Foreign investors pour £3.5 billion into UK firms in May-June

Between May and July 2024, foreign investors significantly increased their presence in the UK private equity market, investing approximately £3.5 billion in local businesses. This investment represented a 3% rise compared to the previous three-month period, highlighting the ongoing trend of foreign firms acquiring substantial stakes in UK companies. Notably, while only about 10% of deals involved foreign investors, these transactions accounted for around 60% of the total investment amount during this timeframe. The north west of England experienced the most substantial growth in equity funding, largely driven by a £500 million investment in RSK Group, an environmental consultancy based in Cheshire. This surge in funding comes amid a broader trend where companies are opting to remain private for extended periods, prompting investors to seek opportunities in private equity. The private equity sector has garnered increased scrutiny from the Bank of England, which is assessing the potential risks associated with its rapid growth and its role as a significant funding source for businesses alongside traditional bank loans. Prominent private equity-owned companies include major supermarkets like Asda and Morrisons, with recent high-profile deals such as Apollo Global Management's acquisition of Evri for £2.7 billion. As of July, the UK had approximately 5.4 million registered companies, reflecting a year-on-year increase of about 300,000. This growth indicates a trend of resilience and adaptability among businesses, supported by strategic investments in key industries such as technology and life sciences, which are seen as vital for future growth.