The face of wealth in the UK is no longer dominated by ‘old' money after an increase in the number of entrepreneurs selling their companies has led to a spike in significant wealth generation, according to a new study.
The Barclays and BGF Entrepreneurs Index, which tracks the UK’s entrepreneurial lifecycle, found the number of entrepreneurs who saw a return of £200,000 or more from the sale or partial sale of their companies increased 8.2% in the past year.
The overall number of companies sold increased from 1,396 to 1,510 between June 2013 and June 2014, resulting in a minimum of £302 million in newly aquired wealth.
The index’s findings tallies with an earlier study from London-based multi family office Oracle Capital that showed how entrepreneurs, not old money, were the new face of wealth.
The bulk of this wealth reportedly stems from the IT and medical sectors, which have seen a respective 84% and 76% increase in the number of entrepreneurs selling their firms.
“Many people have backed themselves, embraced entrepreneurship and started new businesses,” said Richard Phelps, managing director of Barclays Wealth and Investment Management.
“The findings show a conscious drive from government and the private sector to encourage small businesses that has truly embedded entrepreneurship into the UK business psyche,” he added.
Other results from the study suggest there has been a levelling off in the proportion of high-growth companies within revenue bands of £2.5 million to £100 million along with a 7.1% increase in the number of 18-64 year olds running new businesses.
Stephen Welton, chief executive of Business Growth Fund (BGF), who co-authored the report, said there has also been a 3.9% increase in the total number of companies in the year ending March 2014, taking this number up to three million.
“We have also seen a good proportion of old economy sectors, such as manufacturing, looking to capitalise on an improving economy and start investing in plant and machinery which wouldn’t have been the case three or so years ago.”
The Barclays and BGF Entrepreneurs Index is the fifth biannual study of the UK entrepreneurial life cycle in association with BFG and launches during Global Entrepreneurs Week.