European PE deal volume in Q2 dips to lowest level since 2013, says Pitchbook

Financial data

European private equity deal volume dipped in Q2 2020 to its lowest quarterly figure since Q3 2013 driven by the uncertainty caused by Covid-19, Pitchbook’s Q2 report shows.

The Q2 European Private Equity Breakdown report, published by Pitchbook, demonstrates that 650 transactions closed in the second quarter of the year for a total of EUR9.8 billion – representing a year on year decrease of 31.5 per cent and 18.7 per cent, respectively.

Pitchbook is a data company providing research and data on venture capital, private equity, M&A, and public companies. The company believes that deal activity will pick up in the coming quarters, as managers seek to deploy the EUR237.2 billion that the industry holds in dry powder, “aggressively but wisely”.

Although every region in Europe saw a decrease in activity, the UK & Ireland recorded the starkest drop at 62.3 per cent.

Meanwhile, private equity deal activity in the France & Benelux region has grown over the past decade, with France contributing most of it. Over 1,000 deals per year have closed since 2015, and GPs have invested at least EUR100 billion in aggregate each year since 2017.  

Part of the reason for this is that Brexit has reduced the number of available deals in the UK – Europe’s biggest market- thus shifting a portion of deal activity to the France & Benelux region instead.

With the no-deal Brexit threat looming, the PE industry could see a further shift of deal activity to the region, as seen from Sweden-based firm EQT launching a new French operation by opening a Paris office this year.

The report also pointed out that European private equity exit value in 2020 is heading for its lowest annual total in six years. Exit value in Q2 saw an increase from Q2 2019 however, supported by the largest European IPO in almost a decade.