Financial Stability: Private Equity Firms

Lord Londesborough Excerpts

Wednesday 13th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, there are £250 billion of private equity assets under management in the UK, versus £10.3 trillion of total assets under management. It is a smaller part of the financial system. The noble Lord is not right to say that it is unregulated: UK private equity managers are regulated under the alternative investment fund managers regime. They must also comply with the senior managers and certification regime.

[Lord Londesborough (CB)]

My Lords, I declare my interests as set out in the register. It is hardly surprising that private equity is struggling to do deals and sell its portfolio companies in a climate of high interest rates and low growth. In fact, it is zero growth, as October’s dismal GDP figures show that we have seen no growth at all in the last quarter. In view of capital’s recent flight to quality, does the Minister agree that our lack of an economic growth strategy is the biggest drag on private equity in this country?

[Baroness Vere of Norbiton (Con)]

I do not agree with the noble Lord. As he will have seen in the Autumn Statement, the Chancellor set out significant tax cuts to encourage growth. That is where we are focusing our firepower at the moment.