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UK PE Deals by High Net Worth Individuals Reached £2.64bn in 2022

by Growthdeck Team

9 March 2023

News industry  

Our research shows that UK Private Equity deals undertaken by High Net Worth and Ultra High Net Worth individuals, including a number of football club acquisitions, reached a value of £2.64bn last year.

UHNW individuals are increasingly preferring to lead private equity deals themselves as they can access the returns of that asset class while avoiding management fees and ‘carry’ associated with investing through a PE fund.

Private equity has consistently outperformed the UK public markets, offering average returns of 17.5% per year for assets held for a period of ten years to 2021, compared to the 7.7% per year returned by the FTSE All Share index over the same period*.

Our CEO, Ian Zant-Boer, says many HNW and UHNW entrepreneurs are particularly attracted to acquiring a stake in a business and helping it grow.

“A significant portion of the UK High Net Worth population come from an entrepreneurial background. For these individuals, making a major investment in a business in a PE deal brings similar satisfaction to growing their own companies.”

“A growing number of wealthy individuals recognise the high-return opportunity from PE deals, but also the sense of accomplishment they can get from helping a business expand.”

The largest private equity deal led by an individual was Todd Boehly’s takeover of London football club Chelsea, backed by PE firm Clearlake Capital. Football clubs have long been a popular trophy asset for UHNW investors.

Other football club acquisitions in the past year include Hull City FC, bought by Acun Ilicali, known as ‘the Turkish Simon Cowell’, and American businessman Bill Foley’s purchase of AFC Bournemouth.

Ian Zant-Boer explains:

“The romance of football isn’t the only reason HNWs are purchasing football clubs. They can also boost an individual’s international profile and act as an excellent means to generate long-term capital growth.”

One way many HNW individuals make PE investments is through the Government’s flagship Enterprise Investment Scheme (EIS), a venture capital investment scheme that allows individual investors to back high-growth British businesses.

EIS includes up to 30% income tax relief as well as allowing investors to not pay CGT on any gains realised after three years. They can also defer capital gains tax due on the sale of another asset by re-investing the gain in an EIS-qualifying company and pass on EIS shares to their heirs free of inheritance tax.

* British Private Equity and Venture Capital Association

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