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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.
3| BVCA Report on Investment Activity 2018
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
4 | BVCA Report on Investment Activity 2018
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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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.
6 | BVCA Report on Investment Activity 2018
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%.
8 | BVCA Report on Investment Activity 2018
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
10 | BVCA Report on Investment Activity 2018
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: (1) UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey
Note: (2) includes GP commitments
12 | BVCA Report on Investment Activity 2018
Funds raised by type of investor 2018 – Incremental amount raised during the year – % of amount
Values below 0.5% are not shown
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%
Note: (1) UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey
14 | BVCA Report on Investment Activity 2018
NorthAmerica17.2%
Central &South
America0.1%
Middle East& Africa0.3%
AsiaPacific3.9%
Rest ofEurope20.2%
UK(1)
58.3%
Note: (1) UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey
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%
Middle East& Africa4.9%
AsiaPacific13.2%
Rest ofEurope25.6%
UK(1)
11.5%
Note: (1) UK includes Bermuda, British Virgin Islands, Cayman Islands, Channel Islands, Guernsey, Isle of Man and Jersey
16 | BVCA Report on Investment Activity 2018
17| BVCA Report on Investment Activity 2018
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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 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
18 | BVCA Report on Investment Activity 2018
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
Venture capital(1) Buyout(1) Growth(1) Other(1)
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
20 | BVCA Report on Investment Activity 2018
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
Values below 0.05% are not shown
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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
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
22 | BVCA Report on Investment Activity 2018
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
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
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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
24 | BVCA Report on Investment Activity 2018
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
26 | BVCA Report on Investment Activity 2018
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
28 | BVCA Report on Investment Activity 2018
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
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
DIV
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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
nds
Yor
kshi
re &
The
Hum
ber
Nor
thE
ast
Sco
tland
Wal
es
£ m
illio
n
Nor
ther
nIr
elan
d
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
30 | BVCA Report on Investment Activity 2018
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
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
DIV
ES
TM
EN
TS
31
FU
ND
RA
ISIN
G
| BVCA Report on Investment Activity 2018
INV
ES
TM
EN
TS
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
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
Buyout
Growth capitalRescue/turnaround
Replacement capitalStart-upSeed
Later stage ventureOther early stage
32 | BVCA Report on Investment Activity 2018
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
Values below 0.5% are not shown
DIV
ES
TM
EN
TS
33
FU
ND
RA
ISIN
G
| BVCA Report on Investment Activity 2018
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
34 | BVCA Report on Investment Activity 2018
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
35| BVCA Report on Investment Activity 2018
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 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.
36 | BVCA Report on Investment Activity 2018
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
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RA
ISIN
G
2018 Divestments at a glance
2018 - Industry statistics All private equity
Venture capital(1) Buyout(1) Growth(1) Other(1)
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.
38 | BVCA Report on Investment Activity 2018
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
Sale to financial institution
Other means
Values below 0.5% are not shown
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
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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
Sale to financial institution
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%
40 | BVCA Report on Investment Activity 2018
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
Trade salePublic offeringWrite-offRepayment of preference shares/loans or mezzanineSale to another private equity firmSale to financial institutionSale to managementOther means
41
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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
Trade salePublic offeringWrite-offRepayment of preference shares/loans or mezzanineSale to another private equity firmSale to financial institutionSale to managementOther means
42 | BVCA Report on Investment Activity 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
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Divestments at cost by sector – Venture capital/buyout/growth 2018 – Industry statistics – % of amount (excluding write-offs)
ICT (Communications, computer and electronics)
Business products and services
Consumer goods and services
Biotech and healthcare
Financial and insurance activities
Construction
Energy and environment
Transportation
Chemicals and materials
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
ICT (Communications, computer and electronics)
Business products and services
Consumer goods and services
Biotech and healthcare
Financial and insurance activities
Construction
Energy and environment
Transportation
Chemicals and materials
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
Values below 0.5% are not shown
44 | BVCA Report on Investment Activity 2018
Divestments at cost by sector – Venture capital/buyout/growth 2018 – Industry statistics – % of number of companies (excluding write-offs)
ICT (Communications, computer and electronics)
Consumer goods and services
Business products and services
Biotech and healthcare
Financial and insurance activities
Energy and environment
Construction
Transportation
Chemicals and materials
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%
ICT (Communications, computer and electronics)
Business products and services
Consumer goods and services
Biotech and healthcare
Financial and insurance activities
Construction
Energy and environment
Transportation
Chemicals and materials
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
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DIV
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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%
46 | BVCA Report on Investment Activity 2018
47| BVCA Report on Investment Activity 2018
Data tables
48 | BVCA Report on Investment Activity 2018
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
49| BVCA Report on Investment Activity 2018
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
50 | BVCA Report on Investment Activity 2018
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
51| BVCA Report on Investment Activity 2018
Data tables Investments
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.
52 | BVCA Report on Investment Activity 2018
Data tables Investments
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.
53| BVCA Report on Investment Activity 2018
Data tables Investments
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.
54 | BVCA Report on Investment Activity 2018
Data tables Investments
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
55| BVCA Report on Investment Activity 2018
Data tables Investments
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
56 | BVCA Report on Investment Activity 2018
Data tables Investments
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
57| BVCA Report on Investment Activity 2018
Data tables Investments
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.
58 | BVCA Report on Investment Activity 2018
Data tables Investments
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
59| BVCA Report on Investment Activity 2018
Data tables Investments
Table 13. 2018 – Industry sector analysis by region (UK) – Number of companies
Regions
Consumer goods and services
Business products and services
Financial and insurance activities
ICT (Communications, computer and electronics)
Biotech and healthcare
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
60 | BVCA Report on Investment Activity 2018
Data tables Investments
Table 14. 2018 – Industry sector analysis by region (UK) – Amount invested
Regions
Consumer goods and services
Business products and services
Financial and insurance activities
ICT (Communications, computer and electronics)
Biotech and healthcare
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
61| BVCA Report on Investment Activity 2018
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
62 | BVCA Report on Investment Activity 2018
63| BVCA Report on Investment Activity 2018
Methodology and definitions
AP
PE
ND
IX
64 | BVCA Report on Investment Activity 2018
Methodology and definitions
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.
65| BVCA Report on Investment Activity 2018
Methodology and definitions
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
66 | BVCA Report on Investment Activity 2018
Methodology and definitions
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
Methodology and definitions
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 … )
68 | BVCA Report on Investment Activity 2018
Methodology and definitions
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.
69| BVCA Report on Investment Activity 2018
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NTA
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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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