More than half of the UK's business angel investors are based in London and the South East, according to new research.
A report from the British Business Bank has highlighted the regional imbalance in the location of UK business angels, with 35% in London and 22% in the South East. Almost half of all UK business angel investments are made in London (31%) and the South East (12%).
In England, the South West has the largest number of business angels outside of London and the South East (6%), followed by the North West (5%) and the East of England (5%). In the devolved regions, 8% of UK Business Angels are based in Scotland, 4% in Wales and just 1% in Northern Ireland.
The British Business Bank has announced that it is establishing a new programme to support developing clusters of business angels outside London. The bank will work with regional angel groups to set up a network of regional relationship managers.
The British Business Bank report shows that the business angel market is maturing - 56% of those polled have more than five years' experience as an angel investor; 40% hold their investments for more than six years; and the majority have a portfolio of more than five companies. There is a significant cohort of older investors, with 75% aged over 45 and 21% aged over 65.
The median initial investment by a business angel is £25,000; and 79% of business angel investments are made as part of a syndicate. The four sectors most favoured by business angels are: healthcare (27%); life sciences (26%); fintech (25%); and software as a service (24%).
"Angel investors play a vital role in the economy, bringing patient capital, business experience and skills to support the growth of smaller businesses," said Keith Morgan, British Business Bank ceo. "Their funding and expertise can be the key to unlocking rapid growth for companies wanting to expand, diversify or enter new markets."
Jenny Tooth, chief executive of the UK Business Angels Association (UKBAA) said: "The findings of this report show extremely positive signs of continuing growth in the angel market, but many regions continue to show an underserved level of angel investment. We therefore welcome the British Business Bank's implementation of this major new commercial investment programme to stimulate new regional business angel clusters."
UKBAA is also creating new regional Angel Hubs and a national e-learning programme on angel investing.