Strong investment: Strong fundraising activity has pushed up AUM, supporting revenue growth

The United Kingdom is one of the largest European centres for the management of private equity investments and funds, and is second only to the United States in terms of global importance. Private equity firms pool investment funds (capital commitments) to purchase other companies. Industry operators attempt to improve a company's performance by implementing managerial and operational changes, before selling the company for a profit. Private equity transactions often involve a large amount of debt. The industry's key source of revenue is fees derived from management fees, calculated as a percentage of assets under management (AUM).Over the five years through 2018-19, IBISWorld expects that industry revenue will increase at a compound annual rate of 4.8%...read more.

Industry Statistics & Market Size
Revenue
£2.3bn
Annual Growth 14-19
4.8%
Forecast Growth 19-24
Profit
Employment
6,679
Businesses
250

Industry Threats & Opportunities

  • Declining investor appetite due to uncertainty is expected to limit current-year growth
  • Industry operators are increasingly diversifying their investments as competition increases
  • Lucrative investment opportunities in emerging markets are anticipated to emerge over the period
  • Industry Report - Industry Investment Chapter

    The level of investment required is determined by comparing the human and capital equipment factors of production using wages and depreciation as proxies. Comparatively high depreciation costs indicate a high level of investment in depreciable assets, such as buildings and equipment, and therefore high capital intensity. Comparatively high wage costs suggest high labour intensity.The industry exhibits a low level of capital intensity with an estimated labour to capital-to-labour ratio of 1:22.12 in 2018-19. This indicates that for every £1.00 spent on capital, £22.12 will be spent on labour. This industry’s services are based around the knowledge and strategic decision-making skills of fund managers and analysts, who are highly paid. Cap...purchase to read more.

    Additional Insights for the Private Equity Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Private Equity Industry are

  • Access to highly skilled workforce
  • Having a good reputation
  • Having a clear market position
  • IBISWorld analysts also discuss how external factors such as FTSE 100 and Official bank rate in the Private Equity industry impact industry performance..

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    What's in this report

    What is the Private Equity Industry?

    Companies in this industry manage private equity funds – a type of collective investment fund that targets investment in private companies – on behalf of investors such as pension funds, insurance companies and individual investors. They generate revenue by charging management fees for their services.

    Industry Products
  • Buyouts: MBO, MBI, LBO
  • Expansion capital
  • Replacement capital
  • Venture capital
  • Industry Activities
  • Managing private equity funds
  • Helping to manage portfolio companies
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • FTSE 100
  • Official bank rate
  • Demand from pension funding
  • Business profit
  • Demand from investment trusts

  • Current Performance
  • Fundraising activity
  • Investment returns
  • Challenging conditions
  • External competition
  • Regulatory restraints
  • Current-year concerns
  • Market structure

    and profit

  • Chart: Revenue Growth

  • Industry Outlook
  • Growing funds
  • Increasing investment
  • Investment returns
  • Market structure and future challenges
  • Table: Private Equity Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Private Equity Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Banks
  • General Insurance
  • Pension Funding
  • Consumers

  • Key Selling Industries
  • Investment Banking & Securities Brokerage
  • Stock & Commodity Exchanges

  • Products & Services
  • Buyouts: MBO, MBI, LBO
  • Replacement capital
  • Expansion capital
  • Other
  • Venture capital
  • Chart: Private Equity Industry Products and Services Segmentation

  • Demand Determinants
  • Demand for investment
  • Demand for funding

  • Major Markets
  • Pension funds
  • Government agencies and sovereign wealth funds
  • Banks, insurance companies and other financial institutions
  • Private and high-net-worth individuals
  • Funds of funds
  • Family offices
  • Other
  • Chart: Major Market Segmentation for the Private Equity Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesOutsourcingRent, utilities and depreciationOther
  • Chart: Cost Structure Benchmarking – Sector vs Private Equity

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Private Equity Industry

  • Industry Globalization
    The Blackstone Group LP, BC Partners LLP,
  • Table: The Blackstone Group LP - financial performance
  • Table: BC Partners LLP - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Private Equity Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Private Equity Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Assets Under Management (Aum)
  • The market value of the assets a private equity fund manages on behalf of its investors.
  • Base Cost Shift
  • A tax exemption on capital gains (or profit).
  • Collective Investment Scheme
  • A fund that pools investors' money before investing, in order to participate in a wider range of investments and to generate economies of scale in terms of transaction and management costs.
  • Leveraged Buyout (Lbo)
  • A private equity buyout funded with a high proportion of debt financing.
  • Mezzanine Financing
  • Used to fund a growth opportunity or in private business’, for the company owners to take money out of the company for other uses, or to facilitate a management buyout.
  • Portfolio Company
  • A company that a private equity firm has invested in and has in its portfolio.
  • Private Equity Fund
  • A structure into which a pool of money is raised from investors before being invested in private equity deals.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Private Equity market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Private Equity:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Private Equity market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Private Equity, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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