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PE sets sights on circular economy as deals continue to rise

Up to £1.3 billion has been deployed into circular economy investments in a 12 month period, according to a new report from accountancy and business advisory firm BDO LLP, with disclosed capital deployed increasing by 10% from £788 million in 2021 to £879 million in 2022.

Up to £1.3 billion has been deployed into circular economy investments in a 12 month period, according to a new report from accountancy and business advisory firm BDO LLP, with disclosed capital deployed increasing by 10% from £788 million in 2021 to £879 million in 2022. 

The Investment into the UK Circular Economy report also reveals that growth capital investor BGF has been the most active UK circular economy investor over the past 12 months with nine investments completed in 2022.  

Venture capital investors accounted for 62% of 2022 UK circular economy deals with an average disclosed cheque size of £4.9 million. Mid-market private equity investors made up 17% of 2022 UK circular economy deal volumes, showing a growing interest from this part of the market.  

BDO’s research also found industrials and manufacturing to be the most prominent sector for circular economy investment for the second year in a row, accounting for 36% of deal volumes in 2022, followed by TMT at 25% and retail, consumer and leisure at 21%. 
 
In terms of themes, 26% of deals were businesses involved in circular inputs, 21% were circular design, and 16% were associated with material recovery.  
 

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