Hello Rainmakers,
As far back as I can remember, the solution to the problems of a low growth, low produtivity regionally imbalanced economy have been the same - spinning out the brightest and best ideas from our universities into powerful businesses.
And so it has been trotted out again as the UK Private Capital roadshow rolls into Manchester today with a report launched in Manchester by UK Private Capital, in partnership with the insurance giant Gallagher.
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The facts that it lays out are that private capital backs 873 businesses across the North West — 393 by private equity and 480 by venture capital — supporting around 247,000 jobs.
Private capital-backed businesses generated £15.7bn in gross domestic product in 2025.
Investment in 2025 included £1.4bn in buyout investment into established and mature companies.
Venture capital accounted for £214m, reflecting early-stage funding for innovative businesses seeking to enter the market.
A further £166m went into growth capital, supporting early and mid-stage companies looking to scale their operations.
Michael Moore, chief executive of UK Private Capital, said: “Private capital already plays a substantial role in the North West economy, backing businesses across every sector and supporting a vibrant spinout ecosystem. Over the past five years, the region has attracted more than £8.5 billion of investment, supporting companies to innovate, scale and compete.”
You can sense a but coming a mile off, and there are some policy recommendations that can build on this evidence base.
Then comes the claims about how much the North West benefits from research strengths at institutions including the University of Manchester, the University of Liverpool and Lancaster University, alongside life sciences hubs in Liverpool, Daresbury and Alderley Park, and the report identifies 171 active university spinouts across the North West, including 70 in Manchester, 21 in Liverpool and 17 in Lancaster.
It goes on to say that the region has a strong base of ambitious businesses, research institutions and sector clusters, but a persistent North–South divide continues to limit investor engagement.
“Many fund managers remain reluctant to establish a physical presence outside London and the South East, reducing the depth of local networks and access to decision-makers. While Manchester and Liverpool both have distinct investment offers, Manchester increasingly serves as the region’s focal point for capital and attention.
“Commercialising the North West’s university research remains a critical but underdeveloped part of the ecosystem, with structural and cultural barriers still slowing the journey from discovery to investable business.
“These challenges are compounded by a persistent shortage of early-stage and follow-on private capital, reflecting the low density of locally based venture investors. Strengthening commercial pathways and expanding the regional funding base would help more promising companies start, scale and remain in the North West.”
The report calls for action to strengthen the North West’s investment ecosystem, including scaling programmes that help spinouts and innovation-led businesses commercialise and raise external funding.
It also recommends ensuring pension reforms and Local Government Pension Scheme pooling support regional growth and a diverse private capital ecosystem.
Other recommendations include improving awareness of private equity and venture capital among SMEs seeking growth capital, strengthening regional skills infrastructure and modernising high-skilled visa routes, and accelerating planning decisions and investment in transport, energy, digital infrastructure and strategic growth sites.
How can this be achieved? What will work that hasn’t been tried before?
According to analysis conducted by Henham Strategy for the report, North West companies that receive private capital backing are 20% more likely to deliver sustained annualised revenue growth above 10% per year than firms without private capital backing.
Venture-backed firms are 40% more likely to be internationalised than those not backed by venture capital, which could indicate earlier access to export markets and the investor networks that can help businesses expand overseas.
It also claims that North West venture-backed firms are 2.5 times more likely to file patents than businesses not backed by the industry.
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