Rachel Reeves: Growth through investment, fiscal discipline
Chancellor Rachel Reeves delivered a keynote address that struck a balance between ambition and realism. Emphasising that 'if growth is the challenge, investment is the solution,' Reeves reaffirmed her commitment to supporting the VC and PE sectors. She acknowledged the fiscal constraints facing the government but maintained that continued investment, particularly through pension reform and infrastructure, was essential to long-term prosperity.
However, Reeves also addressed concerns around recent tax changes, including the treatment of carried interest and the abolition of the non-dom regime. While these measures were framed as necessary for fiscal responsibility, she recognised the need to maintain the UK’s competitiveness and attractiveness to international capital.
Political shifts: Beth Rigby on the rise of reform UK
Sky News political editor Beth Rigby provided a sharp analysis of the evolving political landscape, particularly the rise of the Reform UK party. Her comments at the conference follow a widely discussed interview with Nigel Farage, where Rigby highlighted the party’s growing influence and the potential implications for mainstream politics.
Celebrating Women in VC: A data-driven success story
A standout theme of the conference was the celebration of women in VC. According to the latest BVCA and Level 20 report, women now represent 27% of UK-based investment professionals, with 23% of senior roles in VC held by women. More compellingly, data continues to show that female-founded VC-backed companies often outperform their male counterparts in terms of returns, challenging outdated assumptions and reinforcing the value of diversity in investment decision-making.
Universities as engines of innovation
The UK’s world-class universities were recognised as critical to the country’s innovation pipeline. Institutions like Oxford, Cambridge and Imperial College London continue to produce high-impact spinouts, particularly in AI, deep tech and health tech. However, speakers noted that more could be done to streamline commercialisation processes and better connect academic research with VC.
The economic footprint of PE and VC
The BVCA’s latest economic impact report revealed that PE and VC-backed businesses now support over 2.5 million jobs across 12,900 firms in the UK, contributing nearly £200 billion to GDP, equivalent to 7% of the national total. These figures underscore the sector’s central role in the UK economy, not just in London but across all regions.
Defence and dual-use innovation
Defence tech emerged as a growing area of interest, with UK-based companies raising record levels of equity investment. However, challenges remain in scaling dual-use technologies, those with both civilian and military applications, due to valuation uncertainties and limited liquidity. The BVCA called for clearer procurement pathways and regulatory alignment to unlock further private capital in this space.
Market bifurcation: Winners and strugglers
A recurring theme was the bifurcation of the fundraising environment. General Partners (GPs) with strong track records and recent distributions are successfully raising new funds. In contrast, others are grappling with illiquid portfolios and prolonged fundraising cycles, reflecting broader macroeconomic headwinds.
Pension reform: Unlocking domestic capital
Pension reform was a focal point, with the BVCA and government aligned on the need to unlock the UK’s £6 trillion pension pool. The final report from the Pensions & Private Capital Expert Panel outlined key recommendations, including the creation of 'mega funds' through consolidation of local government schemes. Currently, UK defined contribution pensions allocate just 0.36% to private markets, far below the levels seen in the US and Canada – it is hoped that larger pension funds in the UK will drive up this allocation.
The Channel Islands – A strategic advantage
As the UK seeks to attract more capital and scale its innovation economy, the Channel Islands, Guernsey and Jersey, remain vital to the VC and PE ecosystem. Their stable political environments, robust regulatory frameworks and world-class governance standards continue to attract GPs seeking efficient fund domiciles.
Innovative structures such as the Guernsey Private Investment Fund and Jersey Private Fund regimes offer unmatched speed to market and cost efficiency, making them superior alternatives to other jurisdictions. As the industry evolves, the Channel Islands are well-positioned to remain at the forefront of global fund structuring and administration.
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