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European private equity activity hits highs in 2019

private equityPrivate equity and venture capital fundraising hit €109 billion, up 6% in 2019, and the highest total over the last decade.

In parallel, the total equity amount invested in European companies increased 10% year-on-year to €94 billion in 2019, the highest level on investment ever recorded.

The figures, which appear in a report published by Invest Europe, the pan-European trade body for Europe’s private equity, venture capital and infrastructure sectors, show that in 2019 private equity and venture capital firms invested in a total of 7,900 companies, 8% above the five-year average.

Some 84% of the firms were small and medium-sized enterprises (SMEs) and European private equity industry invested in 22,000 SMEs between 2015 to 2019.

“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,” said Eric de Montgolfier, chief executive of 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 marked the seventh consecutive year of growth.

Venture capital funds invested €11 billion in start-ups and scale-ups in 2019, 19% more than the previous year.

In total, the European venture capital industry backed almost 4,700 companies in 2019.

Institutional investors continued to demonstrate strong backing for European private equity in 2019 with pension funds being the largest investor group, accounting for 29% of capital raised, taking their commitments to €114bn over the last five years.

Together with insurance companies, they make up 40% of the capital committed to the industry since 2015.

Capital raised outside Europe increased to 45% of the total in 2019, led by investors from North America (28%). Fundraising from investors in Asia-Pacific also reached a new high of 16% of the total.

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