A Guardian investigation has revealed that as many as one in eight workers in Britain are employed by companies ultimately controlled by private equity firms, highlighting just how deeply embedded they have become in everyday life.
Private equity firms are investment companies that raise money from investors and banks to acquire and manage other companies, in order to eventually resell them for a profit. Politicians and economists have raised concerns about the “exponential” growth of private equity in the UK over the last two decades.
The industry and its advocates argue the model can provide an engine for growing the British economy, boosting innovation and efficiency, but others have described its rise as a “financial pandemic” that is driving down the quality of services.
After a post-Covid boom that left private equity with a substantial foothold in many everyday services people rely on, private equity-style deals have levelled off in recent years, according to figures from private market data platform PitchBook.
Key Sectors with High Private Equity Presence
A Guardian analysis of company filings, market data from PitchBook and ONS figures shows that private equity has a significant stake in many day-to-day services, including essential ones such as elderly care, childcare and funerals.
The senior British economist, Sir John Kay, said private equity-backed businesses can be “very good or very bad”. “The very good story is investors who are willing to provide capital on a long-term basis either for infrastructure, or to new growth businesses,” he said. “But what has become much more extensive is private equity buying into firms, with the idea that you resell them in three to five years having extracted quite large amounts of money in the meantime.”
Ludovic Phalippou, a professor of financial economics at the University of Oxford’s Saïd Business School, said that while private equity fund managers are regulated as financial firms, they are not regulated as operating companies delivering essential services, which creates risk. “The question is less ‘should private equity be regulated?’ and more ‘should providers of essential services face additional safeguards?’. If society would not tolerate a hospital, care provider or children’s services operator suddenly failing, then we may want stricter rules around debt levels, ownership structures and contingency plans for financial distress.”
UK Private Capital, the industry body for private equity firms, argued that they play an important role in the British economy, attracting investment, boosting productivity and driving innovation. Private capital firms, they said, have invested nearly £150bn in the UK in five years, with more than half of the backed companies outside the capital. They also said that the UK has “the largest concentration of private capital investment’s expertise anywhere in the world outside North America”.
Nurseries
More than a third of employees in the nursery sector work for a private equity-controlled company. The largest chain – Busy Bees – is backed by the private equity arm of Ontario Teachers’ Pension Plan, while Kids Planet is backed by Fremman Capital. The education secretary, Bridget Phillipson, has recently asked the Competition and Markets Authority (CMA) to look at the role private equity is playing in childcare, “including whether these investors are driving up costs or creating instability for families who rely on local nurseries”. Previous Guardian analysis found that investment funds, including private equity firms, doubled their investment in the sector between 2018 and 2022, prompting warnings that the growing role of private equity may increase the risk of providers shutting down.
Vets and Pets
Just six large groups own 60% of vets in the UK – and three of them are private equity-owned businesses. In total, an estimated 35% of veterinary employees worked for a private equity firm in 2024. A CMA investigation into vets found that weak competition and a lack of transparency has led to high prices and over £1bn in consumer detriment. Prof John Kay has cited the veterinary industry as being dominated by private equity-backed companies driven by short-term financial gain, rather than a desire to provide the best service. “I would like a vet who was motivated by concern for animals rather than concerned to see how many treatments were necessary to ensure that he could be paid his bonus for the month,” he said.
Retail and High Streets
Supermarket giants Morrisons and Asda are both owned by private equity firms. A number of collapsed high street businesses were also owned by private equity before their demise, including Toys R Us, Claire’s and The Original Factory Shop. Debenhams, which is now an online brand after its physical department stores were closed, was saddled with more than £1bn in debt after being bought by a private equity consortium. Bookshops – a slice of retail that has recently boomed on the high street – also has a high concentration of private equity ownership. Leading bookshop chain Waterstones (which owns Foyles, Blackwells and Hatchards) is ultimately controlled by the private equity branch of Elliott Investment Management. In total, private equity employs about a third of British booksellers. Other examples include Nails Inc., Boots, and WH Smith (rebranded to TG Jones by Modella Capital). Many British restaurant chains are also private equity-controlled, employing about 5% of restaurant employees, including Pizza Express, Gails, Wingstop, Chiquito, Pho, Rosa’s, Chopstix, and Coco di Mama.
Following the purchase of Asda in 2021, the then chair of the UK Business, Energy and Industrial Strategy Committee, Darren Jones, wrote to the CMA asking whether it had sufficient powers to tackle issues brought by private equity buyouts. He said: “Given previous highly leveraged purchases of high street brands, which have ultimately resulted in administration, job losses and pension fund shortfalls, there is concern that regulatory bodies have insufficient oversight or powers to intervene when new owners act irresponsibly.”
Arts and Culture
More than a quarter of employees who operate arts facilities worked for a private equity-controlled company – the largest player being the theatre giant ATG, owned by US firm Providence Equity Partners. Private equity’s presence in the theatre world has had its critics – most notably Andrew Lloyd Webber, who in 2021 hit out at “people who are purely interested in taking a business, milking it and then flipping it for a big amount of money”. He accused private equity investors of not investing as much in their buildings as private owners. The digital ticketing platform TodayTix has recently been bought by Mari, backed by Apollo Global Management. About a third of people employed in film and television post-production in Britain worked for a company ultimately controlled by private equity in 2024.
Social Care
Private equity’s foray into the care sector is well documented, with a large presence in adult and children’s social care. The new figures show private equity-controlled firms employ just under 7% of residential care home employees, 11% of residential nursing care employees, and 12% of employees providing residential care for learning disabilities, mental health or substance abuse. The potential risk and instability of this model was well documented with the collapse of Four Seasons Health Care, which at its peak was the UK’s second-largest residential care provider, operating over 450 homes and looking after more than 20,000 elderly residents. It was passed through a string of private equity owners and eventually buckled under £1.5bn in debt and collapsed into administration in 2019, with many vulnerable people having to be moved at short notice.
Petrol Stations
An estimated 27% of petrol stations are backed by private equity firms. Motor Fuel Group (MFG), the largest independent forecourt owner, operates 1,546 forecourts – about 21% of the total petrol stations listed in the government’s fuel finder data. MFG is backed by American firm Clayton, Dubilier & Rice (CD&R). Asda also operates 404 petrol stations, about 6% of forecourts, after buying stations from the EG Group. The CMA has closely monitored the petrol sector after mergers and acquisitions to prevent monopolies and price increases. The regulatory body’s investigations into Asda and CD&R’s acquisitions of forecourts led to both companies selling some petrol stations to prevent less competition.
Waste and Facilities Support Services
Estimates show that just under a quarter of support services employees work for a private equity-owned company. Your office, hospital or school may outsource its cleaning to a private equity-owned contractor such as OCS – owned by Clayton, Dubilier & Rice. One in five employees in the waste management sector work for a PE-backed company. The largest player is Biffa, controlled by US-based Energy Capital Partners. Proponents say this has provided the cash injection needed for waste services to keep up with stricter environmental policies, and made some services more efficient and modern. But the downsides have also been starkly apparent. In 2012, Biffa collapsed into financial restructuring after being loaded with £1.1bn in debt – the GMB union claimed it was a “fundamentally sound business crippled by the greed of private equity owners”. In recent years, PE-backed waste management companies have faced repeated, prolonged strikes by workers fighting wage cuts and deteriorating workplace safety conditions. In Manchester in 2022, Biffa-employed bin workers went on strike over a 1.75% pay increase, a year after the company logged pre-tax profits of £26m.
