Following one of the most turbulent economic periods in history, encompassing vaccine progress and Brexit, we enter unchartered territory. With the UK destined to be one of the most attractive locations for investors, where are the pounds heading in 2021?
The Legacy of 2020
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 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.
Trends for this Financial Year
Sustainability is going to be a top buzzword for 2021 with nearly half of UK backing green or sustainable companies in 2021. One of the most popular areas to invest in is life sciences, including Pharma, Biotech & Medtech with 34% of investors looking to focus their funds here. Other areas of interest are online retail business and technology, property and fintech – representing 29%, 27% and 26% respectively.
There also seems to be a small focus on recovery of struggling industries with 18% of investors backing creative industries and 16% 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.
“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.
“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.”