European private equity fundraising hits eight-year high

Private equity fundraising for investment into companies across Europe hit its highest level since 2008 last year at €74.5bn, a 37% year-on-year increase, according to new data from Invest Europe.

The association, previously known as the European Venture Capital Association, describes its 2016 European Private Equity Activity report as the industry’s most comprehensive and authoritative source of activity data.

SMEs benefit most

It shows that private equity investments totalled €53.7bn last year, the second-highest amount since 2008. Almost 6,000 companies across Europe benefited from investment, 83% of which were small and medium-sized enterprises. Exit activity remained robust at €38.9bn.

“This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment,” said Michael Collins, Invest Europe’s Chief Executive.

“All European economies are now growing and investors value the proven ability of European fund managers to find attractive investment opportunities across sectors and geographies.”

Pension funds do their bit

In the last four years, calculates Invest Europe, European private equity funds have raised over €240bn to invest into companies in Europe, more than twice that raised in 2009 to 2012. Pension funds accounted for over a third of capital raised in 2016.

Favourite sectors

• Consumer goods and services in Europe received the largest amount of private equity investment last year, at 28% of the total
• The technology sector (communications, computing and electronics) received a fifth of the annual investment
• Business-to-business products and services also attracted 20%

Distribution round Europe

France and Benelux-based companies received more than a third of private equity investments in 2016. Investments in Southern Europe were 19% of the total, mainly driven by increased investments in Italy and Spain.

UK & Ireland and DACH (German, Austria and Switzerland)-based companies each had about 17% share of the total investment, followed by the Nordics at 9% and Central and Eastern Europe at 3%.

“Over 40% of capital raised by European private equity last year came from investors outside of Europe, while a third of investments made into companies were cross-border,” said Collins.

“Connecting global investors with local fund managers and working with policymakers to facilitate suchcross-border flow of capital is an ongoing priority. This is an important source of funding for thousands of European companies.”

European Private Equity Report

Invest Europe says the  2016 European Private Equity Activity report is the most comprehensive database of European private equity statistics. It covers activity on over 1,200 firms, directly verified by the fund managers.

Invest Europe holds data

• from over 3,000 European private equity firms
• on 7,000 funds
• 60,000 portfolio companies
• 200,000 transactions since 2007

The full report is available to download from its website.