Private equity-backed mid-market businesses are increasingly looking beyond the UK for growth, even as geopolitical uncertainty continues to affect trading conditions, research suggests.

According to the latest Economic Engine survey by accountancy and business advisory firm BDO, 64 per cent of private equity-backed businesses see expansion into new international markets as their biggest growth opportunity for the next six months.

Nick Millward, partner at BDO in Yorkshire and the North East, said: “There’s no doubt that geopolitical uncertainty has made regional businesses take a step back and reassess where investment is being channelled over the coming months.

“However, what’s clear from our Economic Engine data is that the appeal of international markets remains strong, particularly amongst private equity-backed businesses.”

The survey, which includes responses from 500 mid-market businesses with revenues between £10 million and £500 million, indicates that international ambitions remain high despite the uncertain global environment.

International trade remains resilient, with latest figures from the Office for National Statistics (ONS) showing international trade increased by £2 billion in January — up by 6.7 per cent.

Exports from Yorkshire and the Humber totalled more than £39 billion, according to the ONS report titled ‘International trade in UK nations, regions and cities.’

While 59 per cent of PE-backed firms plan to increase UK investment, this is significantly lower than the 95 per cent of independently owned companies aiming to boost domestic investment across people, technology, acquisitions and capital expenditure.

Most mid-market firms still view the UK as a more attractive destination for investment, though this falls to 77 per cent of private equity-backed businesses.

Mr Millward said: “They’re intent on making the most of new growth opportunities, whether that’s by tapping into a larger customer base, unlocking new revenue streams, or by diversifying their market presence in overseas territories.

“While this approach doesn’t come without its challenges, especially in the current climate, PE-backed businesses are well-equipped with the strategic support and funding to explore and execute effective global expansion strategies, whether that’s through M&A, licencing and franchising, exporting, joint ventures, or by starting from scratch.

“Regardless of the route, it’s this level of ambition that will be vital in helping to fuel the regional economy in the coming months.”

Research also shows the strong economic impact of private equity in Yorkshire and the Humber.

Private equity-backed businesses in the region achieved average annual EBITDA growth of 47 per cent over the latest three-year period, according to the second Private Equity Value Report from Real Deals, developed in association with BDO.

The report identified 30 qualifying businesses in Yorkshire and the Humber among the top 245 private equity-backed businesses across the UK.

Accountancy and business advisory firm BDO commissioned the research to understand the impact that private equity investment is having on the growth of the UK economy.

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