Andy Burnham has taken over as the UK’s prime minister with a promise to back British business, but he has inherited an economy that has become a hunting ground for foreign capital.
Burnham is politically to the left of his predecessor, Sir Keir Starmer, but has positioned himself as a “pro-business” leader. Among his promises, he has pledged to blend public and private capital to support regional development, and brand Britain as an “innovation nation.”
At the same time, he has inherited the leadership of a nation that struggles to attract domestic listings, where chronically undervalued companies have become a magnet for foreign funds, and where domestic capital from pension funds isn’t being deployed into UK businesses at anything like the rate seen elsewhere.
A recent PitchBook analyst note—Q2 2026 UK Exit Market: Dearth or Revival?—showed that UK take-privates hit £12.5 billion (about USD 16.8 billion) in the first four months of this year, after generating £18.1 billion across 24 deals in 2025 as American sponsors treat London-listed companies as underpriced relative to their US-based peers. Eight of the 10 largest UK take-privates since the start of 2025 were backed by foreign capital.
Just last month, EQT agreed to take UK product testing firm Intertek private for £10.9 billion. Trian Fund Management, General Catalyst and Qatar Investment Authority agreed to take London-based asset manager Janus Henderson private for £6.05 billion in December.
Downing Street, the official residence and office of the UK prime minister, was already treating this as urgent before Burnham took office. Over the past two months, Number 10 and the UK Treasury have called in some of the biggest names in private markets—including Hg Capital, Clayton Dubilier & Rice, General Atlantic, CVC Capital Partners, EQT and Elliott—to discuss how to encourage companies to publicly list their shares in London, according to the Financial Times.
UK Has No Home Bias in Pensions
New political leadership is unlikely to reverse the trend.
Patrick Sarch, head of UK public M&A at White & Case, says changes at the top are “unlikely to narrow the valuation gap.” If anything, he said, the added uncertainty around a new PM and British finance minister benefits foreign acquirers, who carry less UK and sterling financing risk than domestic buyers. He expects take-privates to keep accelerating in AI and digital transformation, financial services, defense and industrials.
Behind that gap sits a bigger one: little domestic institutional capital is mobilized locally. Speaking at the British Chambers of Commerce annual conference last month, the former Bank of England chief economist Andy Haldane—who is now understood to be advising Burnham—noted the UK has the only large mature pension system in the world without a home bias. This contrasts with places such as Canada, Australia and mainland Europe, where pension funds typically allocate more capital domestically. The solution, he said, is a “happy medium” between an unfettered free market and mandating pension fund allocation, using the existing pot of tax relief as leverage rather than force.
“We simply cannot afford to allow the continuation of overseas stripping of our greatest growth asset—innovative businesses—on this scale,” Haldane said. “Doing so is tantamount to willingly sacrificing the growth and jobs of tomorrow.” Left unaddressed, he warned, promising British businesses will keep being left to “perish on the vine” or be “plucked off by overseas foreign raiders.”
Investors Watch Nationalization Plans
Market participants are also paying close attention to Burnham’s stance on nationalization. Burnham has already said he wants all parts of the UK to take greater public control of the water and energy sectors, though he has been careful to note this doesn’t necessarily mean full nationalization. Beleaguered utilities giant Thames Water is an exception: Burnham told The Guardian that public ownership is “absolutely an option,” adding: “I would say for Thames Water, that is what should be done.”
Michael Moore, chief executive of industry body UK Private Capital, has highlighted a few sectors that could be affected: “There are separate noises from some in [the governing] Labour [Party] about who should be allowed to invest in the businesses that provide public services. Some of this is about infrastructure (such as water), but it is also relevant for areas like social care and education services where the private capital industry invests significantly.”
More clarity on Burnham’s policies is needed to gauge their likely impact on British businesses. Until then, it’s another layer of uncertainty for dealmakers to price in.
This article was originally published on PitchBook.com.
