The UK Private Debt Research Report 2020, published with support from the British Private Equity and Venture Capital Association (BVCA), is the first time primary data collection and analysis has been reported for the smaller and Lower Mid-Market segment of the UK private debt market. The report features data for 55 funds, managed by 37 UK fund managers, and 934 individual deals from 2018 and 2019. The report aims to shine a light into the characteristics and dynamics of this important and growing source of capital to UK businesses.
The report reveals that private debt has become a valuable source of finance for smaller businesses that are seeking to grow quickly:
- £18.4bn of private debt lending in 2018 and 2019, offering an increasingly important means of funding for UK businesses of all sizes
- 82% of private debt deals occurred outside London
- The report found 62% of deals (563) during the period were growth transactions, with an average deal size of £2.2m, meaning that over £1bn of growth finance was provided to UK firms seeking to scale up
- The use of growth deals at the smaller end of the market indicates demand for private debt is unlikely to decrease, and may prove to be a particularly suitable for companies coming out of the Covid-19 downturn with a growing need for investment.