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UK's Share Of Global Private Equity Triples

by Robert Lee, Tax-News.com, London

13 August 2007


Faster growth in the raising of private equity funds has resulted in the UK's global share increasing from 10% in 2004 to 30% in 2006 according to a new report by a body which promotes the UK's financial services industry.

The report, Private Equity 2007, by International Financial Services London (IFSL), revealed that around 85% of UK funds were raised to finance buyouts, with nearly three-quarters of funds coming from overseas, mainly from pension funds and funds of funds.

The UK accounted for 14% of global investments in 2006, down from 21% in the previous year. However, at 2.2% of GDP, the UK has a higher ratio of investments and funds raised than any other country.

A record $365bn 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 $335bn, 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, IFSL revealed. Financing of buyouts was the biggest growth area globally, as indicated by its share of investments growing from 21% in 2000 to 83% in 2006.

The 2006 regional breakdown of private equity activity shows that North America accounted for 60% of global private equity investments and 47% of funds raised, although its market share has fallen since 2000. Between 2000 and 2006, Europe's share of activity increased, particularly funds raised which jumped from 21% to 44%. The Asia-Pacific region's share of investments increased from 6% to 14% during this period.

A comprehensive report in our Intelligence Report series examining tax-sheltering arrangements for investors, including Venture Capital, Forest Finance, Film Finance, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report5.asp

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