Private equity investment in Europe tops €71bn

Private equity investment in European companies hit a ten-year high in 2017 at €71.7 billion, a 29% year-on-year increase, according to a new report by Invest Europe.

Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors.

Almost 7,000 companies received investment in 2017, of which 87% were small and medium-sized enterprises (SMEs).

Invest Europe’s 2017 European Private Equity Activity report reveals that private equity fundraising reached €91.9 billion in 2017, surpassing the previous year by 12% for the highest amount since 2008.

European private equity managers put their investment capital to work at an increasing volume across all fund sizes, delivering decade high investment levels.

Divestments (measured at cost) increased by 7% to €42.7 billion.

This is the third highest level of the past decade — around 3,800 European companies were exited in 2017.

This 2017 European private equity report comes as the European Union enjoys its highest growth in a decade.

The EU economy grew 2.4% last year, according to figures from the European Commission.

Globally, demand for private equity has risen, as investors increasingly look to the asset class for returns during this extended period of low interest rates.

“European private equity saw highs in both fundraising and investments in 2017, demonstrating that private capital markets are deepening as European economies are growing,” said Michael Collins, Invest Europe’s CEO.

“This investment capital is supporting European companies of all sizes — helping start-ups to achieve scale, expanding SMEs and transforming large corporates.”

Companies focused on consumer goods and services in Europe increased their share of private equity investment last year at 24.4% of the total.

Business-to-business products and services accounted for 23.5% of the total.

The technology sector (ICT) reached a ten-year investment high, with 17% of the total, a year-on-year increase of 6%.

France and Benelux-based companies received 27% of private equity investments in 2017.

Close behind was the UK & Ireland with 26%, followed by DACH-based companies (20%), Southern Europe (13%), the Nordics (9%) and CEE (5%).

Pension funds provided 29% of all capital raised, followed by funds of funds (20%), family offices & private individuals (15%), sovereign wealth funds (9%) and insurance companies (8%).

 

The 2017 European Private Equity Activity report covers activity on over 1,250 firms, directly verified by the fund managers via the European Data Cooperative (EDC).

Working together with national private equity associations from across Europe to collate robust and comparable statistics, Invest Europe has developed the industry’s most comprehensive database.

The EDC holds data from over 3,000 European private equity firms on 8,000 funds, 64,000 portfolio companies and 250,000 transactions since 2007.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.