Invest Europe reveals fundraising at highest level since 2008
Private equity trade association Invest Europe has published its 2016 European Private Equity Activity report revealing that fundraising for investment into companies across Europe hit its highest level since 2008 last year at EUR74.5 billion, a 37 per cent year-on-year increase.
The report reveals private equity investments totalled EUR53.7 billion last year, the second highest amount since 2008. Almost 6,000 companies across Europe benefited from investment, 83 per cent of which were small and medium-sized enterprises (SMEs). Exit activity remained robust at EUR38.9 billion, divested at cost.
“This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment,” says 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.”
In the last four years, European private equity funds have raised over EUR240 billion to invest into companies in Europe — more than twice the amount raised in the four years following the financial crisis, 2009 to 2012. Pension funds accounted for over a third of capital raised in 2016.
Consumer goods and services in Europe received the largest amount of private equity investment last year, at 28 per cent of the total — a 23 per cent year-on-year increase for the sector. The technology sector (communications, computing and electronics) received a fifth of the annual investment, as did business-to-business products and services.
France and Benelux-based companies received more than a third of private equity investments in 2016. Investments in Southern Europe were 19 per cent of the total, mainly driven by increased investments in Italy and Spain. UK & Ireland and DACH-based companies each had about 17 per cent share of the total investment, followed by the Nordics at 9 per cent and CEE at 3 per cent.
“Over 40 per cent 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,” says Collins. “Connecting global investors with local fund managers and working with policymakers to facilitate such cross-border flow of capital is an ongoing priority. This is an important source of funding for thousands of European companies.”