The best way to make money in the long term is to invest it and private equity is full of attractive opportunities to make a return. But which sectors should you choose in which to park your hard earned cash? Well luckily private equity experts, Maven, have come up with a handy guide to the industry sectors to watch.
Top of their list are AI, health tech, gaming and cybersecurity.
Cybersecurity
Cybersecurity is one of those things we all need and use in modern life so it comes as no surprise that the UK private equity market is forecast to increase by 6%, reaching about £3.4 billion in value.
As virtual threats become more frequent and sophisticated there’s a need for cybersecurity protect businesses.
Luke Matthews, partner at Maven, said: “From an investor’s point of view, the high demand for cybersecurity services worldwide means that there are a number of attractive investment opportunities in the field, building on the world leading expertise we have in this country.”
He added: “Capital from private equity investors can support the development of cutting-edge products and services to help keep businesses safe, while benefiting potentially from high returns. The cybersecurity sector is currently valued at around £139 billion and is projected to grow over £340 billion by 2030, so it is clear to see the value in this industry.”
ESG and energy transition
As interest in all things green and sustainable continues, ESG offers lots of attractive opportunities for private equity investments.
Energy transition technologies specifically are likely to need investments of roughly £105 trillion by 2050, and around 80% of this figure is expected to come from the private sector.
Health tech
Investors think of the healthcare sector as one of those old reliables that is always needed and is therefore pretty resistant to recession.
But if it’s excitement you want, healthcare’s younger sibling, health tech, which is forecast to reach over £530 billion in value by 2025, might be for you.
New technologies to enhance patient care, improve operational efficiency, and minimise costs overall are emerging.
These include AI-driven platforms to help with diagnostics, wearable devices to track patients’ health on the go, telemedicine, and even remote patient monitoring.
There are great opportunities for investors to capitalise on this growing sector. As well as potential investment returns, private equity investors can help bring to market the digital and tech solutions that are needed in the world of healthcare.
Gaming
Gaming boomed in the lockdown years when people were confined to their homes and there’s more growth potential around as virtual reality, mobile platforms and e-sports continue to advance.
It’s a sector that is impervious to borders as businesses can easily distribute their services and products to consumers all over the world.
In fact, they can generate revenue from several different sources, including game sales, in-app purchases, advertising, licensing, subscriptions, and even e-commerce.
Artificial Intelligence
Once a futurist’s pipedream, AI is now everywhere. Its applications are seemingly endless and it is being used for things such as predictive analytics, natural language processing, and recommendation systems, paving the way towards a broad market with almost infinite investment opportunities.
Currently, the artificial intelligence market size is valued at about £406 billion and is likely to soar to £1.6 trillion by 2030.
