UK business leaders show renewed appetite for risk as confidence returns
Nearly half of UK business owners and CEOs say they are more willing to take risk than a year ago, signalling a growing sense of optimism about future growth, according to new research commissioned by mid-market private equity firm ECI Partners.
The survey shows 47% of respondents now have a higher appetite for risk, compared with just 26% who say their appetite has fallen. A further 27% report no change.
Confidence increases with company size. More than half (57%) of businesses with over 500 employees say they are more open to risk than last year.
Risk appetite varies sharply by sector. Technology businesses are the most confident, with 58% reporting a higher appetite for risk, followed by HR companies (57%). In contrast, perhaps owing to the increased burden of NI and business rate changes, only 31% of retail sector companies said they have a higher appetite for risk.
Cost pressures remain the dominant challenge
Despite improving sentiment, rising costs are the single biggest concern for UK businesses, cited by one third of respondents. Other challenges include digital transformation (14%), the perceived threat from AI (13%) and regulation and compliance (11%).
Challenges also differ markedly by sector. Digital transformation is a significant issue for healthcare businesses (71%), but far less so for media and marketing companies (12%). Rising costs are a particular concern in education (71%), manufacturing (44%) and technology (44%), while talent shortages are most acute in healthcare (40%).
Good prospects for private equity investment
The findings point to a robust outlook for private equity, with 57% of businesses currently considering PE investment.
Interest is strongest among Architecture, Engineering, and Construction businesses, where 80% are considering or already using PE funding, followed by retail, hospitality and leisure (69%) and technology (67%).
International expansion firmly on the agenda
Confidence is also translating into ambition. More than 81% of businesses are considering international expansion as a growth driver in 2026, including 86% of large companies, 84% of medium-sized firms and 75% of smaller businesses.
Private equity – first choice for overseas expansion
Of those companies considering international expansion, private equity and venture capital are the most popular funding options, cited by 35% of respondents, ahead of government grants (26%) and bank finance (23%). Medium sized companies surveyed are most likely to be considering private equity for international expansion (40%) compared with a third of large companies and just under a third of small companies.
Across different industry sectors, companies in the Creative Industries are most likely to use private equity to expand overseas expansion (two thirds), followed by Travel related (50%), then Financial Services (47%).
Businesses value expertise as much as capital
When asked about the benefits of private equity, respondents highlighted sector expertise and networks (32%) above all else, followed by technology and AI expertise (28%), international reach (18%) and access to talent (10%).
Tom Wrenn, managing partner at ECI, commented: “This research is what we like to see as investors – positive sentiment from UK business leaders with a renewed appetite for risk, especially amongst tech CEOs. What is particularly striking is the number of management teams actively considering private equity as they look to expand internationally and navigate the shifting sands of GenAI. We see this from the founders and CEOs we speak with, who are looking for experience and expertise from their partner to navigate the growth opportunities ahead of them. Across five decades of investing we’ve refined a repeatable value creation model, which is one reason many CEOs look to partner with ECI. The findings reflect this, underlining that businesses increasingly see PE as a strategic partner, not just a provider of capital.”