Invest Europe, an association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has published its ‘Private Equity at Work’ report which shows an that the PE sector is supporting over 10 million workers across the continent and creating over a quarter of a million jobs in sectors that will help feed the recovery from the Covid-19 crisis.
A total of 10.2 million people were employed at 23,009 portfolio companies at the end of 2019, ranging from start-ups and SMEs to large multinationals, according to the second edition of Invest Europe’s ground-breaking employment study. That equates to 4.3 per cent of Europe’s active workforce and is on a par with the entire population of Sweden.
Private Equity at Work demonstrates private equity’s outsized contribution to European job creation. Companies backed by private equity added 254,157 net new jobs in 2019, about the same as the working population of Tallinn. The figure represents growth of 5.5 per cent on the previous year and far outstrips the average job growth of 0.9 per cent for Europe as a whole. Around half a million people in Europe found new work with private equity backed companies in 2018 and 2019 combined.
“Private equity is an essential part of the foundation on which the European economy is built and its society flourishes. Our data shows how the industry supports employment and generates jobs through investing in growth, innovation and sustainability across the continent. Private equity’s long-term, flexible patient capital is making a positive difference to European society and is essential to rebuilding the economy after the effects of Covid-19,” says Eric de Montgolfier, CEO of Invest Europe.
Private Equity at Work highlights the industry’s outperformance in sectors that can support the recovery from Covid-19 and drive long-term competitiveness in Europe. ICT was the leading sector for employment growth, adding 7 per cent more jobs in 2019, followed by Biotech & Healthcare and Energy & Environment, both growing by 6 per cent. The large Consumer Goods & Services and Business Products & Services sectors, which each employ over three million people at private equity backed companies, created a combined total of almost 140,000 net new jobs each in 2019.
Private equity is a major employer and creator of new jobs across the continent. France & Benelux was the largest region by number of workers, with firms supporting almost 4.1 million jobs. The UK & Ireland was the fastest growing region for job creation, adding 7.8 per cent more jobs in 2019. The private equity industry significantly outperformed average job market growth across Europe. It is notable that firms in Central and Eastern Europe increased employment by 5.9 per cent against a regional market that was stagnant overall.
The report draws attention to private equity’s key role in helping small and medium-sized enterprises (SMEs) employing fewer than 250 staff, the backbone of Europe’s economy, to develop and expand. A total of 15,278 private equity backed SMEs employed 900,000 people across Europe at the end of 2019. These companies increased employment by more than 10 per cent for the year, with almost one in ten graduating to a higher business size category.