PE industry invests heavily in research, development - BVCA reportPrivate equity-backed companies continue to be a major driver of the UK economy, The Economic Impact of Private Equity in the UK report published by The British Private Equity and Venture Capital Association confirms. In the five years to 2006/2007, in private equity-backed companies, research and development expenditure increased by 14 per cent per annum, compared to a national growth rate of just one per cent per annum.
Corporate investment rose by 11 per cent per annum, compared to three per cent per annum nationally.
The number of people employed worldwide in UK companies that have been backed by private equity increased by an average of eight per cent per annum in the five years to 2006/2007.
A total of 91 per cent of the surveyed companies said ‘that without private equity the business would not have existed at all or would have developed less rapidly.’
The study also found that in 2006/2007, private equity-backed companies contributed nearly £35bn in taxes – enough to pay the salary of every nurse and police officer in the UK.
Speaking at the report’s launch at the Corporation of London, BVCA chief executive Simon Walker, ‘Private equity plays a critical role in powering the engine of the British economy. As this research shows, it has an enviable track record of investing in research and development, making businesses more competitive, innovative and productive. As an industry, we must do more to tell this story and to correct misunderstandings about our sector. That is why we are now embarking on a major new research programme – to ensure that debate over the role of private equity is based on fact, not fiction.’
The report, undertaken by IE Consulting, was compiled from 1,013 responses to a survey of private equity-backed firms in the UK over the course of spring/summer 2007.
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