Private equity is well placed for rapid growth over the next decade with pension funds in the US and Europe likely to double their allocation to this asset class, according to a report by Apax Partners and the Economist Intelligence unit. But the report entitled The Double Helix: Entrepreneurship and Private Equity also reflects a decreasing level of investment in early stage.

The report reveals that while the US remains the world leader in private equity and entrepreneurship, north European countries will provide the most hospitable framework for entrepreneurs globally, with the Netherlands, Denmark and the UK filling the top three positions.

In the UK, the most developed market outside the US, some 87 per cent of managers backed by private equity firms say their companies would have grown more slowly or would not have existed at all without venture backing. The British Venture Capital Association (BVCA) calculates that private equity -backed companies account for 2.7 million jobs or 15 per cent of the UK workforce.