36

At a glance 37

By exit route 38

By sector 42

By region 45

Data tables 47

Methodology and definitions 63

1| BVCA Report on Investment Activity 2018

Introduction to the BVCAThe British Private Equity & Venture Capital Association (BVCA) is the industry body and public policy advocate for private equity and venture capital in the UK.

For more than three decades we have represented the industry and delivered authoritative research and analysis, proprietary publications, specialist training, topical conferences and best practice standards.

Our membership comprises more than 780 influential firms, including over 340 private equity and venture capital houses, as well as institutional investors, professional advisers, service providers and international associations.

We work together to provide capital and expertise to growing businesses, to unlock potential and to deliver enhanced returns to the millions who directly and indirectly invest in our industry.

For more information please visit www.bvca.co.uk

BVCA Report on Investment Activity 2018

2 | BVCA Report on Investment Activity 2018

European Data Cooperative

Background and audit

• Since 2011, the BVCA has supported the European Data Cooperative (EDC), working with Invest Europe, AFIC, AIFI and 20 other private equity and venture capital associations across Europe to develop a single system for collecting data.

• The EDC replaces the BVCA’s previous database Benchmark.

• All relevant historic data was migrated to the EDC system in 2017 following an extensive audit completed in Q3 of 2017.

• Audit efforts were conducted in close coordination with participating firms and partnering national associations to ensure the best coverage and consistent application of methodology and definitions.


European Data Cooperative The database has multiple benefits for data contributors:

• A standardised methodology will support the creation of pan-European statistics that are comparable across different countries and regions. This ensures that the most comprehensive insight of UK’s private equity and venture capital industry is available to inform fund managers, institutional investors, policymakers, regulators and other stakeholders.

• The platform is jointly owned, operated and open to all private equity and venture capital associations across Europe. A separate legal entity (EDC GmbH) was set up in which all associations are shareholders.

• Statistics derived from the EDC platform are reported in aggregate to ensure anonymity.

• The most recent data publications are always available on BVCA’s website (www.bvca.co.uk/research) or by contacting the research team ([email protected]).

The EDC database brings together:

3933 Transactions

1745 Portfolio

companies

448 Funds

177 Firms


Executive Summary

1. Fundraising Total fundraising in 2018 reached £34.12bn. The number of funds raising new capital was 94.

Pension funds provided 39% of all capital raised followed by fund of funds (13%), sovereign wealth funds (10%), and insurance companies (10%). Institutional investors from outside the UK contributed approximately 86%.

Buyout fundraising reached £27.64bn. Pension funds are the largest institutional investor in UK buyout funds contributing 39%, followed by fund of funds (13%), sovereign wealth funds (11%), and insurance companies (10%)

Venture capital fundraising reached £1.09bn. Private individuals contributed 32% to the total VC fundraising amount, followed by capital markets & corporate investors (20%) and Government agencies (15%).

Growth capital reached £3.58bn. Pension funds were the largest contributor at 37% followed by funds of funds at 17%.

2. Investments The total equity amount invested in portfolio companies in 2018 decreased by 7% year-on-year to £20.64bn. The number of companies receiving investment rose 30% to 1,335.

Buyout investment decreased by 12% year-on-year to £16.03bn. The number of companies backed decreased by 10% to 208. Mega buyouts accounted for 38% of the buyout market, followed by large buyouts at 36%. Small buyouts increased by 17% year-on-year to £408m with 80 companies backed. Mid-market saw a slight year-on-year decrease of 3% at £3.7bn investing in 103 companies.

Venture capital investment increased by 21% to £0.99bn and more than doubled since 2015. 698 companies were venture-backed: a 44% increase. Seed investments decreased by 7% with £52m invested. Early stage investments increased 53% year-on-year in size to £480m. Start-up grew to £117m, which is an increase of 39%. Later stage investments decreased by 8% to £336m.

Growth capital investments increased by 66% to £3.24bn. 415 companies were backed, a 40% increase year-on-year.

3. DivestmentsAround 500 companies were exited in 2018, a similar number to 2017.

By amount of former equity investments (divestments at cost), the total value was £8.75bn, a year-on-year decrease of more than 38%.

The most prominent exit routes by amount at cost were trade sale (38.2%), sale to another private equity firm (31.3%) and public offering (10.0%).

Buyout divestments represented 80% by amount at cost and around 34% by number of companies of all exits in 2018.

Venture capital covered 19% of all divestments with 97 companies. The most prominent exit route was public offering, which represented more than 34% in amount at cost divested in 2018.

Growth divestments represented 15% of all exits by amount at cost and 42% by number of companies.

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| BVCA Report on Investment Activity 2018

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Fundraising statistics explained1 Funds managed by UK private equity firms for both UK and overseas

investments are included.

2 Funds managed by UK-based offices of international private equity firms are included.

3 Funds managed by the overseas headquarters of international private equity firms (which have UK-based offices that are BVCA members) are excluded.

The following funds are included in the statistics: private equity funds making direct private equity investments; mezzanine funds; infrastructure funds; co-investment funds; replacement capital funds and rescue/turnaround funds.

The following funds are excluded from the statistics: real estate funds, distressed debt funds, primary funds of funds and secondary funds of funds.


GlossaryFund stage focus

Buyout fund: Funds acquiring companies by purchasing majority or controlling stakes, financing the transaction through a mix of equity and debt.

Generalist fund: Funds investing in all stages of private equity.

Growth fund: Funds that make private equity investments (often minority investments) in relatively mature companies that are looking for primary capital to expand and improve operations or enter new markets to accelerate the growth of the business.

Mezzanine fund: Funds using a hybrid of debt and equity financing, comprising equity-based options (such as warrants) and lower-priority (subordinated) debt.

Replacement capital fund: Funds dedicated to the purchase of minority stakes of existing shares in a company from another private equity firm or other shareholders.

Rescue/turnaround fund: Funds investing equity in companies that are in financial distress with the view to restoring the company to profitability.

Venture capital

• Early-stage fund: Venture capital funds focused on investing in companies in the early stages of their lives.

• Later-stage fund: Venture capital funds providing capital for an operating company, which may or may not be profitable. Typically in C or D rounds.

• Venture fund (all stages): Venture capital funds focused on both early and later stage investments.

Note: Fundraising amounts exclude capital gains.

Type of investors

Corporate investor: Corporations manufacturing products or delivering non-financial services.

Endowment: An investment fund established by a foundation, university or cultural institution providing capital donations for specific needs or to further a company’s operating process. They are generally structured so that the principal amount invested remains intact (for perpetuity, for a defined period of time or until sufficient assets have been accumulated to achieve a designated purpose).

Family office: An entity that provides services to one or more affluent families, including investment management and other services (accounting, tax, financial and legal advice etc.).

Foundations: A non-profit organisation through which private wealth is distributed for the public good. It can either donate funds and support other organisations, or provide the sole source of funding for their own charitable activities.

Fund of funds: A private equity fund that primarily takes equity positions in other funds.

Government agencies: Country, regional, governmental and European agencies or institutions for innovation and development.

Other asset manager: A financial institution (other than a bank, endowment, family office, foundation, insurance company or pension fund) managing a pool of capital by investing it across different asset classes with the purpose of generating financial returns. It may include private equity direct funds that occasionally do indirect investments, but excludes fund of funds that are a standalone option.

Pension funds: A pension fund that is regulated under private or public sector law.

Sovereign wealth funds: State-owned investment funds investing in foreign direct private equity funds to diversify their portfolio.

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2018 Fundraising at a glance

2018 All private equity

Venture capital(1) Buyout(1) Growth(1) Other(1)

Incremental - Amounts raised £34.12bn £1.09bn £27.64bn £3.58bn £1.82bn

Incremental - No. of funds 94 32 26 23 13

Note: (1) relates to fund focus

• Total fundraising in 2018 reached £34.12bn. The number of funds raising new capital was 94.

• Pension funds provided 39% of all capital raised followed by fund of funds (13%), sovereign wealth funds (10%) and insurance companies (10%). Institutional investors from outside the UK contributed approximately 86%, with investors from North America making the highest contribution with a 43% share.

• Buyout fundraising reached £27.64bn. Pension funds are the largest institutional investor in UK buyout funds contributing 39%, followed by fund of funds (13%), sovereign wealth funds (11%), and insurance companies (10%). Investors from outside UK contributed 88% of the total buyout fundraising, with those from North America representing approximately 43% of the capital raised.

• Venture capital fundraising reached £1.09bn. Private individuals contributed 32% to the total VC fundraising amount, followed by capital markets & corporate investors (20%) and Government agencies (15%). UK investors contributed 58% of the total venture capital fundraising with the rest of Europe being the second highest contributor at approximately 20%.

• Growth capital reached £3.58bn. The strategies of these funds range from scaling up venture capital-backed companies, to making minority equity investments in mature SMEs or pursuing regional development policies with the backing of banks or public institutions. Pension funds were the largest contributor at 37% followed by fund of funds at 17%.


Funds raised and number of funds by fund stage focus

All private equity£34.12bn

27.64

3.58

1.091.82

94 funds

26

13

23

32

BuyoutGrowth Venture capitalOther

(2)

Incremental amounts raised during the year (£ billion) Number of funds by fund stage focus

Note: (2) Other includes Generalist and Replacement capital funds

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All private equity – Concentration of capital 2018 – Incremental fundraising by amount bracket per fund during the year

> £1bn£500m - £1bn£250m - £500m£100m - £250m<£100m

Number of funds

£ b

illio

n

0

2

4

6

8

10

12

22

24

20

18

14

16

> £1bn £500m - £1bn £250m - £500m £100m - £250m <£100m

7

10

28 67


UK Rest of Europe North America Asia Pacific Middle East &Africa

Central &South America

4.7

14.6

4.1

1.6

0.4

£ b

illio

n

16

14

12

10

8

6

4

2

0(1)

8.6

All private equity – Funds raised by location of investor 2018 – Incremental amount raised during the year

Note: (1) UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey

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UK Rest of Europe North America Asia Pacific Middle East & Africa

Central &South America

%

100

90

80

70

60

50

40

30

20

10

0

70%

17%

1%

5%

2%2%

(1)

20%

28%

3%

58% 58% 58%

31%

2%

5%

3%

16%

15%

34%

9%

23%

3%

1%

2%

5%

12%

12%

4%

4%

6%

5%

3%

12%

1%

4%

9%

7%

7%

7%

3%

20%

25%

2%

25%

6%

6%

6%

3%

3%

5%

7%

17%

1%

1%

1%1%1%

All private equity – Funds raised by location and type of investor 2018 – Incremental amount raised during the year – % of amount

Academic inst. / endowments / foundationsBanksCapital markets & corporate investorsFamily officesFund of fundsGovernment agenciesInsurance companiesOther asset managersPension fundsPrivate individualsSovereign wealth fundsOthers

(2)

5%

Values below 0.5% are not shown


Note: (2) includes GP commitments


Funds raised by type of investor 2018 – Incremental amount raised during the year – % of amount


94 funds60 firms

5% 4%3%

5%

13%

2%

10%

4%

39%

4%

10%

1%

26 funds22 firms

4%

5%

2%

13%

10%

5%

39%

3%

11% 5%

1%

1%

32 funds24 firms

4%4%

20%

4%

5%

15%5%3%

3%

32%

4%

23 funds16 firms

5%9%

17%

3%

4%

4%

13%

37%

7%

Academic inst. / endowments / foundationsBanksCapital markets & corporate investorsFamily officesFund of fundsGovernment agenciesInsurance companiesOther asset managersPension fundsPrivate individualsSovereign wealth fundsOthers

(1)

All private equity funds

Buyout funds

Venture capital funds

Growth funds

Note: (1) includes GP commitments

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All private equity – Fundraising geographic breakdown 2018 – Source of funds – % of total amount

NorthAmerica42.8%

Central &South

America1.3%

Middle East& Africa4.7%

AsiaPacific12.1%

Rest ofEurope25.1%

UK(1)

13.9%



NorthAmerica17.2%

Central &South

America0.1%


AsiaPacific3.9%

Rest ofEurope20.2%

UK(1)

58.3%


Venture capital – Fundraising geographic breakdown 2018 – Source of funds – % of total amount

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Buyout – Fundraising geographic breakdown2018 – Source of funds – % of total amount

NorthAmerica43.3%

Central &South

America1.6%


AsiaPacific13.2%

Rest ofEurope25.6%

UK(1)

11.5%



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Investments statistics explainedIndustry statistics: figures relate to investments undertaken by BVCA full member firms based in the UK, and to those undertaken through an overseas office where the UK office was the lead adviser, ‘regardless of whether the investing fund was UK or overseas based’. As a result, more cross-border investments have been included in the BVCA data which therefore reflect more accurately the activity of BVCA full members, particularly those that invest through pan-European or global funds.

Equity value: The amount of capital invested to acquire shares in an enterprise. The equity value includes equity, quasi-equity, mezzanine, unsecured debt and secured debt provided by the private equity firm.


The following funds are excluded from the statistics: real estate funds, distressed debt funds, primary funds of funds and secondary funds of funds


Glossary

Venture capital Seed: Funding provided before the investee company has started mass production/distribution with the aim to complete research, product definition or product design, also including market tests and creating prototypes. This funding will not be used to start mass production/distribution.

Start-up: Funding provided to companies, once the product or service is fully developed, to start mass production/distribution and to cover initial marketing. Companies may be in the process of being set up or may have been in business for a shorter time, but have not sold their product commercially yet. The destination of the capital would be mostly to cover capital expenditures and initial working capital.

Other early-stage financing: Financing provided to companies that have initiated commercial manufacturing but require further funds to cover additional capital expenditures and working capital before they reach the break-even point. They will not be generating a profit yet.

Later-stage financing: Financing provided for an operating company, which may or may not be profitable. Late stage venture tends to be financing into companies already backed by VCs. Typically in C or D rounds.

Buyout Management buyout (MBO): Funds provided to enable current operating management and investors to acquire an existing product line or business. Institutional buyouts (IBOs), leveraged buyouts (LBOs) and other types of similar financing are included under MBOs for the purposes of this report.

Management buy-in (MBI): Funds provided to enable an external manager or group of managers to buy into a company.

Secondary buyout: Financing provided to acquire a company from another private equity firm. It may use a significant amount of borrowed capital to meet the cost of acquisition.

Add-on/bolt-on/build-up acquisition: The purchase of a company (Target Company) by an existing portfolio company (Platform Company) funded by a private equity fund.

PIPE: A private investment in public equity (PIPE) purchases of stock in a company at a discount to the current market value per share for the purpose of raising capital.

Public to private: Purchase of quoted shares with the purpose of de-listing the company.

Infrastructure: Purchase of controlling stakes in infrastructure businesses, often related to

transportation and communications systems, water and power lines and public institutions, including schools and care homes.

Growth A type of private equity investment (often a minority investment) in relatively mature companies that are looking for primary capital to expand and improve operations or enter new markets to accelerate the growth of the business.

Rescue / turnaround Financing made available to an existing business, which has experienced financial distress, with a view to re-establishing prosperity.

Replacement capital Minority stake purchase from another private equity investment organisation or from another shareholder or shareholders.

Refinancing bank debtFunds provided to enable a company to repay or restructure existing bank debt.

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2018 Investments at a glance • The total equity amount invested in portfolio companies in 2018 decreased by 7% year-

on-year to £20.64bn. The number of companies receiving investment rose 30% to 1,335.

• Buyout investment decreased by 12% year-on-year to £16.03bn. The number of companies backed decreased by 10% to 208. Mega buyouts accounted for 38% of the buyout market, followed by large buyouts at 36%. Small buyouts increased by 17% year-on-year to £408m with 80 companies backed. Mid-market saw a slight year-on-year decrease of 3% at £3.7bn investing in 103 companies. Regionally London received the largest percentage of UK buyout funding at 46%, followed by the South East at (21%) and Yorkshire and the Humber (9%).

• Venture capital investment increased by 21% to £0.99bn and more than doubled since 2015. 698 companies were venture-backed: a 44% increase. Seed investments decreased by 7% with £52m invested. Early stage investments increased 53% year-on-year in size to £480m. Start-up grew to £117m, an increase of 39%. Later stage investments decreased by 8% to £336m. ICT was the largest sector, receiving 53% of the total VC investment amount, followed by consumer goods and services (16%) and biotech and healthcare (15%).

• Growth capital investments increased by 66% to £3.24bn. 415 companies were backed, a 40% increase year-on-year. ICT received the most capital (28%), followed by consumer goods and services (25%) and business products and services (19%). 13.0

15.0 16.0

18.2

2.0

3.2

2.0

1.4

0.5

0.60.8

1.00.4

3.2

698

415

208

23

2.6

1.2

16.9

21.4

1,400

1,200

1,000

800

600

400

200

0

25

20

15

10

5

0

Number ofcompanies£ billion

22.2

20.6

173 158 230

346

2015 2016 2017 2018

94 105 38

372 356

324

485

297

BuyoutGrowthOther(2)

Venture

BuyoutGrowthOther(2)

VentureAm

ount

(£bn

)

Num

ber

of

com

pan

ies

Investments – Industry statistics – Amount and number of companies

2018 - Industry statistics All private equity


Amount £20.64bn £0.99bn £16.03bn £3.24bn £0.39bn

No. of companies 1,335 698 208 415 23

No. of firms 149 68 68 69 14

No. of funds 325 145 108 153 18

Note: (1) relates to investment stage of portfolio company

Note: (2) Other includes replacement capital, refinancing bank debt and rescue/turnaroundNote: Please refer to the appendix for further information


Investments by stage2018 – Industry statistics – % of amount and number of companies

2.31.60.6 0.3

15.7

0.81.1

77.7

0.1 0.1 6.7

8.6

28.3

8.5

30.6

0.80.8

15.4

SeedStart-upOther early stageLater stage ventureGrowth capitalRescue/turnaroundReplacement capitalBuyoutBridge equity financingRefinancing bank debt

% of amount % of number of companies


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Investments by stage 2015 - 2018 – Industry statistics – Amount

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2015 2016 2017 2018

£ m

illio

n

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

2015 2016 2017

£ m

illio

n

2018

Buyout

Growth capitalRescue/turnaround

Replacement capitalStart-upSeed

Later stage ventureOther early stage

Buyout





Investments by stage 2015 - 2018 – Industry statistics – Number of companies

2015 2016 2017 2018

Num

ber

of

com

pan

ies

800

700

600

500

400

300

200

100

02015 2016 2017

250

200

150

100

50

0

Num

ber

of

com

pan

ies

2018

Buyout




Buyout




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Buyout – Investments by equity bracket 2015 - 2018 – Industry statistics – Amount and number of companies

AmountSmall (< £10m)Mid-market(£10m - £100m)Large (£100m - £300m)Mega (> £300m)

No. of companiesSmall (< £10m)Mid-market(£10m - £100m)Large (£100m - £300m)Mega (> £300m)

2015 2016 2017 2018

£ m

illio

n

Num

ber

of

com

pan

ies

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

280

240

200

160

120

80

40

0

1,812

7,704

3,367

1484

44

45

89

5,187

6,377

3,257

173

8

3240

86

5,446

6,147

5,784

3,688

8,632

3,795

348 408

13

40

82

114103

80

31

14


Large buyout – Investments by equity bracket 2015 - 2018 – Industry statistics – Amount and number of companies

AmountLower large(£100 - £170m) Core large(£170m - £240m ) Upper large(£240m - £300m)

No. of companiesLower largeCore largeUpper large

2015 2016 2017 2018

£ m

illio

n

Num

ber

of

com

pan

ies

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

90

80

70

60

50

40

30

20

10

0

1,401

1,302

3,484

1,591

2,744

2,618

3,270

1,314

2,207

2,262

4,805

1,497

32

8

5

21

8

3

18 17

104

10

12

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All private equity – International investment flows 2018 – Amount

£7.44bn

£6.05bn

UK private equity firms investing into UK portfolio companies

UK private equity firms investing into overseas portfolio companies

£2.34bn Overseas private equity firms investing into UK portfolio companies

Note: Location of private equity firm relates to its global headquarters


Venture capital – International investment flows 2018 – Amount

£567m

£297m

UK private equity firms investing into UKportfolio companies

Note: Location of privateequity firm relates to its global headquarters.

UK private equity firms investing into overseas portfolio companies

£58m Overseas private equity firms investing into UK portfolio companies

Note: Location of private equity firm relates to its global headquarters

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All private equity – Investments by region 2018 – Industry statistics – % of amount

% Investment by region

0.5

8.8

43.8

16.6

5.5

4.4

3.0

3.4

7.2

7.5

2.51.83.7

LondonSouth EastSouth WestEast of EnglandWest MidlandsEast MidlandsYorkshire and The HumberNorth WestNorth EastScotlandWalesNorthern Ireland


Investments by stage and regions 2018 – Industry statistics – Amount

800

700

600

500

400

300

200

100

0London South East South West North West

£ m

illio

n

3,500

3,000

2,500

2,000

1,500

1,000

500

0London South

EastSouthWest

NorthWest

£ m

illio

n

Buyout




Buyout




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Investments by stage and regions 2018 – Industry statistics – Amount

160

140

120

100

80

60

40

20

0

Eas

t of

Eng

land

Wes

tM

idla

nds

Eas

tM

idla

nds

Yor

kshi

re &

The

Hum

ber

Nor

thE

ast

Sco

tland

Wal

es

Nor

ther

nIr

elan

d

£ m

illio

n

700

600

500

400

300

200

100

0

Eas

t of

Eng

land

Wes

tM

idla

nds

Eas

tM

idla

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Yor

kshi

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The

Hum

ber

Nor

thE

ast

Sco

tland

Wal

es

£ m

illio

n

Nor

ther

nIr

elan

d

Buyout




Buyout





Investments by stage and regions 2018 – Industry statistics – Number of companies

220

200

180

160

140

120

100

80

60

40

20

0London South East South West North West

Num

ber

of

com

pan

ies

60

50

40

30

20

10

0London South

EastSouthWest

NorthWest

Num

ber

of

com

pan

ies

Buyout




Buyout




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31

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Investments by stage and regions 2018 – Industry statistics – Number of companies

70

60

50

40

30

20

10

0

Eas

t of

Eng

land

Wes

tM

idla

nds

Eas

tM

idla

nds

Yor

kshi

re &

The

Hum

ber

Nor

thE

ast

Sco

tland

Wal

es

Nor

ther

nIr

elan

d

Num

ber

of

com

pan

ies

14

12

10

8

6

4

2

0

Num

ber

of

com

pan

ies

Eas

t of

Eng

land

Wes

tM

idla

nds

Eas

tM

idla

nds

Yor

kshi

re &

The

Hum

ber

Nor

thE

ast

Sco

tland

Wal

es

Nor

ther

nIr

elan

d

Buyout




Buyout





All private equity – Investments by sector 2018 – Industry statistics – % of amount and number of companies

Business products and services

ICT (Communications, computer and electronics)

Consumer goods and services

Biotech and healthcare

Financial and insurance activities

Chemicals and materials

Transportation

Agriculture

Construction

Energy and environment

Real estate

0% 5% 10% 15% 20% 25% 30% 35% 40%

24.4%11.7%

24.3%37.2%

19.4%21.5%

15.2%15.5%

6.6%6.7%

3.7%1.8%

1.5%2.1%

1.2%

1.0%1.6%

2.6%

1.0%

AmountNumber of companies


DIV

ES

TM

EN

TS

33

FU

ND

RA

ISIN

G


INV

ES

TM

EN

TS

Investments by sector 2015 - 2018 – Industry statistics – Amount

0

5

10

15

20

25

2015 2016

All private equity

2017 2018

£ b

illio

n

Venture capital

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

2015 2016 2017 2018

£ b

illio

n

TransportationReal estateICT (Communications, computer and electronics)Financial and insurance activitiesEnergy and environmentConsumer goods and servicesConstructionChemicals and materialsBusiness products and servicesBiotech and healthcareAgriculture

Buyout

2015 2016 2017 2018

£ b

illio

n

0

2

4

6

8

10

12

14

16

18

20Growth

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2015 2016 2017 2018

£ b

illio

n


Investments by sector 2015 - 2018 – Industry statistics – Number of companies

1,400

1,200

1,000

800

600

400

200

02015 2016 2017

All private equity

2018

Num

ber

of

com

pan

ies

Venture capital

800

600

400

200

02015 2016 2017 2018

Num

ber

of

com

pan

ies

TransportationReal estateICT (Communications, computer and electronics)Financial and insurance activitiesEnergy and environmentConsumer goods and servicesConstructionChemicals and materialsBusiness products and servicesBiotech and healthcareAgriculture

Buyout

250

200

150

100

50

02015 2016 2017 2018

Num

ber

of

com

pan

ies

Growth

450

400

350

300

250

200

150

100

50

02015 2016 2017 2018

Num

ber

of

com

pan

ies


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

DIV

ES

TM

EN

TS

Divestments statistics explainedIndustry statistics: figures relate to divestments undertaken by BVCA full member firms based in the UK, and to those undertaken through an overseas office where the UK office was the lead adviser, ‘regardless of whether the divesting fund is UK or overseas based’. As a result, more cross-border divestments have been included in the BVCA data which therefore reflect more accurately the activity of BVCA full members, particularly those that divest through pan-European or global funds.

Divestment amounts: (including write-offs) are recorded at cost (i.e. the total amount divested is equal to the total amount invested before).


The following funds are excluded from the statistics: real estate funds, distressed debt funds, primary funds of funds and secondary funds of funds.


Glossary

Sale to management: The buyer of the company is its management team.

Public offering:

• First divestment following flotation (IPO): The sale or distribution of a private company’s shares to the public for the first time by listing the company on the stock exchange.

• Sale of quoted equity post flotation: It includes sale of quoted shares only if connected to a former private equity investment, e.g. sale of quoted shares after a lock-up period.

Repayment of preference shares/ loans or mezzanine: If the private equity firm provided loans or bought preference shares in the company at the time of investment, then their repayment according to the amortisation schedule represents a decrease of the financial claim of the firm into the company, and hence a divestment.

Sale to another private equity firm: The buyer of the portfolio company is a private equity firm.

Sale to financial institution: A financial institution is an entity that provides financial services for its clients:

• Depositary Institutions: deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies

• Contractual Institutions: Insurance companies and pension funds

• Investment Institutes other than direct private equity firms.

Trade sale: The sale of a company’s shares to industrial investors.

Write-off: The value of the investment is eliminated and the return to investors is zero or negative.

37

INV

ES

TM

EN

TS


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

2018 Divestments at a glance

2018 - Industry statistics All private equity


Amount £8.75bn £0.25bn £6.98bn £1.28bn £0.24bn

No. of companies 504 97 172 211 39

No. of firms 103 40 54 48 15

No. of funds 239 63 115 108 24

Divestments – Industry statistics – % total amount divested at cost

Trade sale

Write-off

Other meansSale to management

Sale to financial institution

Sale to another private equity firm

Public offeringRepayment of preference

shares/ loans or mezzanine

38.2%

10%

3.6%

9.7%

31.3%

5.2%

1.1%

% of total amount divested at cost

Note: (1) Relates to the intitial investment stage of the company Note: Please refer to the appendix for further information

• Around 500 companies were exited in 2018, a similar number to 2017. By amount of former equity investments (divestments at cost), the total value was £8.75bn, a year-on-year decrease of 38%.

• The most prominent exit routes by amount at cost were trade sale (38.2%), sale to another private equity firm (31.3%) and public offering (10.0%). By number of companies, these three exit routes accounted for almost 45% of all divestments.

• Buyout divestments represented 80% by amount at cost and around 34% by number of companies of all exits in 2018. Most companies that were exited in 2018 operated in the business products and services, consumer goods and services and ICT sectors.

• Venture capital comprised around 19% of all divestments with 97 companies. The most prominent exit route was public offering, which represented more than 34% in amount at cost divested in 2018. Most companies that were exited operated in the ICT sector, followed by biotech and healthcare and consumer goods and services.

• Growth divestments represented 15% of all exits by amount at cost and 42% by number of companies. Of the companies that exited in 2018, most operated in consumer goods and services, ICT and business products and services sectors.


Divestments at cost by exit route – Venture capital/buyout/growth 2018 – Industry statistics – % of amount

Trade sale Write-off Sale to another private equity firm

Sale to management

Public offering Repayment of preference shares/loans or mezzanine


Other means


Growth£1.28bn

5%

23%

11%

17%19%

15%

9%

35%

4%

42%

9%7%

Buyout£6.98bn

6%

28%

34%

6%

5%

7%

14%

Venture £0.25bn

39

INV

ES

TM

EN

TS


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

Divestments at cost by exit route – Venture capital/buyout/growth 2018 – Industry statistics – % of number of companies

Trade sale Write-off Sale to another private equity firm

Sale to management

Public offering Repayment of preference shares/loans or mezzanine


Other means

31%

16%

13%

15%

4%

12%

7%

Venture 97 companies

Buyout172 companies

22%

7%

4%

24%

20%

5%

12%

6%

Growth211 companies

41%

8%

4%3%

5%

21%

12%

6%


Divestments at cost by exit route 2015 - 2018 – Industry statistics – Amount at cost

0

5

10

15

20

25

30

35

£ b

illio

n

2015 2016 2017 2018

Trade salePublic offeringWrite-offRepayment of preference shares/loans or mezzanineSale to another private equity firmSale to financial institutionSale to managementOther means

0

5

10

15

20

25

30

35

£ b

illio

n

2015 2016 2017 2018


41

INV

ES

TM

EN

TS


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

Divestments at cost by exit route 2015 - 2018 – Industry statistics – Number of companies

0

100

200

300

400

500

600

700

800

Num

ber

of

com

pan

ies

2015 2016 2017 2018

Trade salePublic offeringWrite offRepayment of preference shares/loans or mezzanieSale to another private equity firmSale to financial institutionSale to managementOther means

0

5

10

15

20

25

30

35

£ b

illio

n

2015 2016 2017 2018



All private equity – Divestments at cost by sector Industry statistics – Amount and number of companies (excluding write-offs)

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

140

120

100

80

60

40

20

0

£ b

illio

n

Num

ber

of

com

pan

ies

Bus

ines

s p

rod

ucts

an

d s

ervi

ces

Co

nsum

er g

oo

ds

and

ser

vice

s

ICT

(Co

mm

unic

atio

ns,

com

put

er a

nd e

lect

roni

cs)

Fina

ncia

l and

in

sura

nce

acti

viti

es

Bio

tech

and

he

alth

care

Co

nstr

ucti

on

Tra

nsp

ort

atio

n

Che

mic

als

and

m

ater

ials

Rea

l est

ate

Ene

rgy

and

en

viro

nmen

t

£ billionNumber of companies

122

2.49

1.77

1.32 1.26

0.64

0.33 0.25 0.22 0.14

85

60

116

30

11 13 1319

Values below 0.001 are not shown

43

INV

ES

TM

EN

TS


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

Divestments at cost by sector – Venture capital/buyout/growth 2018 – Industry statistics – % of amount (excluding write-offs)






Construction


Transportation


Real estate

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

31% 27% 19%

14%22% 32% 8%

12% 25%

17% 9% 18% 39%

17%

7% 14% 24%

2% 5% 4%

3% 6%

1% 6% 3%

4% 1%

BuyoutGrowthVenture






Construction


Transportation


Real estate

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

31% 27% 19%

14%22% 32% 8%

12% 25%

17% 9% 18% 39%

17%

7% 14% 24%

2% 5% 4%

3% 6%

1% 6% 3%

4% 1%

BuyoutGrowthVenture



Divestments at cost by sector – Venture capital/buyout/growth 2018 – Industry statistics – % of number of companies (excluding write-offs)







Construction

Transportation


Real estate

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

BuyoutGrowthVenture

22% 27% 30%

24% 15% 11%

11% 10% 23%

23% 28% 16%

8% 8% 2% 15%

5%2% 5%

4% 1% 4%

3% 3% 6%

2% 3%

1%

1%






Construction


Transportation


Real estate

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

31% 27% 19%

14%22% 32% 8%

12% 25%

17% 9% 18% 39%

17%

7% 14% 24%

2% 5% 4%

3% 6%

1% 6% 3%

4% 1%

BuyoutGrowthVenture

45

INV

ES

TM

EN

TS


DIV

ES

TM

EN

TS

FU

ND

RA

ISIN

G

All private equity – Divestments at cost by region

London

SouthEast

North West

South West

West Midlands

East of England

Yorkshire and The Humber

Scotland

North East

East Midlands

Wales

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

20%

38%

11%

8%

5%

4%

4%

3%

3%

2%

2%


Data tables


Table 1. 2018 – Funds raised by source

Type of sourceAmount raised

£m %

Academic inst. / endowment funds / foundations UK 255 0.7

Overseas 1,467 4.3

Total 1,722 5.0

Banks UK 160 0.5

Overseas 1,129 3.3

Total 1,289 3.8

Capital markets & corporate investors UK 155 0.5

Overseas 876 2.6

Total 1,031 3.0

Family offices UK 331 1.0

Overseas 1,437 4.2

Total 1,768 5.2

Fund of funds UK 787 2.3

Overseas 3,686 10.8

Total 4,472 13.1

Government agencies UK 313 0.9

Overseas 181 0.5

Total 494 1.4

Insurance companies UK 291 0.9

Overseas 3,157 9.3

Total 3,448 10.1

Type of sourceAmount raised

£m %

Other asset managers UK 273 0.8

Overseas 1,183 3.5

Total 1,456 4.3

Private pension funds UK 666 2.0

Overseas 2,947 8.6

Total 3,614 10.6

Public pension funds UK 530 1.6

Overseas 9,125 26.7

Total 9,655 28.3

Private individuals UK 937 2.7

Overseas 550 1.6

Total 1,487 4.4

Sovereign wealth funds UK - -

Overseas 3,467 10.2

Total 3,467 10.2

Others UK 49 0.1

Overseas 166 0.5

Total 215 0.6

Total UK 4,748 13.9

Total overseas 29,371 86.1

Grand total 34,119 100.0

1. UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey 2. Private individuals includes GP commitments

Data tables Fundraising


Data tables Fundraising

Table 2. 2018 – Funds raised by country

Country Amount raised

£m %

UK 4,748 13.9

Denmark 173 0.5

Finland 723 2.1

France 835 2.4

Germany 1,326 3.9

Ireland 123 0.4

Italy 211 0.6

Liechtenstein 255 0.7

Luxembourg 746 2.2

Netherlands 2,010 5.9

Norway 82 0.2

Spain 160 0.5

Sweden 626 1.8

Switzerland 1,212 3.6

Rest of Europe 89 0.3

United States 12,531 36.7

Canada 2,089 6.1

Asia Pacific 4,141 12.1

Middle East & Africa 1,592 4.7

Central & South America 446 1.3

Total 34,119 100

1. UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey


Data tables Investments

Table 3a. Investment by country

Country Number of companies % of companies Amount invested (£m) % of amount invested

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

UK 1,073 817 728 80 79 79 9,776 10,481 7,119 47 47 33

US 95 61 53 7 6 6 2,023 2,420 3,331 10 11 16

Europe 139 130 128 10 13 14 7,974 8,257 9,952 39 37 46

Rest of the world 28 22 16 2 2 2 865 1,072 1,023 4 5 5

Total 1,335 1,030 925 100 100 100 20,638 22,230 21,424 100 100 100

1. The number of companies in some quarters and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different quarters.

Table 3b. 2018 Quarterly investment by country

Country Number of companies % of companies Amount invested (£m) % of amount invested

Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total

UK 274 309 293 354 1,230 22 25 24 29 100 2,156 2,326 2,946 2,348 9,776 22 24 30 24 100

US 22 29 33 33 117 19 25 28 28 100 545 410 386 682 2,023 27 20 19 34 100

Europe 33 46 32 45 156 21 29 21 29 100 2,019 1,893 2,670 1,392 7,974 25 24 33 17 100

Rest of the world 8 6 8 11 33 24 18 24 33 100 384 173 6 302 865 44 20 1 35 100

Total 337 390 366 443 1,536 22 25 24 29 100 5,105 4,803 6,008 4,723 20,638 25 23 29 23 100



Table 4. Overseas investment by investment stage

Investment stage Number of companies % of companies Amount invested (£m) % of amount invested

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

Seed 14 11 6 5 5 3 9 10 4 0 0 0

Start-up 18 13 3 7 6 1 34 27 1 0 0 0

Other early stage 72 54 21 27 24 10 210 106 39 2 1 0

Later stage venture 34 25 20 13 11 10 107 216 259 1 2 2

Bridge equity financing 0 0 2 0 0 1 0 0 1 0 0 0

Total venture capital 138 103 52 52 46 26 360 359 304 3 3 2

Growth capital 64 38 45 24 17 22 956 958 1,551 9 8 11

Total growth capital 64 38 45 24 17 22 956 958 1,551 9 8 11

MBO/MBI 41 51 48 16 23 24 5,827 7,435 5,957 54 63 42

Secondary buyout 14 8 19 5 4 9 3,353 900 4,281 31 8 30

PIPE2

2 01

1 065

261 01

2 0

Public to private 3 2 1 1 975 215 8 2

Add-on/bolt-on/build-up acquisition 2 11 n/a 1 5 n/a 159 388 n/a 1 3 n/a

Infrastructure 0 0 n/a 0 0 n/a 0 0 n/a 0 0 n/a

Total buyout 59 75 69 23 34 34 9,403 9,958 10,453 87 85 73

Refinancing bank debt 0 0 2 0 0 1 0 0 20 0 0 0

Replacement capital2 7 3 1 3 2 143 473 102 1 4 1

Rescue/turnaround

Other n/a n/a 31 0 n/a 15 n/a n/a 1,876 n/a n/a 13

Total other stages 2 7 36 1 3 18 143 473 1,998 1 4 14

Total 262 213 197 100 100 100 10,862 11,749 14,305 100 100 100

1. The number of companies in some investment stage categories and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different investment stages. 2. Some investment stages have been amalgamated where there are instances of single deals, in order to preserve confidentiality.



Table 5. UK investment by investment stage

Investment stage Number of companies % of companies Amount invested (£m) % of amount invested

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

Seed 77 60 49 7 7 6 43 46 15 0 0 0

Start-up 99 54 50 9 6 7 83 58 47 1 1 1

Other early stage 311 202 145 29 24 19 270 207 112 3 2 2

Later stage venture 81 72 68 7 8 9 229 150 72 2 1 1

Bridge equity financing 2 8 5 0 1 1 1 3 17 0 0 0

Total venture capital 570 396 317 52 47 42 626 463 262 6 4 4

Growth capital 351 259 279 32 31 37 2,281 991 1,673 23 9 24

Total growth capital 351 259 279 32 31 37 2,281 991 1,673 23 9 24

MBO/MBI 102 106 68 9 12 9 3,835 4,677 2,164 39 45 30

Secondary buyout 2516 21

22 3

2,3151,565 2,377

2415 33

PIPE 0 0 0 0

Public to private 2 4 0 0 0 0 273 1,296 0 3 12 0

Add-on/bolt-on/build-up acquisition 15 26 n/a 1 3 n/a 175 649 n/a 2 6 n/a

Infrastructure 4 11 n/a 0 1 n/a 25 77 n/a 0 1 n/a

Total buyout 148 163 89 14 19 12 6,623 8,263 4,542 68 79 64

Refinancing bank debt11

3 61

0 1210

537 302

5 0

Replacement capital 12 20 1 3 108 220 1 3

Rescue/turnaround 10 16 16 1 2 2 37 119 102 0 1 1

Other n/a n/a 28 n/a n/a 4 n/a n/a 289 n/a n/a 4

Total other stages 21 31 70 2 4 9 247 763 641 2 7 9

Total 1,073 817 728 100 100 100 9,776 10,481 7,119 100 100 100

1. The number of companies in some investment stage categories and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different investment stages. 2. Some investment stages have been amalgamated where there are instances of single deals, in order to preserve confidentiality.



1. The number of companies in some investment stage categories and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different investment stages. 2. Size bandings are based on the amount of equity invested by BVCA private equity members, not the total transaction size.

Table 6. 2018 – MBOs/MBIs by investment size (UK)

SizeNumber of companies Amount invested

Number % £m %

Small (<£10m) 41 39 216 6

Mid-sized (£10m - £100m) 58 55 1,768 46

Large (£100m - £300m) 5 5 881 23

Mega (>£300m) 2 2 970 25

Total 102 100 3,835 100

Table 7. Average amount invested by stage (UK)

Investment stage Amount invested, £000s

2018 2017 2016

Seed 555 768 300

Start-up 838 1,072 935

Other early stage 868 1,025 772

Later stage venture 2,829 2,078 1,066

Bridge equity financing 347 328 3,302

Total venture capital 1,097 1,170 828

Growth capital 6,497 3,828 5,997

Total growth capital 6,497 3,828 5,997

MBO/MBI 37,600 44,122 31,829

Secondary buyout 92,59997,813 113,190

PIPE 0

Public to private 136,311 324,057 0

Add-on/bolt-on/build-up acquisition 11,663 24,959 n/a

Infrastructure 6,338 6,972 n/a

Total buyout 44,751 50,694 51,032

Refinancing bank debt19,064

178,998 5,075

Replacement capital 8,978 10,977

Rescue/turnaround 3,713 7,414 6,361

Other n/a n/a 10,331

Total other stages 11,754 24,624 9,158

Total 9,111 12,345 9,429

1. Some investment stages have been amalgamated where there are instances of single deals, in order to preserve confidentiality.



Table 8. Investment by industry sector (UK)

Industry sectorNumber of companies % of companies Amount invested (£m) % of amount invested

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

Agriculture 3 3 0 0 0 0 1 11 0 0 0 0

Biotech and healthcare 166 123 122 15 15 17 890 418 707 9 4 10

Business products and services 134 105 82 12 13 11 3,473 2,385 916 36 23 13

Chemicals and materials 22 12 8 2 1 1 127 194 14 1 2 0

Construction 21 12 17 2 1 2 208 388 115 2 4 2

Consumer goods and services 199 168 143 19 21 20 1,752 2,677 3,464 18 26 49

Energy and environment 34 35 33 3 4 5 57 296 76 1 3 1

Financial and insurance activities 57 50 32 5 6 4 608 2,063 539 6 20 8

ICT (Communications, computer and electronics) 404 277 267 38 34 37 2,472 925 1,011 25 9 14

Real estate 13 16 5 1 2 1 41 620 7 0 6 0

Transportation 20 16 19 2 2 3 147 504 269 1 5 4

Total 1,073 817 728 100 100 100 9,776 10,481 7,119 100 100 100



1. Some sectors have been amalgamated where there are instances of single deals, in order to preserve confidentiality.

Table 9. 2018 – Technology investment (UK)

Industry sector Number of companies Amount invested

Number % £m %

Agriculture 4 1 4 0

Biotech and healthcare 98 29 780 33

Business products and services 30 9 115 5

Chemicals and materials9 3 19 1

Construction

Consumer goods and services 8 2 8 0

Energy and environment 12 4 5 0

Financial and insurance activities 20 6 31 1

ICT (Communications, computer and electronics) 154 46 1,389 58

Real estate3 1 36 2

Transportation

Total 338 100 2,385 100



Table 10. Investment by region (UK)

Regions Number of companies % of companies Amount invested (£m) % of amount invested

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

London 348 282 204 32 35 28 4,278 4,937 2,723 44 47 38

South East 126 88 115 12 11 16 1,623 1,457 686 17 14 10

South East & London 474 370 319 44 45 44 5,902 6,394 3,409 60 61 48

South West 50 40 48 5 5 7 537 421 508 5 4 7

East of England 53 42 34 5 5 5 430 455 781 4 4 11

West Midlands 62 53 41 6 6 6 296 404 1,185 3 4 17

East Midlands 39 29 23 4 4 3 333 329 294 3 3 4

Yorkshire and The Humber 59 44 38 5 5 5 705 485 150 7 5 2

North West 84 85 78 8 10 11 735 944 539 8 9 8

North East 80 16 19 7 2 3 365 62 70 4 1 1

Scotland 66 65 58 6 8 8 177 923 131 2 9 2

Wales 74 52 50 7 6 7 241 57 49 2 1 1

Northern Ireland 32 21 20 3 3 3 53 7 2 1 0 0

Total 1,073 817 728 100 100 100 9,776 10,481 7,119 100 100 100



Table 11. Investment stage analysis by region (UK) – Number of companies

Regions

Venture capital Growth capital Buyout Other stages

Number % Number % Number % Number %

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

London 191 149 89 34 39 29 97 77 65 28 30 23 54 49 33 36 31 37 8 12 24 38 39 34

South East 51 34 55 9 9 18 42 27 43 12 10 15 29 23 10 19 15 11 5 5 8 24 16 11

South East & London 242 183 144 43 48 47 139 104 108 40 40 39 83 72 43 56 46 48 13 17 32 62 55 46

South West 14 15 13 3 4 4 31 18 25 9 7 9 5 67

3 48

01

4 03

6

East of England 38 31 24 7 8 8 6 9 6 2 3 2 6 3 4 24

419

6

West Midlands 29 17 13 5 4 4 24 17 19 7 7 7 8 18 7 5 11 82

26

3

East Midlands 12 10 3 2 3 1 18 7 7 5 3 3 9 12 10 6 8 11 0 3 0 4

Yorkshire and The Humber 23 21 16 4 5 5 22 13 10 6 5 4 12 10 6 8 6 7 2 3 6 10 10 9

North West 25 10 10 4 3 3 52 52 54 15 20 19 6 18 12 4 11 13

26

6

1019

9

North East 60 4 9 11 1 3 16 7 5 5 3 2 6 4 0 4 3 0 5 7

Scotland 35 32 24 6 8 8 26 23 27 7 9 10 6 10

4

4 6

4

2

8

6

11Wales 56 41 31 10 11 10 139 18

43 6

6 5 4 3 0 0 0 0

Northern Ireland 26 20 19 5 5 6 4 1 2 0 1 0 0 0 0 0

Total 560 384 306 100 100 100 351 259 279 100 100 100 149 158 89 100 100 100 21 31 70 100 100 100

1. The number of companies in some investment stage categories and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different investment stages. 2. Some regions have been amalgamated where there are instances of single deals, in order to preserve confidentiality.



Table 12. Investment stage analysis by region (UK) – Amount invested

Regions

Venture capital Growth capital Buyout Other stages

Amount (£m) % Amount (£m) % Amount (£m) % Amount (£m) %

2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016

London 326 229 104 52 49 40 711 339 742 31 34 44 3,066 3,760 1,616 46 46 36 175 609 263 71 80 41

South East 60 71 70 10 15 27 155 157 216 7 16 13 1,387 1,202 319 21 15 7 21 27 80 9 4 12

South East & London 386 300 173 62 65 66 866 496 958 38 50 57 4,454 4,962 1,935 67 60 43 196 636 343 79 83 53

South West 62 12 12 10 3 5 185 126 159 8 13 9 290 282904

4 320

01

103 00

16

East of England 67 33 23 11 7 9 9 18 46 0 2 3 351 403 5 539

4216

7

West Midlands 15 14 5 2 3 2 141 43 78 6 4 5 105 336 1,098 2 4 2422

43

1

East Midlands 10 7 1 2 1 0 121 73 38 5 7 2 202 237 250 3 3 5 0 6 0 1

Yorkshire and The Humber 11 18 7 2 4 3 94 48 57 4 5 3 599 386 62 9 5 1 1 32 24 0 4 4

North West 24 8 14 4 2 5 602 92 246 26 9 15 99 800 240 1 10 5

1045

39

46

6

North East 12 1 4 2 0 2 34 20 10 1 2 1 320 41 0 5 0 0 56 9

Scotland 19 48 12 3 10 5 57 53 68 2 5 4 100 794

54

2 10

1

28

25

4

4Wales 17 18 9 3 4 3 14021 13

62 1

84 21 1 0 0 0 0 0

Northern Ireland 3 3 2 0 1 1 31 1 20 0 0 0 0 0 0 0

Total 626 463 262 100 100 100 2,281 991 1,673 100 100 100 6,623 8,263 4,542 100 100 100 247 763 641 100 100 100



Table 13. 2018 – Industry sector analysis by region (UK) – Number of companies

Regions






Number % Number % Number % Number % Number %

London 71 36 41 31 44 77 144 36 25 15

South East 25 13 28 21 0 0 33 8 23 14

South West 13 7 4 3 0 0 15 4 11 7

East of England 4 2 5 43 5

17 4 21 13

West Midlands 8 4 15 11 14 3 12 7

East Midlands 6 3 3 2 3 5 11 3 8 5

Yorkshire and The Humber 11 6 8 6

5 9

20 5 7 4

North West 23 12 12 9 29 7 14 8

North East 17 9 5 4 38 9 9 5

Scotland 11 6 9 7 0 0 28 7 11 7

Wales 6 3 2 12 4

41 10 18 11

Northern Ireland 4 2 2 1 14 3 7 4

Total 199 100 134 100 57 100 404 100 166 100

1. Some regions have been amalgamated where there are instances of single deals, in order to preserve confidentiality



Table 14. 2018 – Industry sector analysis by region (UK) – Amount invested

Regions






Amount (£m) % Amount

(£m) % Amount (£m) % Amount

(£m) % Amount (£m) %

London 945 54 999 29 502 83 1,423 58 301 34

South East 195 11 968 28 0 0 238 10 107 12

South West 120 7 117 3 0 0 76 3 202 23

East of England 18 1 41 17 1

283 11 86 10

West Midlands 43 2 132 4 29 1 66 7

East Midlands 100 6 37 1 12 2 82 3 33 4

Yorkshire and The Humber 100 6 466 13

87 14

40 2 31 4

North West 151 9 248 7 217 9 22 3

North East 27 2 293 8 23 1 18 2

Scotland 24 1 89 3 0 0 34 1 14 2

Wales 18 1 70 20 0

16 1 8 1

Northern Ireland 10 1 11 0 10 0 1 0

Total 1,752 100 3,473 100 608 100 2,472 100 890 100


Data tables Divestments

1. The number of companies in some divestment categories and their subtotals add up to more than the total number of companies divested from. This is due to some companies being divested from by more than one method within the year.

Table 15. 2018 – Divestments

Type of divestment Amount divested Number of divestments Number of companies

£m % % %

Trade sale 3,341 38 189 23 122 23

Public offering 875 10 89 11 57 11

Write-off 318 4 40 5 33 6

Repayment of preference shares/ loans or mezzanine 847 10 271 33 166 31

Sale to another private equity firm 2,741 31 97 12 63 12

Sale to financial institutions 454 5 38 5 31 6

Sale to management 81 1 61 7 32 6

Other means 92 1 46 6 30 6

Total 8,748 100 831 100 534 100

Note: All figures in this report have been rounded to the nearest integer or decimal. For this reason individual figures may not sum to totals.

NumberNumber


Methodology and definitions

AP

PE

ND

IX



Investments at a glance

The number of companies in some investment stage categories and their subtotals add up to more than the total number of companies invested in. This is due to some companies receiving more than one investment within the year at different investment stages.

The number of firms in some investment stage categories and their subtotals add up to more than the total number of all private equity firms. This is due to some firms investing in companies at different investment stages within the year.

The number of funds in some investment stage categories and their subtotals add up to more than the total number of all private equity funds. This is due to some funds investing in companies at different investment stages within the year.

Divestments at a glance

The number of companies in initial investment stage categories and their subtotals add up to more than the total number of companies divested from. This is due to some companies receiving more than one investment at different investment stages.

The number of firms in initial investment stage categories and their subtotals add up to more than the total number of all private equity firms that divested from their portfolio. This is due to some firms divesting from multiple companies at different initial stages of investment.

The number of funds in initial investment stage categories and their subtotals add up to more than the total amount of all private equity funds that divested from their portfolio. This is due to some funds divesting from multiple companies at different initial stages of investment.

Industry sectors

The classification of individual company investments by industry and subsector is based on statistical classification of economic activities in the European Community (NACE) code.

Technology classification

A company that has exclusive ownership of certain intellectual property rights such as design rights, patents, copyrights, etc. which are critical elements in adding value to a company, developed in-house by the company’s permanent staff. Although companies possessing these attributes are not limited to specific industries, they are most frequently found in ICT (Communications, computer and electronics) and healthcare & biotech. For the purposes of this report, investments defined as ‘high-tech’ are included in table 9.

Foreign currency conversion

Where investment information was collected in foreign currencies on the EDC platform, the amounts were converted into Sterling using the exchange rates on the date of transaction.

Private equity definitions

The term private equity is generally used in Europe to cover the industry as a whole, including both buyouts and venture capital.

Private equity describes equity investments in unquoted companies, often accompanied by the provision of loans and other capital bearing an equity-type risk.



AP

PE

ND

IX

Types of private equity firms

Independents: These can either be firms, funds or investment trusts, either publicly listed or private, which raise their capital from external sources.

Captives: These organisations invest their own money, and/or manage or invest funds on behalf of a parent organisation. In the latter case, the private equity firm would be a wholly owned subsidiary or division of the parent, usually a financial institution.

Semi-captives: These organisations invest funds on behalf of a parent company, or their own funds, in addition to investing funds raised within the last five years from external sources.

UK regions

The UK regions (formerly known as Government offices for the regions) are used throughout this report to classify the location of individual company investments. The composition of regions is listed below.

North East

ClevelandDurhamNorthumberlandTyne and Wear

East Midlands

DerbyshireLeicestershireLincolnshireNorthamptonshireNottinghamshire

South East

BerkshireBuckinghamshireEast SussexHampshireIsle of WightKentOxfordshireSurreyWest Sussex

North West

CheshireCumbriaGreater ManchesterLancashireMerseyside

West Midlands

Hereford and WorcesterShropshireStaffordshireWarwickshireWest Midlands

London

Yorkshire and The Humber

HumbersideNorth YorkshireSouth YorkshireWest Yorkshire

East of England

Bedfordshire CambridgeshireEssex HertfordshireNorfolk Suffolk

South West

AvonCornwallDevonDorsetGloucestershireSomersetWiltshire

Wales

Northern Ireland

Scotland



Industry classifications

Main business sector Subsector 1 Subsector 2 Agriculture Agriculture Crop cultivation

Forestry, logging and related servicesFishing, hunting and animal husbandry Mixed farming

Business products & services Business products Industrial measurement, sensing and control equipmentBusiness and industrial productsManufacturing: other

Business services Business and industrial servicesChemicals and materials Materials Materials

Coal and metal oresPlasticTextile fibres

Chemicals Specialty chemicalsOrganic chemicals

Chemical and materials: other Chemical and materials: otherChemical and materials: services

ICT (Communications & computer and electronics) Online platforms Online platformsSoftware Application software

Systems softwareSoftware: other

Computer hardware Computer hardwareComputer services Data management services

Computer: retail /wholesale & repair activitiesTelecom hardware Communications equipmentTelecom services Telecom carriers

Broadcasting, publications and content providersCommunications: retail /wholesale & repair activities

67| BVCA Report on Investment Activity 2018 67


APPENDIX

Main business sector Subsector 1 Subsector 2 Construction Construction Construction materials

Construction: related activities

Consumer goods & services Consumer products manufacturing Food and beverages

Fashion industry

Household articles

Household furniture

Other consumer products manufacturing

Consumer related services Restaurants, food services

Arts galleries & related services

Educational and training products/services

Public services (excl. education)

Hospitality, sports and entertainment facilities

Consumer services: other

Consumer products retailing Retail of food and beverages

Retail of fashion products

Retail of household articles

Other consumer products retailing

Energy and environment Energy Gas and oil

Hydroelectricity

Alternative energy

Energy related products and equipment

Energy related services

Energy: other

Environment Sorting, recycling and processing of waste

Environmental services: other (pollution measurement, noise abatement services, nature and landscape protection services … )



Main business sector Subsector 1 Subsector 2 Financial and insurance activities Financial institutions and services Banks

Insurance Financial services: other

Real estate Real estate Real estateHealthcare & biotech Biotechnology Biotechnology laboratories and services

Biotechnology products and equipmentHealthcare Healthcare institutions and services

Pharmaceuticals and drug deliveryMedical devices and suppliesMedical equipmentHealthcare: other

Transportation Transportation: services Logistics servicesCourier servicesMeans of transport: repair and maintenance

Transportation: manufacturing Means of transport: manufacturing

Disclaimer

The data provided has been collected from 177 BVCA member GPs. The number of respondents may fluctuate year-on-year due to eligibility and other criteria.

BVCA has taken steps to ensure the reliability of the information presented. However, BVCA cannot guarantee the ultimate accuracy of the data and therefore BVCA does not accept responsibility for any decision made or action taken based on the information provided.


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NTA

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ContactsFor further information contact

Noelle Buckley Director, Research 020 7492 0416

Phoebe MacDonald Manager, Research 020 7492 0432

Martin Senk Senior Research Executive 020 7492 0412

Henal Chudasama Senior Research Executive 020 7492 0427

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