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IPE special report May 2018

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UK funds double private equity investment in 2001

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UK – The amount invested by UK pension funds in private equity almost doubled last year from £817m (€1,309m) to £1,594m (€2,554m), says the latest British Venture Capital Association (BVCA) and PricewaterhouseCoopers (PCW) private equity survey.

The BVCA says UK pension funds are being encouraged to view private equity as an accepted asset class thanks mainly to the Myners Review, BVCA campaigning and strong returns.

However, the news contradicts the warning from Nick Fitzpatrick, head of global investment consulting at Bacon & Woodrow, that private equity was suffering as pension funds moved their strategic asset allocation from equities to bonds.

Speaking at a private equity conference, Fitzpatrick argued that UK pension funds viewed private equity as “trouble” and were staying away from it.

A spokesman for the BVCA says the facts speak for themselves. “We are extremely pleased with the finding that UK pension funds are showing increasing confidence in private equity. Our survey has produced the necessary evidence to support this,” he says.

UK pension funds still lag behind their international counterparts according to the report. International non-UK pension funds invested £3,581m (€5,738m) last year in private equity, more than double their UK counterparts. The gap has narrowed, however, since in 2000, overseas funds invested over three times as much.

The report is the result of a questionnaire issued to BVCA members, asking them how they raised money from various types of institutional investors, such as pension funds and insurance companies. It also asked for the country of origin of the institutions.

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