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Invest Europe reports increased activity in European private equity in 2015

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Invest Europe’s 2015 European Private Equity Activity report finds that private equity investment into European companies increased by 14 per cent to EUR47.4 billion in 2015, along with high fundraising and exit activity. 

The trade association’s report provides verified data gathered directly from more than 1,200 European private equity firms, covering 91 per cent of the EUR564 billion in capital under management in Europe.
 
Almost 5,000 companies across Europe benefited from private equity and venture capital investment last year. Of these, 86 per cent were small and medium-sized enterprises (SMEs) and nearly half of the total attracted private equity funding for the first time.
 
Venture capital investment increased by 5 per cent at EUR3.8 billion, while buyout investment grew 16 per cent to EUR36.3 billion. Growth investments reported an increase of 11 per cent to EUR6.5 billion, reaching their highest level since 2008.
 
“Despite volatile financial markets and macroeconomic challenges, private equity and venture capital continue to be a solid source of investment capital for growing European companies,” says Invest Europe’s Chief Executive Dörte Höppner.
 
Strong momentum in European private equity fundraising continued, reaching EUR47.6 billion last year – narrowly below 2014’s EUR48.0 billion raised. Venture capital fundraising increased by 8 per cent to EUR5.3 billion – the highest level since 2008. The EUR150 billion total raised by European private equity and venture capital in the last three years was 70 per cent higher than the period between 2010 and 2012.
 
“Last year’s robust fundraising builds on the EUR150 billion total raised since 2013, reflecting institutional investors’ confidence in the asset class and the European market,” said Höppner. “Over 40 per cent of funding came from investors outside Europe.”
 
2015 marked another healthy exit year for European private equity. Almost 2,500 European companies were exited, representing former equity investments of EUR40 billion, measured as divestment at cost. This amount matches 2014’s record breaking exit volume reported for European private equity.
 
As in 2014, 50 private equity-backed companies were exited by flotation on public markets in 2015. Exits from already listed companies, in the form of sale of quoted equity, increased by almost 80 per cent to EUR6.7 billion (amount at cost). The most prominent exit routes by amount were trade sale at 29 per cent, sale to another private equity firm (27 per cent) and sale of quoted equity or on flotation (IPO) at 17 per cent.
 
“Our 2015 European Private Equity Activity report is both rigorously compiled and non-commercial, meaning it’s a crucial annual gauge on the state of the industry,” said Höppner. “The data indicates another year of strong exits and return prospects for investors in private equity and venture capital, much of which will be reinvested into the asset class.”
 
Since the global financial crisis, European private equity and venture capital has invested almost EUR400 billion of capital in up to 28,000 European companies.

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