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• €138 billion of equity invested in almost 9,000 European companies, up 51% on 2020
• €118 billion new capital raised, the highest level seen to date

Brussels, Belgium – While the effects of the COVID pandemic continued to be felt across Europe in 2021, with renewed lockdowns and restrictions, private equity and venture capital firms engaged in record-breaking investments and fundraising – guiding entrepreneurs, backing companies and supporting Europeans across the continent.

European private equity firms invested €138 billion in Europe in 2021, registering an astounding 51% increase over 2020 and setting an all-time record in the process, according to today’s newly published report – ‘Investing in Europe: Private Equity Activity 2021’ – by Invest Europe, the voice of Europe’s private equity, venture capital and infrastructure sectors, as well as their investors.

The report – which is the most comprehensive source of fundraising and investment data, covering over 1,800 firms – shows strong recovery in activity following the impact of COVID-19, with new investment records for buyouts, growth investments and venture capital, as funds backed more European companies than ever. A total of 8,895 companies received investment, 13% above the average of the past five years, underscoring the industry’s pivotal role in providing support for companies to weather tough conditions.

All private equity segments witnessed strong investment growth and new records in 2021. Investment in buyouts increased by 28% to €79 billion, growth investment soared 124% to €35 billion, while venture capital investment rose sharply by 70% to €20 billion. Information Communications Technology, Consumer Goods and Services, and Biotech and Healthcare ranked as the leading sectors, accounting for two-thirds of investment, as capital flowed into companies that are driving innovation and seeking solutions for a healthier future.

Eric de Montgolfier, CEO of Invest Europe, commented:

• “Private equity is there to help businesses succeed, whatever the conditions. This is an industry whose managers have a broad understanding of markets and deep experience in sectors that are driving European growth and competitiveness, operating on an altogether larger scale than before.
• “Private equity is more than an asset class, it is a complete ecosystem.
• “Private equity represents a continuous spectrum of backing for businesses, from the earliest stages of seed funding to the latest stage of buyouts.”

Underlining the increasing scale of the European private equity industry, new funds raised reached €118 billion in 2021, the highest level seen to date. Over the past five years, fund managers have raised over €542 billion for investment in start-ups, SMEs, mid-market and large companies across the continent.

Growth funds raised a record €20 billion in 2021, four times the total raised just five years ago. Venture capital achieved its twelfth successive year of fundraising growth with a record €18 billion raised. The records illustrate Europe’s success in creating new tech and biotech champions, as well as investor appreciation of the strong returns available from early-stage and growth investments.

Fund of funds were the largest providers of capital in 2021, accounting for 23% of all funds raised. Pension funds committed 20% of funds raised, followed by family offices and private individuals on 15%.

It was a strong year for exits in 2021, reflecting returning market confidence among buyers and their belief in the businesses built by private equity. Exits at cost (the original equity amount invested) rose by 60% to €41 billion, as firms exited over 3,700 companies, an increase of 13% on 2020 levels. Divestments by growth firms and venture capital both recorded their second highest totals in the 2007-2021 period at €8 billion and €3 billion respectively.

This data, coupled with Invest Europe’s “Private Equity at Work” report, demonstrate European private equity’s growing contribution to the European economy – in terms of investment, financial performance, resilience and job creation.

Download the full report here.

• Private equity and venture capital-backed companies add over 103,000 jobs in 2020
• Businesses with PE/VC investment employ 9.9 million people across Europe, 4.3% of workforce

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its ‘Private Equity at Work’ report. The research illustrates how private equity helped European companies overcome the effects of COVID-19 to add 2% more jobs in 2020, a year when the overall European workforce contracted by 1.6%.

• Private equity and venture capital-backed businesses created over 103,000 jobs in 2020, supporting SMEs that are the backbone of the economy and giving a boost to innovative and entrepreneurial companies operating in technology, fintech and finance, and biotech and healthcare.
• The industry demonstrated that it continues to be a cornerstone of European society, securing jobs for almost 10 million workers at 24,663 companies across the continent during an intensely challenging period for business and society alike.

Now in its third year, Invest Europe’s Private Equity at Work tracks the progress in employment and job growth at companies that were backed by private equity and venture capital between 2017 and 2020, providing a cumulative picture of the industry’s contribution to the workplace. Venture capital-backed companies created 50% net new jobs for 86,258 workers over the period, while companies benefitting from buyout investment hired 221,694 more people – an increase of 11%. Generalist private equity firms that invest in businesses across all stages of development added 15% more jobs, or 205,726 additional people.
Eric de Montgolfier, CEO of Invest Europe, commented:

• “Private equity and venture capital-backed companies throughout Europe employ more people than the entire population of Hungary, and created new jobs in 2020 equalling the entire population of Nancy, France, or Bedford, U.K.”
• “The pandemic did impact European employment and private equity and venture capital-backed businesses could not entirely escape the effects. However, there can be no doubt that the industry’s long-term investment and hands-on operational approach builds better businesses and creates jobs year in, year out.”

Over 80% of companies in Invest Europe’s research were SMEs employing fewer than 250 staff. This critical segment at the heart of national economies and local communities witnessed job growth of 5.3% and supported 854,459 workers in 2020.
Private Equity at Work highlights private equity’s contribution to sectors that are driving innovation and working for a better future for Europe’s citizens. For example, 7.4% more jobs were created in Biotech & Healthcare, underlining Europe’s leading role in drugs to combat COVID and other life-threatening conditions. Meanwhile, Finance & Insurance – at the centre of the fintech revolution – and Information Communications Technology added 7.7% and 4.9% more jobs respectively.
Private Equity at Work is Invest Europe’s exhaustive study of private equity’s role in employment in Europe. It aims to develop a comprehensive picture of the industry’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

European Mid-Market Private Equity supports SMEs and investors with growth and returns outperformance.

• European mid-market private equity delivers 17% annualised net return to end-2020
• €34bn invested into 841 companies in 2020, supporting companies through the pandemic
• €137bn raised by the mid-market from 2016-2020, up 65% on previous five-year period

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has today published a new report entitled ‘Europe’s Engine for Growth’, highlighting mid-market private equity’s contribution to mid-sized firms that are the backbone of the European economy, as well as its strong returns for pension funds and long-term investors that support pensions and savings.
The research digs deep into the performance and investment profiles of the European mid-market to give new insights into this critical segment of the private equity industry. It shows that mid-market funds delivered a net IRR of 17% since inception to the end of 2020.
Europe’s Engine for Growth shows the mid-market’s financial commitment to the economy with €34 billion invested across 841 companies in 2020, the seventh consecutive year of investment value growth, as firms continued their strong support of businesses throughout the pandemic. Over the five years from 2016-2020, mid-market private equity raised a total of €137 billion to invest in mid-sized companies, up from €83 billion over the period from 2011-2015, providing significant capital to further aid Europe’s recovery.
Europe’s mid-market plays an essential role in European society through employment across the continent. In 2020, companies backed by mid-market firms employed some 3 million workers – more than the entire population of Lithuania – and created jobs at a rate of 6.4%, outperforming the 0.9% seen in Europe as a whole.
Eric de Montgolfier, CEO of Invest Europe, said:

• “The European mid-market is where the rubber meets the road in European private equity’s value creation chain: funds take entrepreneurial companies and set them on the path to being European and global success stories.
• “Across Europe, mid-market private equity funds are creating jobs, driving innovation, and championing sustainability.
• “Mid-market funds are delivering superior returns that support European pensioners and savers.”

The report draws on real-life case studies to showcase how private equity improves business performance and applies higher ESG standards to deliver social and environmental benefits.
The segment is also an important supporter of innovation and digitalisation trends – creating a more competitive Europe. For instance, investment in ICT (information and communications technology) rose from 18% of all mid-market capital invested in 2016 to 37% in 2020.

The European Commission published today a series of proposals designed to implement the Capital Markets Union (CMU) Action Plan. Among these are the fund management reviews of the Alternative Investment Fund Managers Directive (AIFMD) and the European Long-Term Investment Fund (ELTIF) Regulation, as well as of the European Single Access Point (ESAP) Omnibus.

Today’s CMU proposals demonstrate the crucial role asset managers, such as private equity and venture capital managers, play in the financing of the European economy, by acting as bridge between investors and businesses. While investors committed more than €100 billion of capital in private equity in 2020, private equity backed companies represent more than €10 million employees.

Invest Europe, the association representing the European private equity industry, welcomes the targeted nature of the AIFMD review, which only focuses on areas related to delegation, loan-origination, and some reporting aspects of the Directive.

Martin Bresson, Director of Public Affairs at Invest Europe, commented: “The limited scope of the review is a clear confirmation that the current regulatory structure, which has withstood many crises since its inception, is to a very large extent appropriate. On this backdrop, we appreciate that the European Commission has taken the “if not broken – don’t mend” approach. That being said, there are a few blemishes that we will aim to assist the co-legislators in addressing as negotiations on the file will move forward”.

Next to the AIFMD, the revision of the ELTIF framework has the potential to drive new managers’ interest into this EU voluntary label which allows long-term AIF managers to market to retail clients. Amendments introduced to the proposal will make it easier for managers to set up ELTIF fund-of-funds and to market ELTIFs in a broader range of jurisdictions. Changes to the conflict of interest and diversification rules are also likely to increase the attractiveness of the regime.

“This CMU package of initiatives is by and large a step in the right direction,” says Martin Bresson. “Even on more controversial amendments, the private equity industry’s concerns and specificities have so far been taken into consideration. We can definitely see this as a recognition of the role our industry can – and will – play in the twin transitions Europe needs”.

Launching on 25^th November, ‘A Different Angle’ is an online branded film series exploring the role of private equity and venture capital in European society. This series, presented by Invest Europe, the world’s largest association of private capital providers, and produced by BBC StoryWorks Commercial Productions, brings to screen the human stories at the heart of the businesses that are driving change and fuelling growth through private capital.

Most people come into contact with a product or service from a company backed by private equity or venture capital every single day. Many of the brands we love, services we rely upon, and companies we work for benefit from private equity expertise and capital to enable them to flourish and meet our needs. Yet the industry’s contribution to jobs, innovation, funding better retirements, and driving positive societal change can be often overlooked or misunderstood.

A Different Angle aims to improve the understanding of private equity and venture capital, demystifying the virtuous circle of investing that supports our pensions and savings while exploring the true nature of innovation in Europe. It will also raise awareness about the expertise injected into businesses alongside capital, and how profit and purpose, such as high social and environmental goals, can work in harmony to produce better returns for investors and society.

Through powerful human stories, rather than a focus on mere data and figures, A Different Angle shines a light on the private equity industry and the businesses that are making a difference. The films within the series will explore the topics of pensions and savings, Environmental, Social, and Governance (ESG) criteria, employment and job creation, and Europe’s next unicorns. Crossing the continent, the films showcase a range of inspiring stories, from solutions for beekeepers to non-invasive healthcare headsets to combat a range of health issues.

Within the series, leaders like Coller Capital, Cinven, EQT, European Investment Fund, IQ Capital, and Mid-Europa Partners have contributed with their commitment and expertise to show how the companies they support innovate, create jobs, and improve our lives.

Simon Shelley, vice president of BBC StoryWorks Programme Partnerships, said: “Private equity and venture capital are ubiquitous but not often understood. This series seeks to demystify private equity and how it can generate positive returns not just for shareholders but for society as a whole. We’re thrilled to be working with Invest Europe to tell important stories from a variety of settings across Europe about job creation, responsible investing, and innovation.

Eric de Montgolfier, CEO of Invest Europe, commented: “Private equity and venture capital are deeply ingrained into the fabric of Europe. Across the continent, this industry is building better businesses that are helping support security in retirement for millions of pensioners, while fuelling innovation, creating jobs, and driving advances in sustainability. We are delighted BBC StoryWorks is producing these films for Invest Europe and bringing these stories to life.

You can explore the full series at www.bbc.com/storyworks/a-different-angle/home and https://www.investeurope.eu/about-private-equity/a-different-angle/ (U.K. viewers can only access the latter) and join the conversation online with #ADifferentAngle.

Last week the European Commission published its draft General Block Exemption Regulation and opened a consultation calling for stakeholders to comment on its proposal.

The Commission Regulation is an important component of the EU State Aid Framework as it defines the conditions under which Member States are authorised to grant public support without infringing EU competition law. It is especially relevant from a private equity perspective as it specifies when risk finance aid can be granted to national venture and growth funds or the companies they support.

Overall, Invest Europe broadly supported the proposed new Regulation as it will continue to foster the development of a venture capital ecosystem across the continent. Martin Bresson, Director of Public Affairs, said of the draft text: “We are pleased that the European Commission has taken into consideration our concerns regarding the maximum age a company can reach to remain eligible under the framework. The now double threshold – 7 years from first commercial sale or 10 years from registration – will introduce additional flexibility for scale-ups and companies active in tech-intensive sectors”.

Invest Europe however remains concerned that no changes have been made to the definition of undertakings in difficulty, which has shown during the Covid pandemic to be too narrow to take into consideration the specificities of long-term commitments made by buyout funds.

As it did for the recent review of the Risk Finance Guidelines, Invest Europe will mobilise its State Aid Task Force and will put at the disposal of the European Commission the expertise of its members on the changes made to the existing framework.

Want to join the Invest Europe State Aid Task Force ? Contact us here.

• VC investment volumes in 3.5 months after outbreak remained in line with prior years
• Investment into healthcare start-ups increased by 77% during COVID disruption

Invest Europe, in partnership with the European Investment Fund (EIF), today published ‘The VC Factor – Pandemic Edition’, a new report illustrating European venture capital’s continued strong support for innovative and fast-growing start-ups in the immediate aftermath of the COVID-19 pandemic in 2020.

The study is the second edition of the ground-breaking collaboration between Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, and the EIF – Europe’s largest investor in venture capital funds. It draws on data from 2,611 firms investing into VC and 32,114 start-ups between 2007 and 2020. The findings show that the volume of VC investment during the three and a half months following the onset of the pandemic in March 2020 was in line with the two prior years, despite lockdowns and travel restrictions that meant fewer investments and reduced deal flow for VCs.

The report shows that the number of investments by VCs reduced by 13.6% between March 11, 2020 – the date on which the World Health Organization declared the COVID-19 outbreak a pandemic – and the end of the second quarter. The decline was offset by a 19.3% increase in the average amounts invested into companies, as VC firms continued to back the start-ups driving European innovation and laying the foundation for a better tomorrow.

The European healthcare sector stood out during the period with a 77% increase in investment volumes, reflecting VCs enhanced focus on biotech companies developing potential vaccines and treatments for COVID-19, as well as start-ups committed to improving healthcare for European citizens more widely.

The findings of the VC Factor echo Invest Europe’s flagship report ‘Investing in Europe: Private Equity activity 2020’, which showed that venture capital investment in Europe grew for the eighth consecutive year to €12 billion in 2020, underlining the industry’s resilience despite physical restrictions on people and businesses, as well as intense economic turbulence.

Alain Godard, chief executive of the EIF, said: “Total VC investment volumes did not decrease immediately after the outbreak of the pandemic, despite reduced deal activity exacerbated by lockdowns. Indeed, healthcare investment saw a 77% increase as VCs targeted companies making a difference in this critical sector. The research shows that European VCs were able to adapt quickly to the situation and finish the year strongly, channeling investment into start-ups working at the cutting edge of health and technology.”

Eric de Montgolfier, CEO of Invest Europe, commented: “European venture capital did not escape the effects of COVID-19 but responded with characteristic strength. Across the continent, VCs continued to invest in disruptive technologies as well as life-changing biotech and healthcare innovations. Europe is packed with entrepreneurial talent and venture capital is crucial to a strong recovery from the effects of COVID-19, as well as essential to a brighter long-term future for all Europe’s citizens.”

The latest VC Factor report also shines a new light on where Europe’s venture capital managers are based and where they invest, illustrating that VC firms tend to cluster together much more than their investee companies. The top 12 hubs in Europe represent 61% of the investment capital deployed but only 40% of investment received.

London, Europe’s largest venture hub, accounts for 23% of money invested and 12% of capital received. It is followed by Paris, which is the source of 15% of capital invested while receiving 7% of venture capital deployed. As a proportion of GDP, however, Berlin is the largest VC hub in Europe, followed by East Anglia in the UK where investment is focused on innovation emerging from leading university Cambridge.

To read the VC Factor in full, please click here.

Watch the video

The European Commission published today its proposal to revise the Solvency Directive, which sets common rules for the risk management and supervision of insurance companies in the European Union. This revision paves the way towards reducing undue costs and barriers that still apply to insurers seeking to invest equity directly or indirectly into long-term projects.

Over the past 5 years, insurance undertakings invested €45 billion into private equity, making up around 9% of the overall capital raised by these funds. Insurers, which are long-term investors by nature, supported thousands of businesses across the continent by committing capital into private equity funds. Yet, insurers’ investment in equities remains extremely low – with an asset allocation in equity funds of only 3,3% (0,6% in private equity) according to the most recent EIOPA statistics.

Changes to the criteria defining the long-term equities category, which will be part of the announced review of the Delegated Regulation, offer a perfect opportunity to better acknowledge the way insurers hold long-term assets and to incentivise them to set up long-term portfolios. Seizing the high potential for improvement could ultimately drive the insurers’ ability to support businesses by investing into venture and private equity funds.

As the representative of the European private equity community, including both fund managers and investors into these funds, Invest Europe is looking forward to working with the co-legislators to ensure insurance undertakings are in a position to commit some of their capital to long-term equity funds while maintaining the high prudential standards of the framework.

For more details on Invest Europe’s position on the review, please look at our position paper here.

• The European Union Intellectual Property Office (EUIPO) and Invest Europe, the world’s largest association of private capital providers, have signed a collaboration agreement to promote and encourage activities and services that support small and medium-sized enterprises (SMEs).

As part of the EUIPO’s plan to create a network under the ‘Ideas Powered for business’ brand and to develop synergies among organisations in close contact with SMEs, this agreement brings a sector to the fore that is an essential funding source for businesses of all sizes.

Invest Europe represents the private equity community across Europe, including venture capital, infrastructure investment firms and extensive professional investors, including pension funds and insurance groups. In 2020, private equity invested €88 billion in 8,163 companies, 85% of which were SMEs.

Both the EUIPO and Invest Europe share similar objectives; to help the European economy recover and to stimulate growth through better understanding and use of private equity and intellectual property (IP). A recent study has shown that SMEs with IP rights (trade marks, patents, designs, etc.) report 68% higher revenue per employee than those without. Among other activities, the collaboration includes promoting joint events for investors and SMEs to facilitate investment opportunities and highlight how IP can boost business growth.

• European Buy-Outs delivered 15.06% IRR, beating MSCI Europe index return of 5.48%
• European VC returned 11.09% IRR vs. MSCI Europe index return of 7.82%
• European Growth Capital funds generated 13.66% IRR vs. MSCI Europe (6.40%) and S&P Europe Small Cap Growth index (11.84%)

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘The Performance of European Private Equity Benchmark Report 2020’, a transparent study of private equity returns. The findings show that European private equity strongly outperformed listed equity benchmarks to the end of 2020, underlining the industry’s resilience during the COVID-19 crisis and its consistent ability to support the long-term investors that guarantee the pensions and savings of European citizens.

The Benchmark Report 2020 tracks Buy-Out, Growth Capital and Venture Capital funds over more than three decades to create a comprehensive picture of industry performance. The data shows that European Buy-Outs, the largest segment in the study, delivered an annualised return of 15.06% since inception to end-2020, far ahead of the 5.48% achieved by the MSCI Europe index over the same period. Within the segment, mid-market Buy-Outs that support, help develop and professionalise medium-sized European businesses across the continent, generated an annualised return of 17.01%, beating the listed equities benchmark by 994 basis points.

The data underlines European Buy-Out funds’ consistently high performance, delivering IRRs between 13.00% and 15.50% over periods of 10 years and longer, the timeframes that help long-term investors – such as pension funds and insurers – to deliver better retirements and savings for millions of Europeans. Furthermore, European Buy-Outs perform consistently and in line with their North American peers, while delivering returns ahead of funds from the rest of the world.

Eric de Montgolfier, CEO of Invest Europe, commented: “Over the very long timeframes that matter to pension funds and insurers, European private equity far outperforms listed equities. Moreover, the data underlines European private equity’s resilience in 2020 as efforts to protect companies through the depths of the crisis paid off. This industry consistently delivers the performance that investors need, while supporting the businesses that underpin Europe’s economy and society.”

European Venture Capital and Growth Capital funds clearly beat equity benchmarks to the end of 2020, as funds backing SMEs, start-ups and scale-ups generated strong performance. Venture Capital funds delivered an 11.09% return since inception versus 7.82% for the MSCI Europe index over the same period, whilst Growth Capital funds generated an IRR of 13.66% against 6.40% for their benchmark.

Returns for Venture Capital funds in particular have accelerated as the industry has matured and demonstrated its ability to rival Silicon Valley for supporting innovation and entrepreneurial start-ups. European VC returned 21.90% over five years to end-2020 and 19.70% over 10 years, beating North American funds that delivered 15.51% and 18.50% respectively. Further evidence of the growing strength of VC in Europe is the 1.97x MOIC achieved in this years’ report, an indication of strong cash returns on a par with the 2.03x seen for North American funds.

Performance overall of European private equity improved in 2020, with private equity firms supporting their portfolio companies through the crisis. These efforts led, in fact, to a widening of outperformance over listed indices, and a reduction in the number of loss-making funds (as well as a reduction in levels of losses seen).

The findings echo the resilience displayed in Invest Europe’s recent Investing in Europe: Private Equity Activity 2020 report which showed it was the second-best year for investment and one of the strongest on record for fundraising.

‘The Performance of European Private Equity Benchmark Report 2020’ is available to Invest Europe members. To request a copy of the report, please email info@investeurope.eu.

• Klaus Hommels of Lakestar named as Chair-elect for 2021-2022

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today announced that Anne Fossemalle, Director, Equity Funds at the European Bank for Reconstruction and Development (EBRD), has assumed the role of chair for 2021-2022, taking over from Thierry Baudon, Founder and Chairman Emeritus, Mid Europa Partners.

Anne has over 25 years of private equity experience and holds numerous Supervisory Board and Investment Committee memberships with major fund managers within the EBRD geography. Anne joined the EBRD in 1993 from Natixis and has worked in several capacities prior to heading Equity Funds, notably leading EBRD’s debt and direct equity investments into financial institutions.

Anne holds Masters degrees from Stanford University, Ecole Nationale du Génie Rural, des Eaux et des Forêts (France) and Institut National Agronomique Paris-Grignon (France).

With Anne’s guidance, and under the leadership of Eric de Montgolfier, CEO of Invest Europe, the association will continue to demonstrate private equity’s position as a cornerstone of Europe’s economy and society, supporting over 10 million workers across the continent and creating over a quarter of a million jobs in sectors that will help feed the recovery from the COVID-19 crisis.

A total of 10.2 million people were employed at 23,009 portfolio companies at the end of 2019, ranging from start-ups and SMEs to large multinationals, according to the second edition of Invest Europe’s ground-breaking employment study. That equates to 4.3% of Europe’s active workforce and is on a par with the entire population of Sweden.

In 2020, European private equity stepped up to the mark and invested €88 billion into over 8,000 companies across the continent. In the midst of intense turbulence, investment was 12% lower than the record deployment of 2019, but nevertheless the second highest total on record.

Capital flowed into every region and into core sectors that target digital growth, consumption and long-term health: ICT accounted for 37% of investment; consumer goods & services a further 19%; and biotech & healthcare 15%. Private equity firms helped portfolio companies through the crisis with follow-on equity investments totalling €26 billion in 2020.

Private equity’s ability to provide strong returns on investment for long-term investors, namely pension funds and insurers seeking to grow savers’ and pensioners’ contributions, was also in full evidence. Fundraising reached €101 billion in 2020, again lower than 2019’s pre-pandemic record, yet the third-year in a row that the industry has secured over €100 billion from long-term investors. That takes fundraising for the last five years to €500 billion, providing abundant capital to support existing European portfolio companies, while identifying and backing new, attractive investment opportunities.

As Chair, Anne will be supported by Invest Europe’s board of directors, including the new appointments of Tom Allen (Advent), Frans Tieleman (Eurazeo), Louis Flamand (Metlife) and Klaus Hommels (Lakestar) who has also been appointed Chair-elect for 2021-2022. Meanwhile, Max Römer, Quadriga Capital, has agreed to remain as Treasurer for another year.

• Private equity backed companies add over 254,000 jobs in 2019, 5.5% employment growth
• Businesses benefitting from PE investment employ 10.2m people across Europe

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its ‘Private Equity at Work’ report. The research shows an industry that is a cornerstone of Europe’s economy and society, supporting over 10 million workers across the continent and creating over a quarter of a million jobs in sectors that will help feed the recovery from the COVID-19 crisis.

A total of 10.2 million people were employed at 23,009 portfolio companies at the end of 2019, ranging from start-ups and SMEs to large multinationals, according to the second edition of Invest Europe’s ground-breaking employment study. That equates to 4.3% of Europe’s active workforce and is on a par with the entire population of Sweden.

Private Equity at Work demonstrates private equity’s outsized contribution to European job creation. Companies backed by private equity added 254,157 net new jobs in 2019, about the same as the working population of Tallinn. The figure represents growth of 5.5% on the previous year and far outstrips the average job growth of 0.9% for Europe as a whole. Around half a million people in Europe found new work with private equity backed companies in 2018 and 2019 combined.

“Private equity is an essential part of the foundation on which the European economy is built and its society flourishes. Our data shows how the industry supports employment and generates jobs through investing in growth, innovation and sustainability across the continent. Private equity’s long-term, flexible patient capital is making a positive difference to European society and is essential to rebuilding the economy after the effects of COVID-19,” said Eric de Montgolfier, CEO of Invest Europe.

Private Equity at Work highlights the industry’s outperformance in sectors that can support the recovery from COVID-19 and drive long-term competitiveness in Europe. ICT was the leading sector for employment growth, adding 7% more jobs in 2019, followed by Biotech & Healthcare and Energy & Environment, both growing by 6%. The large Consumer Goods & Services and Business Products & Services sectors, which each employ over three million people at private equity backed companies, created a combined total of almost 140,000 net new jobs each in 2019.

Private equity is a major employer and creator of new jobs across the continent. France & Benelux was the largest region by number of workers, with firms supporting almost 4.1 million jobs. The UK & Ireland was the fastest growing region for job creation, adding 7.8% more jobs in 2019. The private equity industry significantly outperformed average job market growth across Europe. It is notable that firms in Central and Eastern Europe increased employment by 5.9% against a regional market that was stagnant overall.

The report draws attention to private equity’s key role in helping small and medium-sized enterprises (SMEs) employing fewer than 250 staff, the backbone of Europe’s economy, to develop and expand. A total of 15,278 private equity backed SMEs employed 900,000 people across Europe at the end of 2019. These companies increased employment by more than 10% for the year, with almost one in ten graduating to a higher business size category.

The report marks Invest Europe’s second exhaustive study of private equity’s role in employment in Europe and captures an expanded group of companies. Over time, this data will expand to create a comprehensive picture of private equity’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

• €88 billion of equity invested in over 8,000 European companies in 2020
• €101 billion in new capital raised, taking five-year fundraising to €500 billion

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Investing in Europe: Private Equity Activity 2020’ – the most comprehensive and authoritative source of fundraising and investment data, covering over 1,600 firms in 2020. The report shows resilient private equity activity in 2020 in the face of the COVID-19 pandemic, with the second highest investment level on record, and fundraising over €100 billion for the third year running.

Despite severe disruption and market uncertainty, European private equity invested €88 billion in 2020, 12% less than the record €100 billion invested in 2019, yet still 18% above the average of the previous five years. A total of 8,163 companies received investment, 85% of which were small and medium-sized enterprises (SMEs), Europe’s engine for growth and recovery from the COVID-19 crisis.

The majority of private equity capital flowed into core sectors that target digital growth, consumption and long-term health: ICT accounted for 37% of investment; consumer goods & services a further 19%; and biotech & healthcare 15%. For more than half of European companies invested by the industry during the year, the 2020 investment was a follow-on.

Fundraising reached €101 billion in 2020, also 12% lower than the record €114 billion of 2019, but similarly well above the long-term average. The capital raised takes fundraising for the last five years to €500 billion, providing abundant firepower to support existing European portfolio companies, while identifying and backing new attractive investment opportunities.

Pension funds and insurers committed 39% of funds raised in 2020, underlining the asset class’s contribution to the pensions and savings of European citizens and beyond. More than 40% of capital came from investors outside the region, rising to almost 55% when focusing on fundraising for buyouts.

“Private equity is a long-term asset class. That is what makes it so resilient and such an important cornerstone of the European economy and society. Private equity is already investing significantly in the recovery, providing investment and support that will help companies – and their employees – rebound, adapt and prosper as Europe emerges from the crisis”, said Eric de Montgolfier, CEO, Invest Europe.

Venture capital investment recorded its eighth successive year of growth, reaching €12 billion, while the growth segment posted its second-best year with €14.5 billion invested. Together they accounted for almost 6,900 companies backed.

Investor capital is perfectly aligned with the trend. The venture capital and growth segments both raised €15 billion in 2020 – the best-ever year for growth and the second-best year for VC. That capital will mean more firepower for innovation, growth and the SMEs that are the backbone of the economy as Europe rebuilds following the pandemic.

The data in ‘Investing in Europe: Private Equity Activity 2020’ records the step change in European private equity. Funds are raising and investing more capital on average than at any point in the industry’s history, including the years preceding the financial crisis. Coupled with Invest Europe’s other landmark reports, including “The Performance of European Private Equity Benchmark Report 2019”, and “Private Equity at Work”, the association’s research demonstrates European private equity’s growing contribution to the European economy and society – in terms of investment, financial performance and job creation.

Download the full report here.

On 29 April 2021, business and individual investors organisations – namely Invest Europe, BETTER FINANCE, ecoDa, European Family Businesses, EuropeanIssuers, Federation of European Securities Exchanges (FESE), and SMEUnited – sent a joint letter to the European Commission to convey their shared concerns regarding the upcoming proposal on sustainable corporate governance.

The signing organisations:

• support the concept of sustainable corporate governance as a means to reconcile economic growth, social progress and environmental protection;
• acknowledge the aim of encouraging boards to consider their relevant stakeholders as having intrinsic value for decision-making in the best interest of the company over time;
• encourage the Commission to further pursue strengthening shareholders’ active participation in the governance of companies.

However the signatories:

• consider that the two topics of due diligence and corporate governance should be treated separately, and that the European Commission should avoid an oversimplified, one-size-fits-all approach;
• observe that taking into consideration many interests is a natural part of directors’ duties, and that principles related to this are already included in many corporate governance codes;
• consider that an EU initiative in this area that goes beyond the form of recommendations would be counterproductive;
• envisage that, if introduced, such a move would paralyse the functioning of the board and, in turn, hamper the ability of companies to act decisively to promote a sustainable transition.

Most shareholders have a long-term vision, whether it concerns the shareholdings of family businesses, public or private equity, or end-investors. One focus for enhancing sustainable corporate governance should therefore be to strengthen the long-term engagement of shareholders and investors (including individual shareholders).

As different companies cannot all be managed the same way, developments related to sustainable corporate governance would best come within the existing framework of codes. This way, companies are provided with useful guidance on governance, while allowing shareholders to decide on the best way forward.

As for listed companies, the signatories wish also to highlight that too many restrictions may increase reluctance to use public markets for financing. In this respect, further restrictions in this regard would risk conflicting with the objectives of the Capital Markets Union.

All signing organisations agree that the European Commission should take the time to develop a fully comprehensive analysis which can form the basis of an initiative that is appropriate for all EU27 jurisdictions.

• EU convergence and ownership transition among trends fuelling PE investment in CEE
• 22 companies analysed in detail, including cybersecurity and stem cell research leaders

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Private Equity in CEE: Creating Value and Continued Growth’, an in-depth study of private equity’s role in innovation and economic development across Central and Eastern Europe.

The report, whose work was led by Invest Europe’s CEE Taskforce, investigates the ongoing convergence of CEE countries with other EU regions and the investment trends that have enabled private equity to be a positive force in the region’s progress. It also highlights the industry’s role in innovation and raising ESG standards. These themes are brought to life through detailed case studies of companies backed and fully exited by private equity investors during 2015-2019.

Private equity is intertwined in the CEE landscape, investing €19 billion in almost 3,200 CEE companies between 2010 and 2019. The industry is also a significant employer and source of new jobs across the region. Private equity-backed businesses employed over 316,000 workers at the end of 2018, with companies supported by Invest Europe members increasing employment by 10.7% for the year, far ahead of the 0.7% achieved by all CEE business and outstripping all other European regions.

“Central and Eastern Europe is the fastest-growing region of Europe and presents a wealth of investment opportunities as it converges with the rest of the EU. Private equity is a valuable source of funding for businesses and plays a central role in helping companies professionalise their processes, grow and enter new markets,” said Eric de Montgolfier, CEO, Invest Europe.

Thierry Baudon, Invest Europe Chair, added: “Having spent three decades investing in Central and Eastern Europe, I have seen first-hand the entrepreneurial ideas and ambitious businesses being created across the region. With private equity backing, these companies are not only becoming world-class businesses, but are also creating jobs, improving ESG practices and driving economic growth, while at the same time delivering strong returns for investors.”

Private Equity in CEE analyses 22 companies in detail, including Bitdefender, a Romanian cybersecurity start-up that protected over 30,000 ransomware victims and helped take down one of the largest criminal dark web markets. The report also details the growth of PBKM, Europe’s leading stem cell bank, based in Poland, which increased employee numbers more than ten-fold to 339 over seven years, as well as Estonian aircraft maintenance group Magnetic MRO that entered 12 new markets under private equity ownership.

The report also identifies some of the more recent exits that have helped contribute to CEE’s success in 2020, as well as fast-growing tech companies that are helping fuel the region’s recovery from the COVID-19 crisis, including Czech cloud messaging platform Infobip and Lithuanian second-hand clothes marketplace Vinted.

It addresses the major themes influencing the investment landscape, including the catch-up in wealth between CEE economies and those in the rest of the EU, the transition from founder ownership to a professional governance structure, consolidation, and the improvement in company management and practices. It also highlights the cost advantages and high-skilled workforces available in the region.

In parallel with the publication of the report, Invest Europe will host a webinar on private equity’s role in CEE and opportunities for investment across the region on 11 February 2021 at 17:00 CET. The virtual event will involve discussion of the major themes and insight from:

Thierry Baudon, Chair, Invest Europe & Founder, Mid Europa Partners

Anne Fossemalle, Chair-Elect, Invest Europe & Director, Private Equity Funds, European Bank for Reconstruction and Development (EBRD)
William Watson, Head of the Invest Europe CEE Taskforce & Managing Partner, Value4Capital

For more information and to register for the webinar, please click here.

Today the European Securities Markets Authority (ESMA) and the UK Financial Conduct Authority (FCA) published a Multilateral Memorandum of Understanding (MMoU) on the consultation, cooperation and the exchange of information between each of the EEA competent authorities and the FCA.

Invest Europe and the British Private Equity & Venture Capital Association (BVCA) jointly welcome the commitment made by UK and EU competent authorities to cooperate and exchange information in the future. As we have stated in our mutually agreed position, the private equity and venture capital industry is global in its approach to fundraising, sourcing new deals, working and investing. A coherent approach to our sectors’ regulatory environment, particularly across the British Channel, is therefore fundamental.

As such we find it opportune that the MMoU, which covers entities such as asset management companies, including private equity and venture capital firms, will not supersede applicable legislation and will not limit the use of existing mechanisms of crucial importance to our inherently cross-border industry.

Eric de Montgolfier, Invest Europe CEO, stressed that “close coordination between competent authorities and, ultimately, consistent supervision is needed to ensure that private equity and venture capital managers on both sides of the Channel remain able to operate cross-border, including by using delegation arrangements as is permitted under Article 20 AIFMD”. Michael Moore, the BVCA Director-General, noted “cross-border arrangements, including advisory and delegation arrangements, facilitate fund managers’ and investors’ access to relevant investment professionals and portfolio management expertise. These arrangements remain very important for the private equity and venture capital industry, which operates on a cross-border basis”.

Invest Europe and the BVCA will remain at the disposal of national competent authorities and ESMA in case they wish to receive any further information about the way our industry operates.

The MMoU is available here​.

• Private equity raises €49 billion in H1 2020, in line with prior year
• H1 investment totals €36 billion as firms target activity to strengthen companies

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Investing in Europe: Private Equity Activity H1 2020’, a comprehensive report on private equity activity in Europe during the first half of the year. The report reveals a resilient investment and fundraising environment, as investors and fund managers continue to actively invest in European businesses despite the disruption caused by COVID-19.

Private equity funds raised €49 billion in the first half of 2020, in line with last year’s first half figure, putting the industry on track to raise a full-year total on a par with average fundraising level achieved over the last three years.

Over the same six month period, private equity funds invested €36 billion and backed 3,401 companies, with about 60% of investment value going into follow-on investments, as the industry supported its businesses through the intense liquidity crisis caused by the introduction of economic lockdown measures across Europe.

The figures also highlighted the industry’s continued focus on innovation as investments in ICT and biotech & healthcare accounted for over half of capital invested. In addition, venture capital investment achieved a new half-year record with €5.6 billion invested into innovative start-ups and scale-ups. Overall private equity investment was 17% lower in value as tougher trading conditions and worsening outlooks impacted investment.

“European private equity has demonstrated its adaptability through the crisis caused by ongoing pandemic, supporting existing portfolio companies as and when needed, while continuing to invest in new businesses that require capital and operational expertise to grow,” said Eric de Montgolfier, CEO, Invest Europe.

He added: “While the outlook remains uncertain as governments tighten restrictions on people and businesses, private equity is well placed to help Europe weather the tough conditions and emerge stronger. Indeed, Europe’s private equity managers have shown a clear focus on steering their businesses through the crisis and have the support of pension funds and other long-term investors that are clearly committed to the asset class.”

Following on from its first half activity data report, Invest Europe in collaboration with Arthur D. Little, the international management consulting firm, is preparing to launch the first edition of a report based on a pan-European, forward-looking survey, that captures views from private equity managers and investors on the future of the industry in the context of the COVID-19 pandemic.

The report, which will be released during a webinar hosted by Invest Europe and Arthur D. Little later this month, assesses the impact of COVID-19 on private equity and venture capital but also finds that about 60% of managers and investors expect capital allocations to private equity to rise over the next three years. In addition, a majority expect stronger investment opportunities over the coming 12 months compared to 2019 and believe that ICT, biotech & healthcare and business services will be important areas for investment in the future.

To read the Invest Europe H1 private equity activity report, please click here. To find out more and sign up to the webinar on the pan-European private equity survey, please email us here.

• European buy-outs delivered an IRR of 15.00%, beating MSCI Europe index return of 5.84%
• European VC returns an IRR of 16.79% over a 10-year horizon, close to that of North American funds

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published two new reports demonstrating private equity’s long-term outperformance of public equities. The data shows that European buy-outs delivered an annualised net IRR of 15.00% since inception to end-2019, far ahead of the 5.84% achieved by the MSCI Europe, while growth investments and venture capital also clearly beat equities benchmarks.

The research comes from two Invest Europe publications: the first, ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ compares a range of performance metrics to determine their relative strengths and weaknesses, while the second, ‘The Performance of European Private Equity Benchmark Report 2019’, records private equity performance over the last four decades.

With the publication of these reports, Invest Europe is putting private equity performance under a new lens, comparing like-with-like to create a transparent and fair account of private equity performance and its contribution to investors.

Eric de Montgolfier, CEO of Invest Europe, commented: “As the private equity industry has matured, it has become clear to fund managers and investors alike that traditional measures for comparing private equity investments with listed equities are perfectible. With the publication of these two reports, Invest Europe is demonstrating European private equity’s clear outperformance while supporting the drive to more consistent and robust performance metrics that can enable investors to compare assets more easily.”

Invest Europe’s report on benchmarking public and private markets investments analyses the different metrics available for measuring private equity fund performance. It identifies the strengths and weaknesses of the internal rate of return (IRR), multiple of invested capital (MOIC) and public market equivalent (PME).

The report identifies the modified public market equivalent (mPME), one of the second-generation PME metrics developed by investment advisory firm Cambridge Associates, as an additional and sophisticated tool for assessing private equity performance. mPME enables investors to take account of the effect of holding periods on investment performance and separate the intrinsic performance of the fund manager from the general evolution of markets. It also helps address the challenge of assessing the performance of active funds, that are conservatively valued during their lifetimes, against public equities.

Invest Europe’s performance report measures European private equity returns against relevant stock market indices, as well as private equity funds from North America and the rest of the world on a range of metrics.

The results show that for time horizons of 10 years and over, European buy-outs have routinely delivered an annualised IRR of between 15.00% and 15.50% net of fees, while mid-sized buy-outs generated the best returns of 16.65% over the long term and outperformed the MSCI Europe index by the widest margin.

European venture capital returned a net IRR of 16.79% over a 10-year horizon, performing on a par with North American funds over the same period, while the European growth capital private equity segment performed consistently strongly, generating an annualized IRR of 13.28%, outperforming the MSCI Europe which returned 7.32% over the same timescale.

• European buy-outs delivered an IRR of 15.00%, beating MSCI Europe index return of 5.84%
• European VC returns an IRR of 16.79% over a 10-year horizon, close to that of North American funds

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published two new reports demonstrating private equity’s long-term outperformance of public equities. The data shows that European buy-outs delivered an annualised net IRR of 15.00% since inception to end-2019, far ahead of the 5.84% achieved by the MSCI Europe, while growth investments and venture capital also clearly beat equities benchmarks.

The research comes from two Invest Europe publications: the first, ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ compares a range of performance metrics to determine their relative strengths and weaknesses, while the second, ‘The Performance of European Private Equity Benchmark Report 2019’, records private equity performance over the last four decades.

With the publication of these reports, Invest Europe is putting private equity performance under a new lens, comparing like-with-like to create a transparent and fair account of private equity performance and its contribution to investors.

Eric de Montgolfier, CEO of Invest Europe, commented: “As the private equity industry has matured, it has become clear to fund managers and investors alike that traditional measures for comparing private equity investments with listed equities are perfectible. With the publication of these two reports, Invest Europe is demonstrating European private equity’s clear outperformance while supporting the drive to more consistent and robust performance metrics that can enable investors to compare assets more easily.”

Invest Europe’s report on benchmarking public and private markets investments analyses the different metrics available for measuring private equity fund performance. It identifies the strengths and weaknesses of the internal rate of return (IRR), multiple of invested capital (MOIC) and public market equivalent (PME).

The report identifies the modified public market equivalent (mPME), one of the second-generation PME metrics developed by investment advisory firm Cambridge Associates, as an additional and sophisticated tool for assessing private equity performance. mPME enables investors to take account of the effect of holding periods on investment performance and separate the intrinsic performance of the fund manager from the general evolution of markets. It also helps address the challenge of assessing the performance of active funds, that are conservatively valued during their lifetimes, against public equities.

Invest Europe’s performance report measures European private equity returns against relevant stock market indices, as well as private equity funds from North America and the rest of the world on a range of metrics.

The results show that for time horizons of 10 years and over, European buy-outs have routinely delivered an annualised IRR of between 15.00% and 15.50% net of fees, while mid-sized buy-outs generated the best returns of 16.65% over the long term and outperformed the MSCI Europe index by the widest margin.

European venture capital returned a net IRR of 16.79% over a 10-year horizon, performing on a par with North American funds over the same period, while the European growth capital private equity segment performed consistently strongly, generating an annualized IRR of 13.28%, outperforming the MSCI Europe which returned 7.32% over the same timescale.

‘The Performance of European Private Equity Benchmark Report 2019’ and ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ are available to Invest Europe members. To request a copy of the reports, please email media@investeurope.eu.

• Private equity backed firms added over 173,000 jobs in 2018, 5.5% employment growth
• First ever report underlines industry’s key role in employment and job creation

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its first ever ‘Private Equity at Work’ report. A total of 10.5 million people were employed at 22,659 private equity backed businesses in Europe at the end of 2018 – the first full year analysed in the research. The figure represents 4.5% of the continent’s active workforce and equates to more than the entire population of Greece.

The research presents a transparent account of European private equity’s record on employment, demonstrating the industry’s commitment to workers and job creation just as businesses across the continent seek to bounce back from the economic impact of the COVID-19 crisis.

The report also highlights the impact of private equity investment and active management on job creation. Companies supported by Invest Europe members created 173,124 net jobs in 2018, more than the number of people passing through Amsterdam Central Station each day. Employment levels at those companies increased by 5.5% in 2018, five times the 1.1% growth achieved by European businesses on average. All stages of private equity created jobs at a higher rate than the European average, ranging from 5% for buyouts to 16% growth for venture capital.

“Invest Europe’s Private Equity at Work demonstrates just how deeply ingrained private equity is in the economic and social fabric of Europe. The industry is a major supporter of employment across the whole continent. Not only do its companies create jobs, but they do it at a much faster rate than the average European business,” said Eric de Montgolfier, CEO of Invest Europe.

De Montgolfier added: “Private equity is an engine for growth. And growth is an engine for job creation. In these challenging times, private equity backed companies are not immune from the unprecedented impact of COVID-19 on the economy. However, the industry’s focus on building better businesses, supporting investors and fuelling innovation, in turn driving growth and job creation, means that private equity has a critical role to play in Europe’s economic recovery.”

The report analyses the industry’s contribution to employment and job creation across every European region and all major industry sectors. Private equity backed businesses incorporated in Ile-de-France employed 1.2 million people, while nearly 3.4 million people worked for companies in the business products and services sector across Europe. Biotech and healthcare were among the best performing industries for job creation, increasing employment by 9.0% in 2018.

The research draws particular attention to private equity’s key role in helping small and medium-sized enterprises (SMEs) employing fewer than 250 staff, the backbone of the European economy, achieve their growth aspirations. A total of 14,500 private equity backed SMEs employed almost 900,000 people across Europe at the end of 2018. These companies increased employment at a rate of 10% in 2018, with over one in ten graduating to a higher business size category.

Invest Europe has started collecting data for future employment and job creation reports, expanding the scope of the study to capture information on more private equity backed companies in Europe. Over time, this data will expand to create a comprehensive picture of private equity’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

• Investment rises 7% to €2.95bn, VC investment achieves new record

Private equity firms invested in a record 464 companies in Central and Eastern Europe (CEE) in 2019, with investment increasing by 7% year-on-year to €2.95 billion, as the industry strengthened its commitment to the SMEs and start-ups that are fueling the region’s economic growth and innovation, according to Invest Europe data.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today released its 2019 Central and Eastern Europe Private Equity Statistics. The report shows that private equity investment reached the second-highest total ever recorded at €2.95 billion, with the number of companies up 10% on the previous year to a new all-time high. Both figures are well above the previous five-year average for the region.

Venture capital investment doubled to a record €338 million in 2019, with 369 companies receiving VC support. The result followed record VC fundraising over the past three years, underlining the CEE’s booming start-up culture, focused particularly on Hungary and Poland.

Robert Manz, chair of Invest Europe’s Central and Eastern Europe Taskforce, commented: “Since the fall of the Berlin Wall three decades ago, Central and Eastern Europe has undergone a remarkable political and economic transformation. Private equity is proud to have played its part, bringing not only capital, but also the expertise and skills to help drive the region’s successful convergence process.”

Eric de Montgolfier, CEO of Invest Europe, added: “The 2019 Central and Eastern Europe Private Equity Statistics paint the picture of a mature investment ecosystem that still has plenty of room to grow. Across the region, private equity and venture capital is supporting innovation and business expansion, which in turn is driving economic growth and job creation.”

Estonia was the leading destination in terms of investment in 2019, accounting for 23% of the private equity capital invested in the region, followed by Poland (20%) and Romania (19%). About half the investment flowed into the information and communication technology (ICT) sector, aiming to follow in the footsteps of CEE tech leaders including Bucharest-founded business automation software group UiPath and Polish online medical appointment booking system developer DocPlanner.

Fundraising for Central and Eastern European private equity funds was €1.4 billion in 2019, in line with the previous five-year average. At €631 million, venture capital firms accounted for 45% of the capital raised, the second-highest total on record. Buyout funds represented 40% of the total raised, with growth funds accounting for the remaining 15%.

The 2019 Central and Eastern Europe Private Equity Statistics are available to download from Invest Europe’s website, investeurope.eu. Please click here to access the full report.

• Anne Fossemalle of the EBRD named as Chair-elect for 2021-2022

Thierry Baudon, 2019-2020 Chair of Invest Europe, is to continue as Chair, following the sudden and unexpected death of Roderick “Rory” Macmillan (Chair-elect for 2020-2021) last month. Thierry will remain in the role to steer Invest Europe through the challenges ahead and help cement private equity’s critical role in the European economic recovery.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, last month learned of the sad passing of Rory, Managing Director, Global Government Affairs, The Carlyle Group. As Vice-Chair of the Large Private Equity Platform (EPER), and a long-term supporter of Invest Europe, Rory was due to succeed Thierry, former Managing Partner of Mid Europa Partners, in June at the association’s Ordinary General Meeting. Our thoughts remain with Rory’s family and his husband Koen Kleyn.

Thierry Baudon commented: “Rory was a vigorous supporter of invest Europe and a strong voice for the private equity industry. He was passionate about many issues, including ESG and gender, diversity and inclusion. We will honour his memory and contribution by striving to show the private equity industry’s leadership on these matters, as well as many others.”

With Thierry’s ongoing guidance, and under the leadership of Eric de Montgolfier, CEO of Invest Europe, the association will continue to demonstrate private equity’s critical role at the centre of the European economy, safeguarding and bettering the pensions of millions of Europeans, while fueling innovation, feeding entrepreneurship and growing people, companies and ideas where others will not, and dare not.

Total fundraising in Europe in 2019 climbed to €109 billion, the highest total over the past decade, with over two-thirds coming from long-term investors, including pension funds and insurers. In parallel, the total equity amount invested in European companies increased to €94 billion in 2019, the highest level of investment ever recorded. Some 85% of companies backed were small and medium-sized enterprises (SMEs), the engine of the European economy.

As Chair, Thierry will continue to be supported by Invest Europe’s board of directors. Anne Fossemalle of the European Bank for Reconstruction and Development, currently Vice-Chair representing the LP Platform, has been appointed Chair-elect for 2021-2022. Meanwhile, Max Römer, Quadriga Capital, has also agreed to remain as Treasurer for another year.

To read more about Rory Macmillan and his contribution to Invest Europe and the industry, please click here. For more information on Thierry, you can read his biography here.

• 10% annual rise to record high of €94 billion in equity invested in European firms
• Over 2015-2019, more than 22,000 SMEs in Europe backed by private equity and venture capital funds – almost 85% of portfolio companies

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its ‘Investing in Europe: Private Equity activity 2019’ – the most comprehensive and authoritative source of fundraising and investment data available, covering over 1,400 firms. The report reveals record levels of private equity fundraising and investment in 2019, underscoring Europe’s attractiveness and unique positioning for the private equity sector.

Total fundraising in Europe in 2019 climbed to €109bn, up 6% from 2018 and the highest total over the past decade. In parallel, the total equity amount invested in European companies increased 10% year-on-year to €94bn in 2019 – the highest level of investment ever recorded – with continued concentration across three sectors: ICT (27%), consumer goods & services (23%) and business products & services (19%).

Small and medium-sized enterprises (SMEs) are the backbone of the European economy and private equity’s overwhelming focus on, and funding of, SMEs reaffirms the sector’s commitment to Europe’s economic engine.

Over the 2015-2019 period, over 22,000 SMEs across Europe have been backed by private equity and venture capital funds, making up almost 85% of the portfolio companies. And the amount committed to private equity funds raising under €1bn over the 2015-2019 period increased by a dramatic 50% – noteworthy given their focus on SMEs and start-ups.

“In the midst of an unprecedented and unparalleled crisis, the private equity sector is uniquely positioned to help jump-start Europe’s economic and societal recovery, given appropriate recognition and support where required,” stated Eric de Montgolfier, CEO, Invest Europe.

“Identifying and nurturing start-ups today is essential for continued innovation in Europe, as well as laying the groundwork for a better tomorrow,” added de Montgolfier, pointing to the €15 billion in venture capital fundraising in 2019 – a 17% increase over 2018 that also marks the 7th consecutive year of growth.

Venture capital investments more than doubled between 2016 and 2019, with backing for almost 4,700 companies in 2019 alone; examples of innovative sectors backed by venture capital include Biotech/Healthcare and ICT, both of which contribute significantly to the battle against the COVID-19 pandemic. And thanks to an increase in average venture capital fund size since the 2008 financial crisis, venture capital-backed businesses and their investors are better equipped to handle crises.

Pension funds and insurance companies, including Europe’s largest institutional investors, make up some 40% of the private equity funding raised in Europe in the 2015-2019 period, a clear indication of confidence in an asset class that directly contributes to better pensions and returns for Europe’s citizens. Over the same period, pension funds have invested  €114bn in European private equity/venture capital funds – a clear endorsement of their long-term contribution and Europe’s leadership position on Environment, Social and Corporate Governance (ESG).

More than 45% of the private equity capital raised across the continent in 2019 came from non-European investors, led by investors from North America (28%). Ensuring private equity’s contribution to the European economic recovery is supported by private equity and venture capital’s focus on the region, with 63% invested domestically, 29% in another European country and a mere 8% from outside Europe.

By its very nature, private equity has always sought to unlock potential through patient capital and vibrant, active ownership resulting in growth and jobs. These qualities, if supported by adequate liquidity and employment-support measures provided by state aid programmes, will ensure the private equity sector and the 26,000 companies (since 2015) it backs, stand ready to jump-start the European economy. And it will do so in solidarity with the entire coalition of European stakeholders required to overcome the current pandemic.

Download the full report here.