European private equity activity hits highs in 2019

Private equity and venture capital fundraising hit EUR109 billion, up 6 per cent, in 2019, and the highest total over a decade, according to new data from Invest Europe.

In parallel, the total equity amount invested in European companies increased 10 per cent year-on-year to EUR94 billion in 2019, the highest level on investment ever recorded.

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” report – the most comprehensive and authoritative source of fundraising and investment data available, covering over 1,400 firms.

The report shows that in 2019 private equity and venture capital firms invested in a total of 7,900 companies, 8 per cent above the five-year average, some 84 per cent of which were small and medium-sized enterprises (SMEs). The European private equity industry invested in 22,000 SMEs between 2015 to 2019, underlining the sector’s commitment to Europe’s economic engine.

“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,” says 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 EUR15 billion in venture capital fundraising in 2019 - a 17 per cent increase over 2018 that also marks the 7th consecutive year of growth.

Venture capital funds invested EUR11 billion in start-ups and scale-ups, 19 per cent more than the previous year. The European VC industry backed almost 4,700 companies in 2019, supplying funding to entrepreneurs in sectors including Biotech/Healthcare and ICT, both of which contribute significantly to the battle against the COVID-19 pandemic.

Institutional investors continued to demonstrate strong backing for European private equity in 2019. Pension funds were the largest investor group, accounting for 29 per cent of capital raised, taking their commitments to EUR114bn over the last five years. Together with insurance companies, they make up 40 per cent of the capital committed to the industry since 2015, a clear endorsement of the asset class’s contribution to returns and better pensions for European citizens.

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