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Private equity rides to support European firms

European private equityPrivate equity funds injected €36 billion into European companies in the first half of the year, helping them combat the “intense liquidity crisis” caused by lockdowns.

The investment came as private equity funds in Europe raised €49 billion in H1, matching the previous half-year’s total.

Invest Europe, an industry body, said the industry was on track to raise a sum of money for the full year that would be on a par with average fundraising levels achieved over the last three years. However, the overall figure for private equity investment was 17% lower in value .

Invest Europe’s ‘Investing in Europe: Private Equity Activity H1 2020’ also shows that private equity backed 3,401 companies during the period, with about 60% of investment value going into follow-on investments.

In addition, venture capital investment achieved a new half-year record with €5.6 billion invested into start-ups and scale-ups.

Eric de Montgolfier, CEO, Invest Europe, said: “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.”

An upcoming first-half activity report from the organisation and Arthur D Little, a consultancy, will show that about 60% of managers and investors expect pan-European capital allocations to private equity to rise over the next three years and that a majority expect stronger investment opportunities over the coming 12 months compared to 2019.

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