Private investors are ready to drive business confidence

Business Insights

Financial services vow to increase spending as optimism rises

Small business investment specialist - IW Capital - discusses the rising investor confidence

New research conducted by the CBI and PwC shows that optimism within the UK's financial services sector - which accounts for 7% of the UK economy - has increased for the first time in three years. This follows a report from Deloitte showing that optimism jumped among Britain’s large companies after last month’s election, with many now increasing investment and preparing to hire more workers.

In response, IW Capital, a leading SME investment house based in Mayfair, has commissioned research across 2,000 investors to ascertain the optimism surrounding life post-Brexit and what opportunities will arise after 31st January.

How investors feel about Brexit:

  • 46% of Britons believe that if handled correctly, Brexit could be the best thing to have happened to the UK economy

  • 36% (10.5 million) believe that the UK will be a wealthier country, boosting their investment profile, post-Brexit

  • 30% (8.7 million) said that while Brexit in itself had not affected their investment decisions, the Government’s handling of the negotiations did negatively affect their investment decisions

The research suggests that investors are positive about the UK's prospects outside of the European Union and are keen to use their capital after certainty is restored.

Where do investors want to use their money?:

  • 41% of investors would prefer to use their own capital to help catalyse growth in the UK economy and job market

  • 34% of investors would like to invest in small businesses with growth potential in the next two years

  • 19% of Britons will look to make significant investments in the next year, despite political uncertainty

  • 27% of Britons will look to invest into businesses within the UK when Brexit is finalised

Small and Medium-sized Enterprises (SMEs) make up over 98% of all private sector firms across the UK. They also account for 16 million jobs in the UK, while adding £1.9 trillion to the British economy.

Luke Davis – CEO of private equity house IW Capital – comments on the research:

“This research is very much in line with what we have seen from our investor base and from the entrepreneurs we work with. Both sides want to push on to make the most of opportunities that will present themselves when we do eventually leave the EU. If we can foster an environment of optimism in this sector growth will surely follow.

“We have seen more demand than ever before to invest in growing SMEs, as well as more entrepreneurs looking for investment. Supporting and allowing this sector to grow at the pace at which it could will undoubtedly have a marked effect on the economy as a whole, creating jobs and facilitating growth at a scale that is almost unheard of in large businesses unsuitable to rapid change and adaptation to new conditions.”