Private equity into European firms reached ten-year high

Private equity investment in European companies hit a ten-year high in 2017, according to data.

Figures from trade association Invest Europe showed that European private equity invested €71.7 billion, a 29% year-on-year increase from 2016.

Almost 7,000 companies received investment, of which 87% were small and medium-sized enterprises (SMEs).

Invest Europe’s 2017 ‘European Private Equity Activity’ report revealed that private equity fundraising reached €91.9 billion in 2017, surpassing the previous year by 12% for the highest amount since 2008.

European private equity managers distributed investment capital to work across all fund sizes. Divestments (measured at cost) increased by 7% to €42.7 billion – the third highest level of the past decade, as around 3,800 European companies were exited – the process by which firm realise their initial investment – in 2017.

Michael Collins, Invest Europe’s chief executive officer, said: “Private capital markets are deepening as European economies are growing.”

Companies focused on consumer goods and services in Europe increased their share of private equity investment last year at 24.4% of the total.

Almost equalling this were business-to-business products and services, increasing by 51% to account for 23.5% of the total. The technology sector reached a ten-year investment high, with 17% of the total, a year-on-year increase of 6%.

France and Benelux-based companies received 27% of private equity investments in 2017. Close behind was the UK and Ireland with 26%.

Pension funds provided 29% of all capital raised, followed by funds of funds (20%), family offices and private individuals (15%), sovereign wealth funds (9%) and insurance companies (8%).

©2018 funds europe

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