Faster growth in raising of private equity funds has resulted in the UK’s global share increasing from 10 percent in 2004 to 30 percent in 2006 according to IFSL’s report Private Equity 2007.
Around 85 percent of UK funds were raised to finance buyouts with nearly three-quarters of funds coming from overseas, mainly from pension funds and fund of funds. The UK accounted for 14 percent of global investments in 2006, down from 21 percent in the previous year. At 2.2 percent of GDP, the UK has a higher ratio of investments and funds raised than any other country.
A record $365 billion of private equity was invested globally in 2006, up nearly three times on the previous year. Private equity fund raising also surpassed prior years with $335 billion, up a quarter on 2005.
Improved market confidence and trading conditions and strong performance along with stable long-term returns have contributed to the pick-up in activity in 2006. Financing of buyouts was the biggest growth area globally as indicated by its share of investments growing from 21 percent in 2000 to 83 percent in 2006.