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Gloucestershire Business News

South West equity finance markets grow at fastest rate in the UK

The British Business Bank's second annual Nations and Regions Tracker, published today (November 23), shows strong signs for growth of equity finance in the South West.

While every region and nation outside London, apart from the West Midlands, saw an increase in equity investment in 2021, the South West showed the greatest growth.

During the period, investment value in the region was up 357 per cent to £820m over 130 deals. This strength carried on into the first half of this year, with nearly £388m invested over 77 identified deals. However current economic conditions are likely to see equity markets slowing over the remainder of the year.

Four in 10 businesses (41 per cent) were using external finance in the South West in the four quarters to Q2 2022, down four percent from the previous quarter. Core debt products remain the most used and widely available across UK nations and regions.

Steve Conibear, UK network director, South and West of England at the British Business Bank, said: "Smaller businesses in the South West showed a positive appetite for equity finance during 2021, with the highest increase in value of equity investment in the UK. It is also encouraging to see evidence of a number of future net zero clusters emerging in the region, which is already known as a hotbed of innovation and technology.

"External finance can be an important tool for smaller businesses to promote growth and stability, as they navigate the current economic conditions. We will continue to support smaller businesses in the South West, through the launch of our new £200m South West Investment Fund next year."

The Nations and Regions Tracker found that equity investment in net zero sectors has grown at an even faster rate than overall UK equity markets. Since 2011, £6.9bn of equity investment has gone into net zero-aligned UK smaller businesses across 1,307 deals. The share of deals which are in net zero sectors has grown every year since 2018 rising from five per cent in 2018 to 12 per cent in the first half of 2022.

There were 20 net zero deals worth a total of £173m in Bristol since 2011, representing 22 per cent of net zero deals in the UK and 66 per cent of investment in the South West.

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