Since 2011, Scotland’s 9% share of UK equity deals has outperformed its 6% proportion of the SME population, according to the British Business Bank’s Regions and Nations Tracker
Scotland has the biggest self-contained investor base outside of London and one of the UK’s most vibrant financial ecosystems, according to the British Business Bank.
Its first annual Regions and Nations Tracker revealed that since 2011, Scotland’s 9% share of UK equity deals has outperformed its 6% proportion of the small to medium-sized enterprise (SME) population, while its value of private debt investment was just 2%.
The report found that the imbalance reflected the regional disparities in access to equity finance and private debt across the UK.
Around 80% of equity investment stakes in Scottish companies involved an investor within the country, behind only London’s 90% on the same measure and ahead of North East England with 66%.
Meanwhile, 12% of equity investors in Scottish companies were based in London, while 7% were based in other parts of the UK.
Companies in Edinburgh are the focal point of the Scottish equity market, with nearly half (47%) of pairings between businesses and investors based in Edinburgh.
Glasgow is the second highest, with 16% of pairings, followed by North Lanarkshire and Aberdeen on 9% and 5% respectively.
The British Business Bank found that investors are more likely to invest in businesses close to their office, with 82% of equity investment stakes within two hours of each other and 61% are within one hour of each other.
The report found 38% of rural construction business owners used personal funds, compared to 27% of their urban counterparts. Almost a quarter (23%) of all businesses in Scotland are registered in rural locations.
Mark Sterritt, UK network director for Scotland at the British Business Bank, said: The number of equity deals has outperformed Scotland’s share of the UK’s SME population, the level of private debt investment is significantly lower.
He said: This highlights the fact that regional imbalances in access to finance still exist and need to be addressed – which is a key part of our role.