PE firm unveils how the pandemic has influenced investment in 2021

Business Insights

Luke Davis, CEO of IW Capital discusses the shift in sentiment and the sectors most attractive to investors this year

  • 45% of UK investors are looking to back green or sustainable companies 
  • 34% of UK investors are looking to invest in the Biotech, Medtech & Pharma industries 
  • 29% of UK investors are looking to back online retail businesses and technology 
  • 16% of UK investors are looking to back businesses in the hospitality sector

Following one of the most turbulent economic periods in history, a new page has now been turned. As we move away from Covid with the progress of the vaccines and with our departure from the EU successfully navigated, the UK is set to become one of the most attractive destinations for investment. But with today marking the start of the new tax year, where are the pounds heading in 2021? 

Throughout the year we have seen a shift in investment like no other, with the Covid pandemic creating prerequisites among the private sector that simply didn’t exist before. From Zoom shares going through the roof, the rebound of the stock market and investments into technology skyrocketing, there has clearly been a shift in sentiment among investors, and this has furthermore boosted our appetite to invest in different sectors.

The pandemic's impact on the wider economy have been indiscriminate, affecting all businesses across an array of different sectors. With many ravaged over the course of the year, there is now a clear indicator among investors to support future facing businesses and those who look to safeguard our future generations.

The overall effect of this period has led investors to reconsider what they are doing with their investable assets. To better understand this shift, IW Capital, a private equity firm who have invested in an array of companies throughout the pandemic, have commissioned a first of its kind investor index unveiling where investors are looking to put their money post-pandemic and post-Brexit. 

Key statistics: 

- Nearly half (45%) of UK investors will back green or sustainable companies in 2021

- 36% are backing stocks and shares an investment option

- 34% are investing in life sciences, including Biotech, Medtech & Pharma 

- 29% of UK investors will back online retail businesses and technology 

- Over a quarter (27%) of investors are investing in property 

- 26% will invest in Fintech 

- 18% of investors will back the creative industries 

- 16% are investing in the hospitality sector 

- With 800,00 newly formed businesses in 2021, 16% of UK investors are backing start-ups

With a 13% increase in new businesses starting up during 2020 compared to 2019, 2021 is set to create some exciting investment opportunities for investors throughout the country and some that are sure to boost the wider British economy.

Luke Davis, CEO of IW Capital:

“Investor sentiment has been transformed throughout the pandemic and we are now seeing just how much of an impact the pandemic has had on their appetite to invest and where we are putting our money.

“It is no surprise to see that green and sustainable companies are attractive to investors, with this sector sure to play a key role in the resurgence of our economy going forward. Technology is also proving to be an enticing investment option, after a year of digital transformation that has shaped the model of many businesses who have remained strong throughout this period of economic unrest. 

“We at IW have ourselves been investing heavily into the life sciences with GDPQ and Flarin, as well as into retail tech with Ubamarket. These are all companies that have diversified their model to be able to profit through the pandemic, and this now a prerequisite that investors are now looking for when thinking of investing.

“Investment sentiment towards hospitality is also on the rise now that the nation’s lockdown roadmap has been announced. The pent-up demand from this current lockdown is sure to act as a springboard to recovery for a lot of businesses here in the UK. People want to get out and spend, businesses want to grow and investors want to help them do that, it's a perfect storm for rapid growth. We are seeing this with Rockwater, a hospitality venue in Hove in which we have raised significant investment, with over £1 million of the funding coming from the local community.

"For those with investment power, there is now a more personal responsibility to back the future facing businesses that are sure to benefit both our society and our economy. Personal experience is now becoming a key factor in how we as investors are looking to spend our money and a major influence on our portfolios. 

“This index is a key reference that will be sure to inform our future investments and one that will provide a much-needed insight into where the sentiment lies among these sectors as the UK bounces back from Covid and Brexit.”