BGF, the UK’s most prolific private equity investor, has announced plans to invest £3 billion into British growth companies over the next five years, in a move designed to back the next generation of entrepreneurs and help stimulate regional economies.
The commitment marks a significant increase on the £2.3 billion deployed over the previous five years and includes a dedicated allocation of at least £300 million for businesses led by women. The announcement comes despite a difficult climate for equity investors, with higher interest rates and economic uncertainty continuing to cast a shadow over the wider venture capital and private equity sectors.
Founded in the wake of the 2008 financial crisis as part of the Project Merlin agreement between the UK government and the country’s biggest banks, BGF—formerly the Business Growth Fund—was established to support British businesses looking for equity investment without surrendering control. Unlike traditional private equity firms, BGF only takes minority stakes of up to 40 per cent and avoids using debt to drive returns.
Since its inception in 2011, BGF has backed 370 companies and invested a total of £4.5 billion, helping to create more than 27,000 jobs. Its shareholders include Barclays, Lloyds, HSBC and NatWest, who provided the capital for the fund as part of efforts to boost business investment after the global financial crisis.
Speaking about the new pledge, Andy Gregory, BGF’s Chief Executive, said the organisation remained confident in the resilience of British business, even in a subdued investment environment. He acknowledged that market conditions had made it harder to deploy capital and realise returns, but said that BGF’s unique model—based on partnership, not control—had enabled it to continue backing companies across the UK.
Gregory noted that many investment firms still had large reserves of capital but were hesitating due to a lower risk appetite and a slowdown in deal activity. Despite this, BGF invested around £500 million across 50 businesses last year, maintaining momentum while others held back.
The organisation has also opened discussions with pension funds as the government pushes ahead with the Mansion House reforms, which aim to channel more retirement savings into productive investment in UK companies. BGF’s experience and scale could position it as a key player in helping deploy some of this anticipated pension capital.
While London and the southeast continue to attract the lion’s share of investment, BGF remains one of the few major funds with a truly national footprint. Gregory said three-quarters of BGF’s investments are outside the southeast, with a particularly strong presence in Manchester, Newcastle and Northern Ireland—areas where access to capital has historically lagged behind.
The fund’s diverse portfolio includes well-known names like Gousto, Brompton Bicycles, Open Cosmos, Gymbox, and fashion brand Strathberry. BGF has also invested in more traditional sectors that often fall outside the scope of venture capital, such as recycling, childcare and healthcare. Last year, BGF scored a major return with the sale of Springfield Healthcare, in what it described as one of its most successful exits to date.
Investment Minister Baroness Gustafsson welcomed the announcement, calling it “a strong endorsement that Britain is a place to invest and do business in.” She said the pledge signalled confidence in UK entrepreneurs and the long-term economic prospects of the country.
Gregory said the organisation would continue to play a key role in supporting British businesses through all phases of the economic cycle, from early-stage growth to established expansion. “This is about backing ambition, talent and long-term value creation,” he said. “We’re here for the journey—not just the headline.”
