Invest Europe

• Capital under management more than doubles since 2016 to reach new heights
• Dry powder of €348bn provides increased investment capacity to support European companies

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published Positioned for the Challenge: Capital Under Management & Dry Powder 2022, which shows the European private equity and venture capital industry’s step up in scale and investment capacity, achieving new records for both capital under management and dry powder.

• Private equity and venture capital managed a record €1,004 billion in capital on behalf of investors at the end of 2022, up from €873 billion in 2021, the first time the European industry has broken through the €1 trillion threshold. Of the total, €656 billion represented portfolio value at original investment cost, held by 2,863 firms across 8,140 funds, underlining the expansion of the industry.
• Private equity and venture capital dry powder reached €348 billion in 2022, equating to 94% of the total equity invested by the industry between 2020 and 2022, underscoring the balance between investment capacity and the opportunities. Buyout investment potential increased to €219 billion in 2022. European venture capital dry powder also rose to a record high of €53 billion, giving the industry increased capacity to support dynamic and innovative start-ups across the continent.

Now in its fourth year, Invest Europe’s Capital Under Management & Dry Powder tracks the strong and sustainable growth of the European private equity and venture capital industry, with capital under management more than doubling since 2016, as long-term investors allocate more capital to opportunities in world-leading European businesses, fast-growing scale-ups, and groundbreaking innovators.

Eric de Montgolfier, CEO of Invest Europe, commented:

• “The European private equity and venture capital industry continues to scale new heights, demonstrating its growth potential and appeal to investors. The industry’s story is as straightforward as it is compelling. Capital committed to skilled and experienced European private equity managers helps build better businesses that can generate value and superior returns. This steady creation of capital and wealth fuels a virtuous circle that benefits Europe’s economy and society.”
• “Ever since the outbreak of COVID, European businesses have weathered extreme challenges and uncertain markets. Private equity has demonstrated its ability to support companies through volatile conditions and the growth in dry powder – from large buyouts to venture capital – means the industry is well-equipped to help companies face the challenges of today and tomorrow.”

Invest Europe’s Capital Under Management & Dry Powder report finds that pension funds accounted for 27% of all uncalled commitments at the end of 2022, followed by fund of funds and other asset managers – often conduits for smaller pension funds – on 18%, a clear sign of the long-term investors’ confidence in the asset class and its potential to support better retirements for European citizens. Family offices and private individuals represented 13% of dry powder capital.

The report analyses data by region, funds size and fund type, and also investigates the relationship between successor funds from established managers and first-time funds from new managers. It shows that successor funds account for 89% of dry powder and 78% of portfolio at cost, while also highlighting the consistent growth of first-time funds, which achieved €182 billion of capital under management in 2022. Since 2013, 1,690 new first-time funds have entered the market.

To download a copy of Positioned for the Challenge: Capital Under Management & Dry Powder 2022 (members-only), please click here.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its 2022 Central and Eastern Europe Private Equity Statistics. Coming off a record setting 2021, the research highlights the resilience and innovation at work across the region amid a challenging global and regional environment. It reports that CEE venture capital investment hit a new all-time record and the number of buyouts reached a new peak.

• Venture capital investment achieved its highest ever result at €821 million in 2022, a 13% increase on the previous record of 2021, with 451 companies receiving funding. The figure represents a ten-fold increase on the level of investment just ten years ago. CEE venture capital was the largest segment for fundraising, accounting for 44% of total capital commitments, with the €708 million, raised in line with the five-year average for the region.
• By number of companies, buyouts increased strongly to 64 in total, a record for the region. The absence of larger transactions meant that total private equity and venture capital investment declined from 2021’s record to €2.77 billion, 12% below the five-year average for CEE.

The 19^th annual edition of the Central and Eastern Europe Private Equity Statistics, produced in partnership with Gide Loyrette Nouel, also illustrates the growing support of private individuals and family offices who stepped up their commitments to represent 23% of total fundraising in 2022, up from 14% the previous year, an important sign of the development of the region’s investor base and the continued confidence of private investors in CEE’s future. Government agencies continued to play an important role, providing 33% of the funds raised. Total fundraising declined from 2021 levels to €1.62 billion, in-line with most of the previous five years even in the face of the threat, then outbreak, of war in Ukraine.

Bill Watson, Chair of Invest Europe’s Central and Eastern Europe Taskforce, commented:

• “Central and Eastern Europe remains a resilient and dynamic market. Its strong entrepreneurial spirit, deep pool of technical talent, and the ambition of its hard-working people continue to deliver, supported by the catalytic powers of private equity and venture capital investment and expertise. Together, we are innovating and creating the CEE business champions of tomorrow.”

Eric de Montgolfier, CEO of Invest Europe, added:

• “Despite the obvious challenges, the fundamental and unbroken economic drivers of increasing incomes, continued foreign investment, and CEE’s dynamic, internationally integrated marketplace continue to generate investment opportunities. Private equity has a critical role to play in shaping the region’s business and investment environment, and deserves the full attention of institutional investors.”

The region’s strength in high-growth industries at the forefront of innovation and growth was reflected in the companies and sectors receiving investment in 2022. The Information & Communications Technology (ICT) sector represented over half the businesses backed, while the blossoming field of Biotech & Healthcare accounted for over 8% of investment and companies backed. Growth investment into SMEs and fast-growing companies that are the backbone of the region reached €1.23 billion in 2022, making it the largest investment segment.

To read the 2022 Central and Eastern Europe Private Equity Statistics, please click here.

• Capital under management doubles since 2012, number of active funds rises by over 40%
• Capacity for new investments reaches €285bn in Europe

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published Positioned for the Challenge: Capital Under Management & Dry Powder 2021, the latest research highlighting the scale and growth of the private equity and venture capital (PE/VC) industry in Europe over the past decade, as well as the capital available for new investments.

• Private equity and venture capital managed a record €846 billion in capital on behalf of investors at the end of 2021, of which €561 billion represented portfolio value at original investment cost. That capital is held by 2,737 firms, managing 7,595 active funds across Europe, a 42% increase on the number of funds from 2012.
• PE/VC unallocated capital reached €285 billion in 2021, equating to 84% of the total equity invested by the industry between 2019 and 2021. Of that capacity, €181 billion is in the hands of buyout funds, while venture capital has €42 billion available for investment.

The 3^rd annual edition of the Capital Under Management & Dry Powder report gives a transparent picture of the size and scope of the private capital industry in Europe, separating managers and funds on the continent from the global picture and the broader alternative assets universe. It shows an industry growing sustainably, with reserves in line with opportunities ahead.

Funds located in the UK & Ireland accounted for 45% of unallocated capital and 53% of portfolio value (at initial investment cost), matching trends seen over the last decade. The data also highlights large industries and well-capitalised funds across the continent, with France and Benelux the second-largest region, holding 28% of all unallocated capital and 24% of portfolio at cost in 2021. Nordic funds were next largest with €55 billion in portfolio at cost and €32 billion in unallocated capital.

Eric de Montgolfier, CEO of Invest Europe, commented:

• “Data is essential for explaining private capital and its role. However, sometimes that data is lacking, or so broad that it does not reflect the reality on the ground, in Europe. Invest Europe’s Capital Under Management & Dry Powder report delivers a comprehensive and transparent view of our industry, its development over the last decade, and its capacity for new investment.”
• “As European private equity and venture capital has grown, so unallocated capital has increased steadily and in step with the opportunities. With rising interest rates and looming economic uncertainty, European private capital is well-positioned to invest and guide European companies through a challenging period.”

Invest Europe data tracks PE/VC capital by investor type, showing that pension funds account for 27% of unallocated capital, highlighting private equity’s essential role in funding better retirements for European citizens. Fund of funds and other asset managers represent a further 19% of unallocated capital, followed by other long-term investors including family offices, insurers and sovereign wealth funds. The report also delves deeper into capital by vintage year and compares first-time funds from new managers with successor funds from established firms.

To download a copy of Positioned for the Challenge: Capital Under Management & Dry Powder 2021, please click here.

• €138 billion of equity invested in almost 9,000 European companies, up 51% on 2020
• €118 billion new capital raised, the highest level seen to date

Brussels, Belgium – While the effects of the COVID pandemic continued to be felt across Europe in 2021, with renewed lockdowns and restrictions, private equity and venture capital firms engaged in record-breaking investments and fundraising – guiding entrepreneurs, backing companies and supporting Europeans across the continent.

European private equity firms invested €138 billion in Europe in 2021, registering an astounding 51% increase over 2020 and setting an all-time record in the process, according to today’s newly published report – ‘Investing in Europe: Private Equity Activity 2021’ – by Invest Europe, the voice of Europe’s private equity, venture capital and infrastructure sectors, as well as their investors.

The report – which is the most comprehensive source of fundraising and investment data, covering over 1,800 firms – shows strong recovery in activity following the impact of COVID-19, with new investment records for buyouts, growth investments and venture capital, as funds backed more European companies than ever. A total of 8,895 companies received investment, 13% above the average of the past five years, underscoring the industry’s pivotal role in providing support for companies to weather tough conditions.

All private equity segments witnessed strong investment growth and new records in 2021. Investment in buyouts increased by 28% to €79 billion, growth investment soared 124% to €35 billion, while venture capital investment rose sharply by 70% to €20 billion. Information Communications Technology, Consumer Goods and Services, and Biotech and Healthcare ranked as the leading sectors, accounting for two-thirds of investment, as capital flowed into companies that are driving innovation and seeking solutions for a healthier future.

Eric de Montgolfier, CEO of Invest Europe, commented:

• “Private equity is there to help businesses succeed, whatever the conditions. This is an industry whose managers have a broad understanding of markets and deep experience in sectors that are driving European growth and competitiveness, operating on an altogether larger scale than before.
• “Private equity is more than an asset class, it is a complete ecosystem.
• “Private equity represents a continuous spectrum of backing for businesses, from the earliest stages of seed funding to the latest stage of buyouts.”

Underlining the increasing scale of the European private equity industry, new funds raised reached €118 billion in 2021, the highest level seen to date. Over the past five years, fund managers have raised over €542 billion for investment in start-ups, SMEs, mid-market and large companies across the continent.

Growth funds raised a record €20 billion in 2021, four times the total raised just five years ago. Venture capital achieved its twelfth successive year of fundraising growth with a record €18 billion raised. The records illustrate Europe’s success in creating new tech and biotech champions, as well as investor appreciation of the strong returns available from early-stage and growth investments.

Fund of funds were the largest providers of capital in 2021, accounting for 23% of all funds raised. Pension funds committed 20% of funds raised, followed by family offices and private individuals on 15%.

It was a strong year for exits in 2021, reflecting returning market confidence among buyers and their belief in the businesses built by private equity. Exits at cost (the original equity amount invested) rose by 60% to €41 billion, as firms exited over 3,700 companies, an increase of 13% on 2020 levels. Divestments by growth firms and venture capital both recorded their second highest totals in the 2007-2021 period at €8 billion and €3 billion respectively.

This data, coupled with Invest Europe’s “Private Equity at Work” report, demonstrate European private equity’s growing contribution to the European economy – in terms of investment, financial performance, resilience and job creation.

Download the full report here.

• Private equity and venture capital-backed companies add over 103,000 jobs in 2020
• Businesses with PE/VC investment employ 9.9 million people across Europe, 4.3% of workforce

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its ‘Private Equity at Work’ report. The research illustrates how private equity helped European companies overcome the effects of COVID-19 to add 2% more jobs in 2020, a year when the overall European workforce contracted by 1.6%.

• Private equity and venture capital-backed businesses created over 103,000 jobs in 2020, supporting SMEs that are the backbone of the economy and giving a boost to innovative and entrepreneurial companies operating in technology, fintech and finance, and biotech and healthcare.
• The industry demonstrated that it continues to be a cornerstone of European society, securing jobs for almost 10 million workers at 24,663 companies across the continent during an intensely challenging period for business and society alike.

Now in its third year, Invest Europe’s Private Equity at Work tracks the progress in employment and job growth at companies that were backed by private equity and venture capital between 2017 and 2020, providing a cumulative picture of the industry’s contribution to the workplace. Venture capital-backed companies created 50% net new jobs for 86,258 workers over the period, while companies benefitting from buyout investment hired 221,694 more people – an increase of 11%. Generalist private equity firms that invest in businesses across all stages of development added 15% more jobs, or 205,726 additional people.
Eric de Montgolfier, CEO of Invest Europe, commented:

• “Private equity and venture capital-backed companies throughout Europe employ more people than the entire population of Hungary, and created new jobs in 2020 equalling the entire population of Nancy, France, or Bedford, U.K.”
• “The pandemic did impact European employment and private equity and venture capital-backed businesses could not entirely escape the effects. However, there can be no doubt that the industry’s long-term investment and hands-on operational approach builds better businesses and creates jobs year in, year out.”

Over 80% of companies in Invest Europe’s research were SMEs employing fewer than 250 staff. This critical segment at the heart of national economies and local communities witnessed job growth of 5.3% and supported 854,459 workers in 2020.
Private Equity at Work highlights private equity’s contribution to sectors that are driving innovation and working for a better future for Europe’s citizens. For example, 7.4% more jobs were created in Biotech & Healthcare, underlining Europe’s leading role in drugs to combat COVID and other life-threatening conditions. Meanwhile, Finance & Insurance – at the centre of the fintech revolution – and Information Communications Technology added 7.7% and 4.9% more jobs respectively.
Private Equity at Work is Invest Europe’s exhaustive study of private equity’s role in employment in Europe. It aims to develop a comprehensive picture of the industry’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

European Mid-Market Private Equity supports SMEs and investors with growth and returns outperformance.

• European mid-market private equity delivers 17% annualised net return to end-2020
• €34bn invested into 841 companies in 2020, supporting companies through the pandemic
• €137bn raised by the mid-market from 2016-2020, up 65% on previous five-year period

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has today published a new report entitled ‘Europe’s Engine for Growth’, highlighting mid-market private equity’s contribution to mid-sized firms that are the backbone of the European economy, as well as its strong returns for pension funds and long-term investors that support pensions and savings.
The research digs deep into the performance and investment profiles of the European mid-market to give new insights into this critical segment of the private equity industry. It shows that mid-market funds delivered a net IRR of 17% since inception to the end of 2020.
Europe’s Engine for Growth shows the mid-market’s financial commitment to the economy with €34 billion invested across 841 companies in 2020, the seventh consecutive year of investment value growth, as firms continued their strong support of businesses throughout the pandemic. Over the five years from 2016-2020, mid-market private equity raised a total of €137 billion to invest in mid-sized companies, up from €83 billion over the period from 2011-2015, providing significant capital to further aid Europe’s recovery.
Europe’s mid-market plays an essential role in European society through employment across the continent. In 2020, companies backed by mid-market firms employed some 3 million workers – more than the entire population of Lithuania – and created jobs at a rate of 6.4%, outperforming the 0.9% seen in Europe as a whole.
Eric de Montgolfier, CEO of Invest Europe, said:

• “The European mid-market is where the rubber meets the road in European private equity’s value creation chain: funds take entrepreneurial companies and set them on the path to being European and global success stories.
• “Across Europe, mid-market private equity funds are creating jobs, driving innovation, and championing sustainability.
• “Mid-market funds are delivering superior returns that support European pensioners and savers.”

The report draws on real-life case studies to showcase how private equity improves business performance and applies higher ESG standards to deliver social and environmental benefits.
The segment is also an important supporter of innovation and digitalisation trends – creating a more competitive Europe. For instance, investment in ICT (information and communications technology) rose from 18% of all mid-market capital invested in 2016 to 37% in 2020.

Invest Europe, the association representing Europe’s private equity, venture capital, and infrastructure sectors, as well as their investors, will develop a coherent standard for how private equity and venture capital firms should report on environmental, social and governance (ESG) issues – bringing harmonisation and transparency to essential ESG reporting for investors and regulators.

The new reporting standard will be developed and established by summer 2022, and will enable private equity firms to navigate and comply with the rising demands for action and openness on their ESG activities.

In 2021, a wide range of new ESG-related regulatory reporting requirements were set globally, regionally and nationally, including the EU’s Sustainable Finance Disclosure Regulation. In parallel, a range of privately-led initiatives – both commercially and non-commercially driven – were developed. Some of these respond to regulatory standards, while others are tailored to meet the demands of institutional investors.

Eric de Montgolfier, CEO, Invest Europe, said:

• “The proliferation of ESG reporting requirements places a heavy burden on European private equity managers, many of which are spending too much time on developing templates and reporting, rather than focusing on delivering tangible ESG results across their firms and within portfolio companies.
• “By creating a standard for ESG reporting, Invest Europe will provide transparency, clarity and harmony to this space – benefiting firms, their investors and stakeholders more broadly.”

The move to develop a reporting standard for the European private equity and venture capital industry reflects Invest Europe’s strategy to position itself as a leader on ESG, and to showcase the benefits that the industry continues to contribute to society and the environment.

In November 2021, Invest Europe published its Climate Ambition, in which it committed to actively support the 2050 goals set out in the Paris Climate Accords. One of the workstreams needed to fulfill that ambition is building and maintaining tools for members and the industry to comply with the rules, and to develop standards that will help the industry move towards net zero.

In parallel, the European Data Cooperative (EDC) will also begin collecting ESG data from the European private equity industry on key performance indicators, including actions related to climate change, female representation in private equity backed companies, and bribery and corruption policies. The EDC is a market-leading database established in partnership with national private equity associations across Europe by Invest Europe. The EDC gathers fundraising, investment, divestment and economic impact data on more than 1,600 European private equity and venture capital firms and their portfolio companies, accounting for 90% of the €754 billion in capital under management in Europe. More information on the ESG data tracking – which will be updated annually – will follow.

Invest Europe’s reporting standard will be developed with the participation of members, representing both LPs and GPs active in Europe, and across the range of private equity segments from local venture capital funds to global buyout groups.

Today saw the publication of the European Capital Requirements package review, implementing into EU law the standards set at international level by the Basel Committee.

Over the past 5 years, banks invested €21 billion into private equity, making up around 5% of the overall capital raised by these funds. Through private equity, banks supported indirectly thousands of businesses across the continent, including start-ups and scale-ups which benefitted from such equity to grow. Yet, banks’ commitments to the asset class remain very low and have decreased by more than 100% compared to other fundraising sources in the past decade.

In that context, Invest Europe welcomes that, for the first time, “investments in private equity” are no longer deemed “high-risk exposures” in the new framework. Moreover, the explicit recognition that long-term exposures (such as those to closed-ended funds) shall never be considered speculative is a long-awaited step towards acknowledging the actual risk of long-term, non-redeemable commitments.

These helpful changes do not mask the fact that the EU’s strict implementation of the Basel standards will lead to a significant increase in capital charges for banks’ equity investments and still does not appropriately capture the actual risk of long-term capital. If amendments to reflect the specificities of European markets are not introduced during upcoming negotiations, the review could further limit banks’ contribution to long-term growth and, more broadly, to the Capital Markets Union objectives.

As the representative of the European private equity community, including banks investing into equity funds, Invest Europe is looking forward to working with the co-legislators to determine how credit institutions can commit some of their capital to long-term funds while maintaining the high prudential standards of the framework. As we pointed out in a recent opinion piece, it is only by appropriately balancing audacity and prudence that institutional investors will be able to overcome tomorrow’s challenges.

For more details on Invest Europe’s position on the prudential reviews, please look at our position paper here.

• Invest Europe commits to contribute to the EU becoming climate-neutral by 2050

Invest Europe, the association representing Europe’s private equity, venture capital, and infrastructure sectors, as well as their investors, has decided on its climate ambition. The mission statement will serve as clear guiding principles for its work, both internally and externally, in the years to come.

As the representative organisation for an industry that has an unparalleled skillset in long-term financing of transitions, delivering change management and strategic direction, Invest Europe is uniquely placed to play a meaningful and positive role in achieving the climate neutrality goals set out by the EU and by global partners in the Paris Accord. Hence, Invest Europe commits to actively contribute to the EU becoming climate-neutral by 2050.

Invest Europe, as an association, also pledges to take the necessary steps to become a carbon-neutral organisation by 2030.

In order to achieve the mission statement’s ambitious aspirations, Invest Europe will continue to deploy a comprehensive strategy focused on five key areas:

1. Participate in the public policy debate on sustainable finance;
2. Engage constructively with stakeholders on climate neutrality;
3. Deliver education and training aimed at promoting sustainability in private equity;
4. Provide a platform for the industry to share insight, best practice, and knowledge;
5. Remain a thought-leader, guiding the industry and raising the bar with initiatives aimed at meeting climate responsibilities.

This integrated approach represents Invest Europe’s commitment to broaden the scope of its support, resources, and tools provided to its members so that the industry can „walk the talk“.

Eric de Montgolfier, CEO, Invest Europe, commented:

• “Climate change is one of the greatest threats to the planet and its people and private equity can play a critical role in meeting this challenge.
• “Not only must our industry help tackle emissions, but it also has an opportunity to support new technologies that can lead to a greener, more sustainable world.”

Invest Europe published its second Climate Change Guide earlier this year, giving members guidance on integrating climate considerations into investment decisions and engaging with portfolio companies on climate change issues. Further guides are planned to give managers and investors more detailed and practical information in playing their part in a sustainable future.

To read our Climate Ambition Statement in full, please click here.

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The European Commission published today a series of proposals designed to implement the Capital Markets Union (CMU) Action Plan. Among these are the fund management reviews of the Alternative Investment Fund Managers Directive (AIFMD) and the European Long-Term Investment Fund (ELTIF) Regulation, as well as of the European Single Access Point (ESAP) Omnibus.

Today’s CMU proposals demonstrate the crucial role asset managers, such as private equity and venture capital managers, play in the financing of the European economy, by acting as bridge between investors and businesses. While investors committed more than €100 billion of capital in private equity in 2020, private equity backed companies represent more than €10 million employees.

Invest Europe, the association representing the European private equity industry, welcomes the targeted nature of the AIFMD review, which only focuses on areas related to delegation, loan-origination, and some reporting aspects of the Directive.

Martin Bresson, Director of Public Affairs at Invest Europe, commented: “The limited scope of the review is a clear confirmation that the current regulatory structure, which has withstood many crises since its inception, is to a very large extent appropriate. On this backdrop, we appreciate that the European Commission has taken the “if not broken – don’t mend” approach. That being said, there are a few blemishes that we will aim to assist the co-legislators in addressing as negotiations on the file will move forward”.

Next to the AIFMD, the revision of the ELTIF framework has the potential to drive new managers’ interest into this EU voluntary label which allows long-term AIF managers to market to retail clients. Amendments introduced to the proposal will make it easier for managers to set up ELTIF fund-of-funds and to market ELTIFs in a broader range of jurisdictions. Changes to the conflict of interest and diversification rules are also likely to increase the attractiveness of the regime.

“This CMU package of initiatives is by and large a step in the right direction,” says Martin Bresson. “Even on more controversial amendments, the private equity industry’s concerns and specificities have so far been taken into consideration. We can definitely see this as a recognition of the role our industry can – and will – play in the twin transitions Europe needs”.

Launching on 25^th November, ‘A Different Angle’ is an online branded film series exploring the role of private equity and venture capital in European society. This series, presented by Invest Europe, the world’s largest association of private capital providers, and produced by BBC StoryWorks Commercial Productions, brings to screen the human stories at the heart of the businesses that are driving change and fuelling growth through private capital.

Most people come into contact with a product or service from a company backed by private equity or venture capital every single day. Many of the brands we love, services we rely upon, and companies we work for benefit from private equity expertise and capital to enable them to flourish and meet our needs. Yet the industry’s contribution to jobs, innovation, funding better retirements, and driving positive societal change can be often overlooked or misunderstood.

A Different Angle aims to improve the understanding of private equity and venture capital, demystifying the virtuous circle of investing that supports our pensions and savings while exploring the true nature of innovation in Europe. It will also raise awareness about the expertise injected into businesses alongside capital, and how profit and purpose, such as high social and environmental goals, can work in harmony to produce better returns for investors and society.

Through powerful human stories, rather than a focus on mere data and figures, A Different Angle shines a light on the private equity industry and the businesses that are making a difference. The films within the series will explore the topics of pensions and savings, Environmental, Social, and Governance (ESG) criteria, employment and job creation, and Europe’s next unicorns. Crossing the continent, the films showcase a range of inspiring stories, from solutions for beekeepers to non-invasive healthcare headsets to combat a range of health issues.

Within the series, leaders like Coller Capital, Cinven, EQT, European Investment Fund, IQ Capital, and Mid-Europa Partners have contributed with their commitment and expertise to show how the companies they support innovate, create jobs, and improve our lives.

Simon Shelley, vice president of BBC StoryWorks Programme Partnerships, said: “Private equity and venture capital are ubiquitous but not often understood. This series seeks to demystify private equity and how it can generate positive returns not just for shareholders but for society as a whole. We’re thrilled to be working with Invest Europe to tell important stories from a variety of settings across Europe about job creation, responsible investing, and innovation.

Eric de Montgolfier, CEO of Invest Europe, commented: “Private equity and venture capital are deeply ingrained into the fabric of Europe. Across the continent, this industry is building better businesses that are helping support security in retirement for millions of pensioners, while fuelling innovation, creating jobs, and driving advances in sustainability. We are delighted BBC StoryWorks is producing these films for Invest Europe and bringing these stories to life.

You can explore the full series at www.bbc.com/storyworks/a-different-angle/home and https://www.investeurope.eu/about-private-equity/a-different-angle/ (U.K. viewers can only access the latter) and join the conversation online with #ADifferentAngle.

Last week the European Commission published its draft General Block Exemption Regulation and opened a consultation calling for stakeholders to comment on its proposal.

The Commission Regulation is an important component of the EU State Aid Framework as it defines the conditions under which Member States are authorised to grant public support without infringing EU competition law. It is especially relevant from a private equity perspective as it specifies when risk finance aid can be granted to national venture and growth funds or the companies they support.

Overall, Invest Europe broadly supported the proposed new Regulation as it will continue to foster the development of a venture capital ecosystem across the continent. Martin Bresson, Director of Public Affairs, said of the draft text: “We are pleased that the European Commission has taken into consideration our concerns regarding the maximum age a company can reach to remain eligible under the framework. The now double threshold – 7 years from first commercial sale or 10 years from registration – will introduce additional flexibility for scale-ups and companies active in tech-intensive sectors”.

Invest Europe however remains concerned that no changes have been made to the definition of undertakings in difficulty, which has shown during the Covid pandemic to be too narrow to take into consideration the specificities of long-term commitments made by buyout funds.

As it did for the recent review of the Risk Finance Guidelines, Invest Europe will mobilise its State Aid Task Force and will put at the disposal of the European Commission the expertise of its members on the changes made to the existing framework.

Want to join the Invest Europe State Aid Task Force ? Contact us here.

• VC investment volumes in 3.5 months after outbreak remained in line with prior years
• Investment into healthcare start-ups increased by 77% during COVID disruption

Invest Europe, in partnership with the European Investment Fund (EIF), today published ‘The VC Factor – Pandemic Edition’, a new report illustrating European venture capital’s continued strong support for innovative and fast-growing start-ups in the immediate aftermath of the COVID-19 pandemic in 2020.

The study is the second edition of the ground-breaking collaboration between Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, and the EIF – Europe’s largest investor in venture capital funds. It draws on data from 2,611 firms investing into VC and 32,114 start-ups between 2007 and 2020. The findings show that the volume of VC investment during the three and a half months following the onset of the pandemic in March 2020 was in line with the two prior years, despite lockdowns and travel restrictions that meant fewer investments and reduced deal flow for VCs.

The report shows that the number of investments by VCs reduced by 13.6% between March 11, 2020 – the date on which the World Health Organization declared the COVID-19 outbreak a pandemic – and the end of the second quarter. The decline was offset by a 19.3% increase in the average amounts invested into companies, as VC firms continued to back the start-ups driving European innovation and laying the foundation for a better tomorrow.

The European healthcare sector stood out during the period with a 77% increase in investment volumes, reflecting VCs enhanced focus on biotech companies developing potential vaccines and treatments for COVID-19, as well as start-ups committed to improving healthcare for European citizens more widely.

The findings of the VC Factor echo Invest Europe’s flagship report ‘Investing in Europe: Private Equity activity 2020’, which showed that venture capital investment in Europe grew for the eighth consecutive year to €12 billion in 2020, underlining the industry’s resilience despite physical restrictions on people and businesses, as well as intense economic turbulence.

Alain Godard, chief executive of the EIF, said: “Total VC investment volumes did not decrease immediately after the outbreak of the pandemic, despite reduced deal activity exacerbated by lockdowns. Indeed, healthcare investment saw a 77% increase as VCs targeted companies making a difference in this critical sector. The research shows that European VCs were able to adapt quickly to the situation and finish the year strongly, channeling investment into start-ups working at the cutting edge of health and technology.”

Eric de Montgolfier, CEO of Invest Europe, commented: “European venture capital did not escape the effects of COVID-19 but responded with characteristic strength. Across the continent, VCs continued to invest in disruptive technologies as well as life-changing biotech and healthcare innovations. Europe is packed with entrepreneurial talent and venture capital is crucial to a strong recovery from the effects of COVID-19, as well as essential to a brighter long-term future for all Europe’s citizens.”

The latest VC Factor report also shines a new light on where Europe’s venture capital managers are based and where they invest, illustrating that VC firms tend to cluster together much more than their investee companies. The top 12 hubs in Europe represent 61% of the investment capital deployed but only 40% of investment received.

London, Europe’s largest venture hub, accounts for 23% of money invested and 12% of capital received. It is followed by Paris, which is the source of 15% of capital invested while receiving 7% of venture capital deployed. As a proportion of GDP, however, Berlin is the largest VC hub in Europe, followed by East Anglia in the UK where investment is focused on innovation emerging from leading university Cambridge.

To read the VC Factor in full, please click here.

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The European Commission published today its proposal to revise the Solvency Directive, which sets common rules for the risk management and supervision of insurance companies in the European Union. This revision paves the way towards reducing undue costs and barriers that still apply to insurers seeking to invest equity directly or indirectly into long-term projects.

Over the past 5 years, insurance undertakings invested €45 billion into private equity, making up around 9% of the overall capital raised by these funds. Insurers, which are long-term investors by nature, supported thousands of businesses across the continent by committing capital into private equity funds. Yet, insurers’ investment in equities remains extremely low – with an asset allocation in equity funds of only 3,3% (0,6% in private equity) according to the most recent EIOPA statistics.

Changes to the criteria defining the long-term equities category, which will be part of the announced review of the Delegated Regulation, offer a perfect opportunity to better acknowledge the way insurers hold long-term assets and to incentivise them to set up long-term portfolios. Seizing the high potential for improvement could ultimately drive the insurers’ ability to support businesses by investing into venture and private equity funds.

As the representative of the European private equity community, including both fund managers and investors into these funds, Invest Europe is looking forward to working with the co-legislators to ensure insurance undertakings are in a position to commit some of their capital to long-term equity funds while maintaining the high prudential standards of the framework.

For more details on Invest Europe’s position on the review, please look at our position paper here.

• The European Union Intellectual Property Office (EUIPO) and Invest Europe, the world’s largest association of private capital providers, have signed a collaboration agreement to promote and encourage activities and services that support small and medium-sized enterprises (SMEs).

As part of the EUIPO’s plan to create a network under the ‘Ideas Powered for business’ brand and to develop synergies among organisations in close contact with SMEs, this agreement brings a sector to the fore that is an essential funding source for businesses of all sizes.

Invest Europe represents the private equity community across Europe, including venture capital, infrastructure investment firms and extensive professional investors, including pension funds and insurance groups. In 2020, private equity invested €88 billion in 8,163 companies, 85% of which were SMEs.

Both the EUIPO and Invest Europe share similar objectives; to help the European economy recover and to stimulate growth through better understanding and use of private equity and intellectual property (IP). A recent study has shown that SMEs with IP rights (trade marks, patents, designs, etc.) report 68% higher revenue per employee than those without. Among other activities, the collaboration includes promoting joint events for investors and SMEs to facilitate investment opportunities and highlight how IP can boost business growth.

• European Buy-Outs delivered 15.06% IRR, beating MSCI Europe index return of 5.48%
• European VC returned 11.09% IRR vs. MSCI Europe index return of 7.82%
• European Growth Capital funds generated 13.66% IRR vs. MSCI Europe (6.40%) and S&P Europe Small Cap Growth index (11.84%)

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘The Performance of European Private Equity Benchmark Report 2020’, a transparent study of private equity returns. The findings show that European private equity strongly outperformed listed equity benchmarks to the end of 2020, underlining the industry’s resilience during the COVID-19 crisis and its consistent ability to support the long-term investors that guarantee the pensions and savings of European citizens.

The Benchmark Report 2020 tracks Buy-Out, Growth Capital and Venture Capital funds over more than three decades to create a comprehensive picture of industry performance. The data shows that European Buy-Outs, the largest segment in the study, delivered an annualised return of 15.06% since inception to end-2020, far ahead of the 5.48% achieved by the MSCI Europe index over the same period. Within the segment, mid-market Buy-Outs that support, help develop and professionalise medium-sized European businesses across the continent, generated an annualised return of 17.01%, beating the listed equities benchmark by 994 basis points.

The data underlines European Buy-Out funds’ consistently high performance, delivering IRRs between 13.00% and 15.50% over periods of 10 years and longer, the timeframes that help long-term investors – such as pension funds and insurers – to deliver better retirements and savings for millions of Europeans. Furthermore, European Buy-Outs perform consistently and in line with their North American peers, while delivering returns ahead of funds from the rest of the world.

Eric de Montgolfier, CEO of Invest Europe, commented: “Over the very long timeframes that matter to pension funds and insurers, European private equity far outperforms listed equities. Moreover, the data underlines European private equity’s resilience in 2020 as efforts to protect companies through the depths of the crisis paid off. This industry consistently delivers the performance that investors need, while supporting the businesses that underpin Europe’s economy and society.”

European Venture Capital and Growth Capital funds clearly beat equity benchmarks to the end of 2020, as funds backing SMEs, start-ups and scale-ups generated strong performance. Venture Capital funds delivered an 11.09% return since inception versus 7.82% for the MSCI Europe index over the same period, whilst Growth Capital funds generated an IRR of 13.66% against 6.40% for their benchmark.

Returns for Venture Capital funds in particular have accelerated as the industry has matured and demonstrated its ability to rival Silicon Valley for supporting innovation and entrepreneurial start-ups. European VC returned 21.90% over five years to end-2020 and 19.70% over 10 years, beating North American funds that delivered 15.51% and 18.50% respectively. Further evidence of the growing strength of VC in Europe is the 1.97x MOIC achieved in this years’ report, an indication of strong cash returns on a par with the 2.03x seen for North American funds.

Performance overall of European private equity improved in 2020, with private equity firms supporting their portfolio companies through the crisis. These efforts led, in fact, to a widening of outperformance over listed indices, and a reduction in the number of loss-making funds (as well as a reduction in levels of losses seen).

The findings echo the resilience displayed in Invest Europe’s recent Investing in Europe: Private Equity Activity 2020 report which showed it was the second-best year for investment and one of the strongest on record for fundraising.

‘The Performance of European Private Equity Benchmark Report 2020’ is available to Invest Europe members. To request a copy of the report, please email info@investeurope.eu.

• Klaus Hommels of Lakestar named as Chair-elect for 2021-2022

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today announced that Anne Fossemalle, Director, Equity Funds at the European Bank for Reconstruction and Development (EBRD), has assumed the role of chair for 2021-2022, taking over from Thierry Baudon, Founder and Chairman Emeritus, Mid Europa Partners.

Anne has over 25 years of private equity experience and holds numerous Supervisory Board and Investment Committee memberships with major fund managers within the EBRD geography. Anne joined the EBRD in 1993 from Natixis and has worked in several capacities prior to heading Equity Funds, notably leading EBRD’s debt and direct equity investments into financial institutions.

Anne holds Masters degrees from Stanford University, Ecole Nationale du Génie Rural, des Eaux et des Forêts (France) and Institut National Agronomique Paris-Grignon (France).

With Anne’s guidance, and under the leadership of Eric de Montgolfier, CEO of Invest Europe, the association will continue to demonstrate private equity’s position as a cornerstone of Europe’s economy and society, 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% of Europe’s active workforce and is on a par with the entire population of Sweden.

In 2020, European private equity stepped up to the mark and invested €88 billion into over 8,000 companies across the continent. In the midst of intense turbulence, investment was 12% lower than the record deployment of 2019, but nevertheless the second highest total on record.

Capital flowed into every region and into core sectors that target digital growth, consumption and long-term health: ICT accounted for 37% of investment; consumer goods & services a further 19%; and biotech & healthcare 15%. Private equity firms helped portfolio companies through the crisis with follow-on equity investments totalling €26 billion in 2020.

Private equity’s ability to provide strong returns on investment for long-term investors, namely pension funds and insurers seeking to grow savers’ and pensioners’ contributions, was also in full evidence. Fundraising reached €101 billion in 2020, again lower than 2019’s pre-pandemic record, yet the third-year in a row that the industry has secured over €100 billion from long-term investors. That takes fundraising for the last five years to €500 billion, providing abundant capital to support existing European portfolio companies, while identifying and backing new, attractive investment opportunities.

As Chair, Anne will be supported by Invest Europe’s board of directors, including the new appointments of Tom Allen (Advent), Frans Tieleman (Eurazeo), Louis Flamand (Metlife) and Klaus Hommels (Lakestar) who has also been appointed Chair-elect for 2021-2022. Meanwhile, Max Römer, Quadriga Capital, has agreed to remain as Treasurer for another year.

• Private equity backed companies add over 254,000 jobs in 2019, 5.5% employment growth
• Businesses benefitting from PE investment employ 10.2m people across Europe

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its ‘Private Equity at Work’ report. The research shows an industry that is a cornerstone of Europe’s economy and society, 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% 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% on the previous year and far outstrips the average job growth of 0.9% 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,” said 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% more jobs in 2019, followed by Biotech & Healthcare and Energy & Environment, both growing by 6%. 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% 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% 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% for the year, with almost one in ten graduating to a higher business size category.

The report marks Invest Europe’s second exhaustive study of private equity’s role in employment in Europe and captures an expanded group of companies. Over time, this data will expand to create a comprehensive picture of private equity’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

• €88 billion of equity invested in over 8,000 European companies in 2020
• €101 billion in new capital raised, taking five-year fundraising to €500 billion

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Investing in Europe: Private Equity Activity 2020’ – the most comprehensive and authoritative source of fundraising and investment data, covering over 1,600 firms in 2020. The report shows resilient private equity activity in 2020 in the face of the COVID-19 pandemic, with the second highest investment level on record, and fundraising over €100 billion for the third year running.

Despite severe disruption and market uncertainty, European private equity invested €88 billion in 2020, 12% less than the record €100 billion invested in 2019, yet still 18% above the average of the previous five years. A total of 8,163 companies received investment, 85% of which were small and medium-sized enterprises (SMEs), Europe’s engine for growth and recovery from the COVID-19 crisis.

The majority of private equity capital flowed into core sectors that target digital growth, consumption and long-term health: ICT accounted for 37% of investment; consumer goods & services a further 19%; and biotech & healthcare 15%. For more than half of European companies invested by the industry during the year, the 2020 investment was a follow-on.

Fundraising reached €101 billion in 2020, also 12% lower than the record €114 billion of 2019, but similarly well above the long-term average. The capital raised takes fundraising for the last five years to €500 billion, providing abundant firepower to support existing European portfolio companies, while identifying and backing new attractive investment opportunities.

Pension funds and insurers committed 39% of funds raised in 2020, underlining the asset class’s contribution to the pensions and savings of European citizens and beyond. More than 40% of capital came from investors outside the region, rising to almost 55% when focusing on fundraising for buyouts.

“Private equity is a long-term asset class. That is what makes it so resilient and such an important cornerstone of the European economy and society. Private equity is already investing significantly in the recovery, providing investment and support that will help companies – and their employees – rebound, adapt and prosper as Europe emerges from the crisis”, said Eric de Montgolfier, CEO, Invest Europe.

Venture capital investment recorded its eighth successive year of growth, reaching €12 billion, while the growth segment posted its second-best year with €14.5 billion invested. Together they accounted for almost 6,900 companies backed.

Investor capital is perfectly aligned with the trend. The venture capital and growth segments both raised €15 billion in 2020 – the best-ever year for growth and the second-best year for VC. That capital will mean more firepower for innovation, growth and the SMEs that are the backbone of the economy as Europe rebuilds following the pandemic.

The data in ‘Investing in Europe: Private Equity Activity 2020’ records the step change in European private equity. Funds are raising and investing more capital on average than at any point in the industry’s history, including the years preceding the financial crisis. Coupled with Invest Europe’s other landmark reports, including “The Performance of European Private Equity Benchmark Report 2019”, and “Private Equity at Work”, the association’s research demonstrates European private equity’s growing contribution to the European economy and society – in terms of investment, financial performance and job creation.

Download the full report here.

On 29 April 2021, business and individual investors organisations – namely Invest Europe, BETTER FINANCE, ecoDa, European Family Businesses, EuropeanIssuers, Federation of European Securities Exchanges (FESE), and SMEUnited – sent a joint letter to the European Commission to convey their shared concerns regarding the upcoming proposal on sustainable corporate governance.

The signing organisations:

• support the concept of sustainable corporate governance as a means to reconcile economic growth, social progress and environmental protection;
• acknowledge the aim of encouraging boards to consider their relevant stakeholders as having intrinsic value for decision-making in the best interest of the company over time;
• encourage the Commission to further pursue strengthening shareholders’ active participation in the governance of companies.

However the signatories:

• consider that the two topics of due diligence and corporate governance should be treated separately, and that the European Commission should avoid an oversimplified, one-size-fits-all approach;
• observe that taking into consideration many interests is a natural part of directors’ duties, and that principles related to this are already included in many corporate governance codes;
• consider that an EU initiative in this area that goes beyond the form of recommendations would be counterproductive;
• envisage that, if introduced, such a move would paralyse the functioning of the board and, in turn, hamper the ability of companies to act decisively to promote a sustainable transition.

Most shareholders have a long-term vision, whether it concerns the shareholdings of family businesses, public or private equity, or end-investors. One focus for enhancing sustainable corporate governance should therefore be to strengthen the long-term engagement of shareholders and investors (including individual shareholders).

As different companies cannot all be managed the same way, developments related to sustainable corporate governance would best come within the existing framework of codes. This way, companies are provided with useful guidance on governance, while allowing shareholders to decide on the best way forward.

As for listed companies, the signatories wish also to highlight that too many restrictions may increase reluctance to use public markets for financing. In this respect, further restrictions in this regard would risk conflicting with the objectives of the Capital Markets Union.

All signing organisations agree that the European Commission should take the time to develop a fully comprehensive analysis which can form the basis of an initiative that is appropriate for all EU27 jurisdictions.

• EU convergence and ownership transition among trends fuelling PE investment in CEE
• 22 companies analysed in detail, including cybersecurity and stem cell research leaders

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Private Equity in CEE: Creating Value and Continued Growth’, an in-depth study of private equity’s role in innovation and economic development across Central and Eastern Europe.

The report, whose work was led by Invest Europe’s CEE Taskforce, investigates the ongoing convergence of CEE countries with other EU regions and the investment trends that have enabled private equity to be a positive force in the region’s progress. It also highlights the industry’s role in innovation and raising ESG standards. These themes are brought to life through detailed case studies of companies backed and fully exited by private equity investors during 2015-2019.

Private equity is intertwined in the CEE landscape, investing €19 billion in almost 3,200 CEE companies between 2010 and 2019. The industry is also a significant employer and source of new jobs across the region. Private equity-backed businesses employed over 316,000 workers at the end of 2018, with companies supported by Invest Europe members increasing employment by 10.7% for the year, far ahead of the 0.7% achieved by all CEE business and outstripping all other European regions.

“Central and Eastern Europe is the fastest-growing region of Europe and presents a wealth of investment opportunities as it converges with the rest of the EU. Private equity is a valuable source of funding for businesses and plays a central role in helping companies professionalise their processes, grow and enter new markets,” said Eric de Montgolfier, CEO, Invest Europe.

Thierry Baudon, Invest Europe Chair, added: “Having spent three decades investing in Central and Eastern Europe, I have seen first-hand the entrepreneurial ideas and ambitious businesses being created across the region. With private equity backing, these companies are not only becoming world-class businesses, but are also creating jobs, improving ESG practices and driving economic growth, while at the same time delivering strong returns for investors.”

Private Equity in CEE analyses 22 companies in detail, including Bitdefender, a Romanian cybersecurity start-up that protected over 30,000 ransomware victims and helped take down one of the largest criminal dark web markets. The report also details the growth of PBKM, Europe’s leading stem cell bank, based in Poland, which increased employee numbers more than ten-fold to 339 over seven years, as well as Estonian aircraft maintenance group Magnetic MRO that entered 12 new markets under private equity ownership.

The report also identifies some of the more recent exits that have helped contribute to CEE’s success in 2020, as well as fast-growing tech companies that are helping fuel the region’s recovery from the COVID-19 crisis, including Czech cloud messaging platform Infobip and Lithuanian second-hand clothes marketplace Vinted.

It addresses the major themes influencing the investment landscape, including the catch-up in wealth between CEE economies and those in the rest of the EU, the transition from founder ownership to a professional governance structure, consolidation, and the improvement in company management and practices. It also highlights the cost advantages and high-skilled workforces available in the region.

In parallel with the publication of the report, Invest Europe will host a webinar on private equity’s role in CEE and opportunities for investment across the region on 11 February 2021 at 17:00 CET. The virtual event will involve discussion of the major themes and insight from:

Thierry Baudon, Chair, Invest Europe & Founder, Mid Europa Partners

Anne Fossemalle, Chair-Elect, Invest Europe & Director, Private Equity Funds, European Bank for Reconstruction and Development (EBRD)
William Watson, Head of the Invest Europe CEE Taskforce & Managing Partner, Value4Capital

For more information and to register for the webinar, please click here.

Today the European Securities Markets Authority (ESMA) and the UK Financial Conduct Authority (FCA) published a Multilateral Memorandum of Understanding (MMoU) on the consultation, cooperation and the exchange of information between each of the EEA competent authorities and the FCA.

Invest Europe and the British Private Equity & Venture Capital Association (BVCA) jointly welcome the commitment made by UK and EU competent authorities to cooperate and exchange information in the future. As we have stated in our mutually agreed position, the private equity and venture capital industry is global in its approach to fundraising, sourcing new deals, working and investing. A coherent approach to our sectors’ regulatory environment, particularly across the British Channel, is therefore fundamental.

As such we find it opportune that the MMoU, which covers entities such as asset management companies, including private equity and venture capital firms, will not supersede applicable legislation and will not limit the use of existing mechanisms of crucial importance to our inherently cross-border industry.

Eric de Montgolfier, Invest Europe CEO, stressed that “close coordination between competent authorities and, ultimately, consistent supervision is needed to ensure that private equity and venture capital managers on both sides of the Channel remain able to operate cross-border, including by using delegation arrangements as is permitted under Article 20 AIFMD”. Michael Moore, the BVCA Director-General, noted “cross-border arrangements, including advisory and delegation arrangements, facilitate fund managers’ and investors’ access to relevant investment professionals and portfolio management expertise. These arrangements remain very important for the private equity and venture capital industry, which operates on a cross-border basis”.

Invest Europe and the BVCA will remain at the disposal of national competent authorities and ESMA in case they wish to receive any further information about the way our industry operates.

The MMoU is available here​.

• Private equity raises €49 billion in H1 2020, in line with prior year
• H1 investment totals €36 billion as firms target activity to strengthen companies

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘Investing in Europe: Private Equity Activity H1 2020’, a comprehensive report on private equity activity in Europe during the first half of the year. The report reveals a resilient investment and fundraising environment, as investors and fund managers continue to actively invest in European businesses despite the disruption caused by COVID-19.

Private equity funds raised €49 billion in the first half of 2020, in line with last year’s first half figure, putting the industry on track to raise a full-year total on a par with average fundraising level achieved over the last three years.

Over the same six month period, private equity funds invested €36 billion and backed 3,401 companies, with about 60% of investment value going into follow-on investments, as the industry supported its businesses through the intense liquidity crisis caused by the introduction of economic lockdown measures across Europe.

The figures also highlighted the industry’s continued focus on innovation as investments in ICT and biotech & healthcare accounted for over half of capital invested. In addition, venture capital investment achieved a new half-year record with €5.6 billion invested into innovative start-ups and scale-ups. Overall private equity investment was 17% lower in value as tougher trading conditions and worsening outlooks impacted investment.

“European private equity has demonstrated its adaptability through the crisis caused by ongoing pandemic, supporting existing portfolio companies as and when needed, while continuing to invest in new businesses that require capital and operational expertise to grow,” said Eric de Montgolfier, CEO, Invest Europe.

He added: “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.”

Following on from its first half activity data report, Invest Europe in collaboration with Arthur D. Little, the international management consulting firm, is preparing to launch the first edition of a report based on a pan-European, forward-looking survey, that captures views from private equity managers and investors on the future of the industry in the context of the COVID-19 pandemic.

The report, which will be released during a webinar hosted by Invest Europe and Arthur D. Little later this month, assesses the impact of COVID-19 on private equity and venture capital but also finds that about 60% of managers and investors expect capital allocations to private equity to rise over the next three years. In addition, a majority expect stronger investment opportunities over the coming 12 months compared to 2019 and believe that ICT, biotech & healthcare and business services will be important areas for investment in the future.

To read the Invest Europe H1 private equity activity report, please click here. To find out more and sign up to the webinar on the pan-European private equity survey, please email us here.

• European buy-outs delivered an IRR of 15.00%, beating MSCI Europe index return of 5.84%
• European VC returns an IRR of 16.79% over a 10-year horizon, close to that of North American funds

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published two new reports demonstrating private equity’s long-term outperformance of public equities. The data shows that European buy-outs delivered an annualised net IRR of 15.00% since inception to end-2019, far ahead of the 5.84% achieved by the MSCI Europe, while growth investments and venture capital also clearly beat equities benchmarks.

The research comes from two Invest Europe publications: the first, ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ compares a range of performance metrics to determine their relative strengths and weaknesses, while the second, ‘The Performance of European Private Equity Benchmark Report 2019’, records private equity performance over the last four decades.

With the publication of these reports, Invest Europe is putting private equity performance under a new lens, comparing like-with-like to create a transparent and fair account of private equity performance and its contribution to investors.

Eric de Montgolfier, CEO of Invest Europe, commented: “As the private equity industry has matured, it has become clear to fund managers and investors alike that traditional measures for comparing private equity investments with listed equities are perfectible. With the publication of these two reports, Invest Europe is demonstrating European private equity’s clear outperformance while supporting the drive to more consistent and robust performance metrics that can enable investors to compare assets more easily.”

Invest Europe’s report on benchmarking public and private markets investments analyses the different metrics available for measuring private equity fund performance. It identifies the strengths and weaknesses of the internal rate of return (IRR), multiple of invested capital (MOIC) and public market equivalent (PME).

The report identifies the modified public market equivalent (mPME), one of the second-generation PME metrics developed by investment advisory firm Cambridge Associates, as an additional and sophisticated tool for assessing private equity performance. mPME enables investors to take account of the effect of holding periods on investment performance and separate the intrinsic performance of the fund manager from the general evolution of markets. It also helps address the challenge of assessing the performance of active funds, that are conservatively valued during their lifetimes, against public equities.

Invest Europe’s performance report measures European private equity returns against relevant stock market indices, as well as private equity funds from North America and the rest of the world on a range of metrics.

The results show that for time horizons of 10 years and over, European buy-outs have routinely delivered an annualised IRR of between 15.00% and 15.50% net of fees, while mid-sized buy-outs generated the best returns of 16.65% over the long term and outperformed the MSCI Europe index by the widest margin.

European venture capital returned a net IRR of 16.79% over a 10-year horizon, performing on a par with North American funds over the same period, while the European growth capital private equity segment performed consistently strongly, generating an annualized IRR of 13.28%, outperforming the MSCI Europe which returned 7.32% over the same timescale.

• European buy-outs delivered an IRR of 15.00%, beating MSCI Europe index return of 5.84%
• European VC returns an IRR of 16.79% over a 10-year horizon, close to that of North American funds

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published two new reports demonstrating private equity’s long-term outperformance of public equities. The data shows that European buy-outs delivered an annualised net IRR of 15.00% since inception to end-2019, far ahead of the 5.84% achieved by the MSCI Europe, while growth investments and venture capital also clearly beat equities benchmarks.

The research comes from two Invest Europe publications: the first, ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ compares a range of performance metrics to determine their relative strengths and weaknesses, while the second, ‘The Performance of European Private Equity Benchmark Report 2019’, records private equity performance over the last four decades.

With the publication of these reports, Invest Europe is putting private equity performance under a new lens, comparing like-with-like to create a transparent and fair account of private equity performance and its contribution to investors.

Eric de Montgolfier, CEO of Invest Europe, commented: “As the private equity industry has matured, it has become clear to fund managers and investors alike that traditional measures for comparing private equity investments with listed equities are perfectible. With the publication of these two reports, Invest Europe is demonstrating European private equity’s clear outperformance while supporting the drive to more consistent and robust performance metrics that can enable investors to compare assets more easily.”

Invest Europe’s report on benchmarking public and private markets investments analyses the different metrics available for measuring private equity fund performance. It identifies the strengths and weaknesses of the internal rate of return (IRR), multiple of invested capital (MOIC) and public market equivalent (PME).

The report identifies the modified public market equivalent (mPME), one of the second-generation PME metrics developed by investment advisory firm Cambridge Associates, as an additional and sophisticated tool for assessing private equity performance. mPME enables investors to take account of the effect of holding periods on investment performance and separate the intrinsic performance of the fund manager from the general evolution of markets. It also helps address the challenge of assessing the performance of active funds, that are conservatively valued during their lifetimes, against public equities.

Invest Europe’s performance report measures European private equity returns against relevant stock market indices, as well as private equity funds from North America and the rest of the world on a range of metrics.

The results show that for time horizons of 10 years and over, European buy-outs have routinely delivered an annualised IRR of between 15.00% and 15.50% net of fees, while mid-sized buy-outs generated the best returns of 16.65% over the long term and outperformed the MSCI Europe index by the widest margin.

European venture capital returned a net IRR of 16.79% over a 10-year horizon, performing on a par with North American funds over the same period, while the European growth capital private equity segment performed consistently strongly, generating an annualized IRR of 13.28%, outperforming the MSCI Europe which returned 7.32% over the same timescale.

‘The Performance of European Private Equity Benchmark Report 2019’ and ‘Benchmarking Public and Private Markets with the Public Market Equivalent (PME)’ are available to Invest Europe members. To request a copy of the reports, please email media@investeurope.eu.

• Private equity backed firms added over 173,000 jobs in 2018, 5.5% employment growth
• First ever report underlines industry’s key role in employment and job creation

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its first ever ‘Private Equity at Work’ report. A total of 10.5 million people were employed at 22,659 private equity backed businesses in Europe at the end of 2018 – the first full year analysed in the research. The figure represents 4.5% of the continent’s active workforce and equates to more than the entire population of Greece.

The research presents a transparent account of European private equity’s record on employment, demonstrating the industry’s commitment to workers and job creation just as businesses across the continent seek to bounce back from the economic impact of the COVID-19 crisis.

The report also highlights the impact of private equity investment and active management on job creation. Companies supported by Invest Europe members created 173,124 net jobs in 2018, more than the number of people passing through Amsterdam Central Station each day. Employment levels at those companies increased by 5.5% in 2018, five times the 1.1% growth achieved by European businesses on average. All stages of private equity created jobs at a higher rate than the European average, ranging from 5% for buyouts to 16% growth for venture capital.

“Invest Europe’s Private Equity at Work demonstrates just how deeply ingrained private equity is in the economic and social fabric of Europe. The industry is a major supporter of employment across the whole continent. Not only do its companies create jobs, but they do it at a much faster rate than the average European business,” said Eric de Montgolfier, CEO of Invest Europe.

De Montgolfier added: “Private equity is an engine for growth. And growth is an engine for job creation. In these challenging times, private equity backed companies are not immune from the unprecedented impact of COVID-19 on the economy. However, the industry’s focus on building better businesses, supporting investors and fuelling innovation, in turn driving growth and job creation, means that private equity has a critical role to play in Europe’s economic recovery.”

The report analyses the industry’s contribution to employment and job creation across every European region and all major industry sectors. Private equity backed businesses incorporated in Ile-de-France employed 1.2 million people, while nearly 3.4 million people worked for companies in the business products and services sector across Europe. Biotech and healthcare were among the best performing industries for job creation, increasing employment by 9.0% in 2018.

The research draws particular attention to private equity’s key role in helping small and medium-sized enterprises (SMEs) employing fewer than 250 staff, the backbone of the European economy, achieve their growth aspirations. A total of 14,500 private equity backed SMEs employed almost 900,000 people across Europe at the end of 2018. These companies increased employment at a rate of 10% in 2018, with over one in ten graduating to a higher business size category.

Invest Europe has started collecting data for future employment and job creation reports, expanding the scope of the study to capture information on more private equity backed companies in Europe. Over time, this data will expand to create a comprehensive picture of private equity’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.

• Investment rises 7% to €2.95bn, VC investment achieves new record

Private equity firms invested in a record 464 companies in Central and Eastern Europe (CEE) in 2019, with investment increasing by 7% year-on-year to €2.95 billion, as the industry strengthened its commitment to the SMEs and start-ups that are fueling the region’s economic growth and innovation, according to Invest Europe data.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today released its 2019 Central and Eastern Europe Private Equity Statistics. The report shows that private equity investment reached the second-highest total ever recorded at €2.95 billion, with the number of companies up 10% on the previous year to a new all-time high. Both figures are well above the previous five-year average for the region.

Venture capital investment doubled to a record €338 million in 2019, with 369 companies receiving VC support. The result followed record VC fundraising over the past three years, underlining the CEE’s booming start-up culture, focused particularly on Hungary and Poland.

Robert Manz, chair of Invest Europe’s Central and Eastern Europe Taskforce, commented: “Since the fall of the Berlin Wall three decades ago, Central and Eastern Europe has undergone a remarkable political and economic transformation. Private equity is proud to have played its part, bringing not only capital, but also the expertise and skills to help drive the region’s successful convergence process.”

Eric de Montgolfier, CEO of Invest Europe, added: “The 2019 Central and Eastern Europe Private Equity Statistics paint the picture of a mature investment ecosystem that still has plenty of room to grow. Across the region, private equity and venture capital is supporting innovation and business expansion, which in turn is driving economic growth and job creation.”

Estonia was the leading destination in terms of investment in 2019, accounting for 23% of the private equity capital invested in the region, followed by Poland (20%) and Romania (19%). About half the investment flowed into the information and communication technology (ICT) sector, aiming to follow in the footsteps of CEE tech leaders including Bucharest-founded business automation software group UiPath and Polish online medical appointment booking system developer DocPlanner.

Fundraising for Central and Eastern European private equity funds was €1.4 billion in 2019, in line with the previous five-year average. At €631 million, venture capital firms accounted for 45% of the capital raised, the second-highest total on record. Buyout funds represented 40% of the total raised, with growth funds accounting for the remaining 15%.

The 2019 Central and Eastern Europe Private Equity Statistics are available to download from Invest Europe’s website, investeurope.eu. Please click here to access the full report.

• Anne Fossemalle of the EBRD named as Chair-elect for 2021-2022

Thierry Baudon, 2019-2020 Chair of Invest Europe, is to continue as Chair, following the sudden and unexpected death of Roderick “Rory” Macmillan (Chair-elect for 2020-2021) last month. Thierry will remain in the role to steer Invest Europe through the challenges ahead and help cement private equity’s critical role in the European economic recovery.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, last month learned of the sad passing of Rory, Managing Director, Global Government Affairs, The Carlyle Group. As Vice-Chair of the Large Private Equity Platform (EPER), and a long-term supporter of Invest Europe, Rory was due to succeed Thierry, former Managing Partner of Mid Europa Partners, in June at the association’s Ordinary General Meeting. Our thoughts remain with Rory’s family and his husband Koen Kleyn.

Thierry Baudon commented: “Rory was a vigorous supporter of invest Europe and a strong voice for the private equity industry. He was passionate about many issues, including ESG and gender, diversity and inclusion. We will honour his memory and contribution by striving to show the private equity industry’s leadership on these matters, as well as many others.”

With Thierry’s ongoing guidance, and under the leadership of Eric de Montgolfier, CEO of Invest Europe, the association will continue to demonstrate private equity’s critical role at the centre of the European economy, safeguarding and bettering the pensions of millions of Europeans, while fueling innovation, feeding entrepreneurship and growing people, companies and ideas where others will not, and dare not.

Total fundraising in Europe in 2019 climbed to €109 billion, the highest total over the past decade, with over two-thirds coming from long-term investors, including pension funds and insurers. In parallel, the total equity amount invested in European companies increased to €94 billion in 2019, the highest level of investment ever recorded. Some 85% of companies backed were small and medium-sized enterprises (SMEs), the engine of the European economy.

As Chair, Thierry will continue to be supported by Invest Europe’s board of directors. Anne Fossemalle of the European Bank for Reconstruction and Development, currently Vice-Chair representing the LP Platform, has been appointed Chair-elect for 2021-2022. Meanwhile, Max Römer, Quadriga Capital, has also agreed to remain as Treasurer for another year.

To read more about Rory Macmillan and his contribution to Invest Europe and the industry, please click here. For more information on Thierry, you can read his biography here.

• 10% annual rise to record high of €94 billion in equity invested in European firms
• Over 2015-2019, more than 22,000 SMEs in Europe backed by private equity and venture capital funds – almost 85% of portfolio companies

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’ – the most comprehensive and authoritative source of fundraising and investment data available, covering over 1,400 firms. The report reveals record levels of private equity fundraising and investment in 2019, underscoring Europe’s attractiveness and unique positioning for the private equity sector.

Total fundraising in Europe in 2019 climbed to €109bn, up 6% from 2018 and the highest total over the past decade. In parallel, the total equity amount invested in European companies increased 10% year-on-year to €94bn in 2019 – the highest level of investment ever recorded – with continued concentration across three sectors: ICT (27%), consumer goods & services (23%) and business products & services (19%).

Small and medium-sized enterprises (SMEs) are the backbone of the European economy and private equity’s overwhelming focus on, and funding of, SMEs reaffirms the sector’s commitment to Europe’s economic engine.

Over the 2015-2019 period, over 22,000 SMEs across Europe have been backed by private equity and venture capital funds, making up almost 85% of the portfolio companies. And the amount committed to private equity funds raising under €1bn over the 2015-2019 period increased by a dramatic 50% – noteworthy given their focus on SMEs and start-ups.

“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,” stated 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 €15 billion in venture capital fundraising in 2019 – a 17% increase over 2018 that also marks the 7th consecutive year of growth.

Venture capital investments more than doubled between 2016 and 2019, with backing for almost 4,700 companies in 2019 alone; examples of innovative sectors backed by venture capital include Biotech/Healthcare and ICT, both of which contribute significantly to the battle against the COVID-19 pandemic. And thanks to an increase in average venture capital fund size since the 2008 financial crisis, venture capital-backed businesses and their investors are better equipped to handle crises.

Pension funds and insurance companies, including Europe’s largest institutional investors, make up some 40% of the private equity funding raised in Europe in the 2015-2019 period, a clear indication of confidence in an asset class that directly contributes to better pensions and returns for Europe’s citizens. Over the same period, pension funds have invested  €114bn in European private equity/venture capital funds – a clear endorsement of their long-term contribution and Europe’s leadership position on Environment, Social and Corporate Governance (ESG).

More than 45% of the private equity capital raised across the continent in 2019 came from non-European investors, led by investors from North America (28%). Ensuring private equity’s contribution to the European economic recovery is supported by private equity and venture capital’s focus on the region, with 63% invested domestically, 29% in another European country and a mere 8% from outside Europe.

By its very nature, private equity has always sought to unlock potential through patient capital and vibrant, active ownership resulting in growth and jobs. These qualities, if supported by adequate liquidity and employment-support measures provided by state aid programmes, will ensure the private equity sector and the 26,000 companies (since 2015) it backs, stand ready to jump-start the European economy. And it will do so in solidarity with the entire coalition of European stakeholders required to overcome the current pandemic.

Download the full report here.

• 90% of VC-backed European start-ups increase revenues, create jobs and deliver innovation
• First large-scale study of EU start-ups, covering 9,000 companies across all EU-28 Member States
  

Invest Europe has teamed up with the European Investment Fund (EIF), the EU’s leading venture capital (VC) investor, to release new research that highlights venture capital’s positive impact on fostering innovation, growth and job creation at start-ups across Europe.

The report entitled The VC Factor: Data-driven insights about VC-backed start-ups in Europe is the result of an ambitious research collaboration between the EIF and Invest Europe, the association representing venture capital, private equity and infrastructure sectors and their investors in Europe. The ground-breaking report tracked and analysed data on almost 9,000 young companies between 2007 and 2015, as well as some €35 billion of VC investment flows, offering new insights into Europe’s burgeoning start-up scene.

“We are delighted to have teamed up with Invest Europe for this data-driven project to analyse venture capital investment and its role as a catalyst for start-up success,” said Helmut Krämer-Eis, EIF’s Chief Economist. “Knowledge is power – and hence we are confident that the new report   increases the understanding of the European VC ecosystem and delivers further proof of the positive impact of venture capital on start-ups.”

“We are thrilled to have worked with the EIF on The VC Factor,” said Invest Europe CEO Eric de Montgolfier. “The research shows that the benefit of venture capital funding for the vast majority of companies is substantial. Receiving VC investment enables them to unleash their full potential, growing further and faster than their peers while also creating new innovations and empowering investors into European VC as an asset class.”

The report acknowledges that not all VC-backed start-ups survive, nor do they always perform as their founders dream. However, over a third of start-ups studied were high performers, generating strong revenue growth, creating significant numbers of jobs and spurring innovation.

Key findings include:

• One in five start-ups were classified as “all-rounders”, generating 141% revenue growth on average and a 54% increase in employee numbers over four years.
• 7% of start-ups were classified as “visionaries”, performing strongly on intellectual property with intangible assets such as patents up by 534%.
• 8% were classified as “superstars”, outperforming on all fronts with revenues growing 358%, intangibles by 340% and staff by 109%.

The VC Factor compared start-ups with VC backing to those without in order to determine the impact of venture investment and expertise. It found that without VC investment, start-up performance would have been significantly poorer across all profiles, while the number of “laggards” that shrink in size would have increased more than threefold. In addition, almost half of high-growth start-ups would have either fallen into a much less successful profile or defaulted in the absence of VC.

The report also made new discoveries about the locations of VC investments. The six largest VC hubs in Europe received one third of all investment activity, led by Ile-de-France, inner London and Berlin. Meanwhile, Nordic start-ups – centred around the fourth-largest hub Stockholm – were the most innovative in terms of new patents and intangible assets. At the same time, emerging start-up hubs are shaking the status quo with 25% of capital deployed into cities with fewer than 100,000 inhabitants.

To read The VC Factor report in full, please click here.

NOTES TO EDITORS

The study highlights successful start-ups such as InFarm, the Berlin-based vertical farming group which is aiming to reduce food miles, Dutch Solynta, a developer of potato seeds that are designed to help developing world growers by being less bulky and perishable than tubers, and Inkitt, a book publishing platform that wants to give aspiring authors a fair chance of success.

• De Montgolfier joins from European investment firm Gimv where he led French operations
• Brings over 30 years’ experience as private equity investment professional to CEO role

Invest Europe has appointed Eric de Montgolfier as new CEO to lead the world’s largest association of private capital providers and investors.

De Montgolfier will take the helm at Invest Europe, the association representing Europe’s private equity, venture capital, infrastructure sectors, as well as their investors by the end of December. A highly-experienced private equity professional, de Montgolfier joins from Brussels-listed investment manager Gimv, where he was Partner and Head of Gimv France, responsible for overseeing investment and group strategy in the market. 

“It is a great honour to be joining Invest Europe as CEO,” de Montgolfier said. “I have enormous respect for the work of the association and its team in Brussels. I look forward to bringing the experience I have gained in over 30 years at private equity firms in Europe to help promote better understanding of the industry and build a better operating environment for our members.”

De Montgolfier succeeds Michael Collins who stepped down as CEO in August after six years with Invest Europe. He joins during an important period for the association as it steps up engagement with new and re-elected policymakers who will set the regulatory agenda for the European Union over the next five years. Invest Europe recently published its Manifesto for 2019-2024, outlining the industry’s key policy priorities for the new European Parliamentary term.

“I am delighted to welcome Eric as the next CEO of Invest Europe,” said Thierry Baudon, Invest Europe Chair. “He is an exceptionally experienced and talented private equity professional who understands the challenges and opportunities the private equity industry faces in Europe today. I look forward to working with Eric and the Invest Europe team to deliver more successes on behalf of all our members.”

Among Invest Europe’s achievements during the last European Parliament was the creation of the VentureEU fund of funds programme, which aims to raise €2.1 billion for investment in dynamic start-ups across the continent. The association also worked on the development of a new long-term equities category under Solvency II, which places a lower capital requirement on private equity and venture capital investments for insurers, and established Invest Week to promote the benefits of private equity and venture capital investment in Europe.

De Montgolfier joined Gimv, the Euronext-listed investment group, as head of its French office in 2015, becoming CEO of Gimv France the following year. During his tenure, he oversaw the repositioning and growth of the mid-market specialist’s operations in France. The move increased the firm’s visibility and deal flow, and resulted in €270 million invested across ten transactions.

Prior to joining Gimv, de Montgolfier spent 11 years as co-founding Managing Partner and COO at Edmond de Rothschild Capital Partners, building a respected name in the French lower mid-market. Before that, he rose through the ranks at French firm Astorg, becoming a founding partner in 1998 when the firm spun off from Suez Group.

De Montgolfier holds a Masters in Management from ESCP Europe (Paris). He has been a Mid-Market Platform Council member of Invest Europe.

• Invest Europe’s Venture Capital Forum takes place in Paris on 16 & 17 October
• Experts to discuss next steps for expanding European VC industry

Investors, VC fund managers and entrepreneurs will meet in Paris next week to discuss how to encourage more investment into Europe’s booming start-up scene in order to create more European champions.

In 2018, European venture capital raised €11.4 billion and invested €8.2 billion into companies, both record amounts for an industry that goes from strength to strength. It was also a stand-out year for exits, as the listings of music streaming market leader Spotify and Dutch payment processor Adyen cemented European VC’s position on the global stage. Activity has continued strongly in 2019 with the recent IPO of Germany’s BionTech, a pioneer in cancer immunotherapy treatments, and the sale of rare diseases specialist Therachon to Pfizer.

To mark the step-change in the industry, Invest Europe, the association representing the European VC industry and its global investors, is returning to Paris for its annual Venture Capital Forum, which will be held at the Verso Conference Centre in the heart of the city on 16 and 17 October. The Venture Capital Forum is for investors and VC fund managers and focuses on how to support an evolving European VC industry that is creating larger funds, making bigger investments and generating improved performance.

The packed programme is designed to encourage knowledge and best practice sharing among industry participants. It includes discussions on hot topics for the VC industry and investors, such as:

• France as a Blueprint for European VC Evolution – With French VC fundraising tripling over the last five years, experts identify the reasons behind the success, as well as the lessons that can be applied to other countries and regions around Europe.
• LPs on VC: Capitalising on the Momentum – A group of experienced investors discuss the evolution of European VC and ways to sustain growth and performance in the future.
• Industry Transformation: Increasing Ticket Sizes and New Models – The debate tackles ways of driving growth equity and other funding sources that can provide later-stage support for European start-ups.

Attendees at the Venture Capital Forum will hear about European VC performance from Uli Grabenwarter, Director for Equity Investments at the European Investment Fund, Europe’s leading VC investor. They will also receive insights into European and US VC trends from Ross Morrison, Partner at Adams Street Partners, one of the world’s oldest private markets investment management services firms.

Pascal Cagni, French Ambassador for International Investment and Chairman of the Board of Business France, and Lionel Assant, Senior Managing Director and European Head of Private Equity at Blackstone, will deliver keynote speeches.

“European venture capital goes from strength to strength,” said Thierry Baudon, Invest Europe’s Chair. “With top companies like Spotify, Adyen and Therachon hitting the headlines, investors are realising this is an opportunity they can’t afford to miss. Ensuring that more investor capital can flow into innovative start-ups to support them throughout their growth journeys is a top priority.”

In addition to informative speeches and panels, Invest Europe’s Venture Capital Forum provides great opportunities for industry networking. During the conference, Invest Europe has organised a number of events to bring investors, fund managers and entrepreneurs together, including the LP/VC Rotating Networking Dinner, and a cocktail reception at the Hôtel de Matignon, hosted by French Prime Minister Édouard Philippe.

For more details on Invest Europe’s Venture Capital Forum, visit the official website.

A limited number of free press passes are available for the event. Members of the press should contact the Invest Europe media team.

Private equity fundraising for Central and Eastern Europe (CEE) hit the highest annual level in a decade in 2018 with €1.8 billion, according to new data from Invest Europe.

Buyout funds in CEE raised €1.1 billion, while the region’s venture capital funds attracted over €500 million for the second year in a row, reveals Invest Europe’s 2018 Central and Eastern Europe Private Equity Statistics report, released today.

Private equity investment into companies across CEE reached €2.7 billion in 2018, the second-highest amount ever achieved, following 2017’s record €3.5 billion. The number of companies backed increased by 50% year-on-year to almost 400, also the second-highest level on record. This was driven by a sharp increase in CEE companies supported by venture capital.

The number of private equity and venture capital-backed exits in CEE reached an all-time high of 128 companies divested in 2018. This represented a total value of over €1 billion for the fifth year running, measured at historical investment cost. Poland accounted for over half of this total exit value with €575 million.

“The strong levels of private equity fundraising, investment and exit activity in Central and Eastern Europe in 2018 demonstrate that the region continues to develop as an attractive investment destination,” said Robert Manz, Chair of Invest Europe’s Central and Eastern Europe Task Force. “Global investors see that private equity and venture capital investment is one of the best ways to access the region’s robust markets and high-growth companies.”

All countries in the CEE region covered by Invest Europe’s report surpassed the European Union’s 2.1% GDP growth rate in 2018, according to data from the International Monetary Fund (IMF). Eight of the countries achieved annual growth above 4%, with Poland, Hungary and Latvia experiencing particularly high growth rates, reaching 5.1%, 4.9% and 4.8% respectively.

Poland saw CEE’s highest amount of private equity investment with its companies receiving €850 million in total last year. The Czech Republic was close behind with €767 million invested into its companies via private equity and venture capital funds. Hungary had the highest number of companies receiving investment with over 190 backed last year, almost half of the regional total.

The biotech and healthcare sector took the highest share of CEE’s private equity investment with 32% of the total value in 2018, while consumer goods and services companies received 27% of funding. The region also has strong technology start-up credentials, including Czech cyber-security group Avast which was 2018’s largest tech initial public offering (IPO) on the London Stock Exchange at a valuation of £2.4 billion. Meanwhile, Romania’s robotic process automation firm UiPath achieved a $7 billion valuation during a funding round earlier this year, making it one of the world’s most valuable artificial intelligence companies.

Invest Europe is the non-profit association representing European private equity, venture capital and their global investors. Its research database is the most robust and authoritative in the industry. The 2018 Central and Eastern Europe Private Equity Statistics report is free to download from the association’s website, investeurope.eu.

• Founder and former Managing Partner of Mid Europa Partners becomes Invest Europe Chair
• Baudon succeeds Nenad Marovac, Founder and CEO of DN Capital

Thierry Baudon, Founder of Mid Europa Partners, has become Chair of Invest Europe, the association representing European private equity, venture capital and their global investors.

Baudon, a representative of Invest Europe’s platform of mid-market private equity fund managers, succeeds Nenad Marovac, Managing Partner and CEO of venture capital firm DN Capital. The appointment is for one year and is effective immediately.

“The European private equity industry goes from strength to strength and I am delighted to have the opportunity to lead Invest Europe over the coming 12 months,” said Baudon. “It will be my priority to make sure that all our members can continue to raise and invest capital as freely as possible, to the benefit of companies across the continent and investors globally.”

European private equity funds raised more than €97 billion in 2018, the highest level in over a decade, and invested a record of over €80 billion into some 7,800 companies throughout Europe.

Baudon’s appointment as Chair of Invest Europe comes at the start of a period of change in European institutions, with incoming policymakers expected to set out new objectives for Capital Markets Union and implement the action plan for financing sustainable growth, while also commencing a review of the Alternative Investment Fund Managers Directive in 2020. At the same time, Brexit continues to create political uncertainty in the UK and across the EU for investment managers, institutional investors and companies.

“It has been my privilege to Chair Invest Europe over the last 12 months when, in the face of persistent uncertainty, it has achieved so much, including the roll-out of the VentureEU fund of funds programme and a new, lower risk-weight category for long-term equity under Solvency II,” said outgoing Chair Marovac. “I welcome Thierry into the role and look forward to further Invest Europe success under his stewardship.”

In addition to ensuring Invest Europe members’ voices are heard on key topics affecting private equity, Baudon wants to foster even greater understanding of the industry’s benefits to the broader economy among policymakers.

“Private equity and venture capital investment can have significant impact on job creation, talent development and growth, as well as innovation and entrepreneurship. I want to use my tenure as Chair to help the association to produce more high-quality data and research that demonstrates our positive impact on employment and the broader economy,” Baudon said.

Invest Europe has begun to collect employment data for the 15,000 companies backed by its members across Europe. The information supplements annual private equity and venture capital activity data to help provide a comprehensive picture of the industry’s reach and its benefits for European businesses and workers.

In the coming year, Invest Europe will update its Professional Standards Handbook for members with latest best practice guidelines. The association is also planning a climate change guide that will help the industry address risks associated with global warming.

Baudon’s career in private equity spans more than 20 years. He established Mid Europa Partners in 1998 and grew the firm into one of the largest and most respected private equity groups operating in Central and Eastern Europe. He served as Managing Partner until 2016 and Executive Chairman until the end of 2018.

Prior to forming Mid Europa Partners, Baudon headed the International Finance Division of the Suez Group. He also held senior management positions in the World Bank/IFC Group and in the European Bank for Reconstruction and Development (EBRD) between 1981 and 1995.

Baudon holds a BSc and MSc in Engineering from AgroParisTech, an MA in Economics and Finance from the Sorbonne University, and an AMP from INSEAD.

– European private equity investments increase 7% to €80.6bn in 2018
– Fundraising remains strong with €97bn committed by investors
– Nearly half of funds raised come from investors outside Europe
– Venture capital sets records with €11.4bn in fundraising and €8.2bn invested  

Private equity investment in European companies reached a new record of €80.6 billion in 2018, a 7% year-on-year increase, according to data released today by Invest Europe. Private equity funds invested in over 7,800 companies, also a new record, with 86% of the total made up by small and medium-sized enterprises (SMEs).

Invest Europe’s 2018 European Private Equity Activity Report is the most comprehensive and authoritative source of fundraising and investment data available. It reveals that investment increased across all segments of private equity, including larger buyouts, mid-market investments and growth capital, with venture capital backing for European companies hitting an all-time high at €8.2 billion.

“Record investment levels show that private equity and venture capital can identify attractive companies with the capacity to grow whatever the broader political and economic climate,” said Michael Collins, Chief Executive of Invest Europe. “Europe is packed with high-potential and innovative businesses, and private equity is increasingly seen as a supportive partner for companies looking to expand.”

Fundraising remained strong in 2018, as €97.3 billion was committed to European private equity, the highest total since the financial crisis. Investors from outside Europe contributed 46% of total fundraising, reflecting the findings of last November’s Global Investment Decision Makers Survey, in which 78% of participants said they expected increased investment in Europe in the next five years. Pension funds remained the largest investor group, accounting for almost one-third of total fundraising.

Total private equity exit activity declined in 2018, with divestments at cost [1] down 28% to €32 billion. The number of private equity-backed companies that were exited remained steady at 3,750.

Write-offs across all segments (buyout, growth and venture) fell to their lowest levels in ten years, underlining the industry’s resilience in 2018.

European venture capital fundraising reached a new high of €11.4 billion, up 11% from 2017. Private investor interest increased with family offices and private individuals accounting for 20% of capital raised, closely followed by funds of funds and other asset managers on 19%. The proportion contributed by government agencies fell to 18%, the lowest share in a decade.

“European venture capital has truly come of age thanks to a combination of strong returns, a growing band of billion-euro-plus tech and life sciences start-ups, and a string of high-profile exits, including the listing of music streaming service Spotify and the sale of mobile payments platform iZettle. There are eager strategic buyers and open markets around the world for Europe’s top-quality start-ups” said Nenad Marovac, Invest Europe’s Chair. “The result is increasing appetite among global institutional investors who see European venture as the way to invest in some of the world’s most dynamic and entrepreneurial companies.”

The 2018 European Private Equity Activity report covers activity on over 1,400 firms, directly verified by the fund managers via the European Data Cooperative (EDC). Working together with national private equity associations from across Europe to collate robust and comparable statistics, Invest Europe has developed the industry’s most comprehensive database. The EDC holds data from over 3,300 European private equity firms on 9,000 funds, 75,000 portfolio companies and 255,000 transactions since 2007.

Invest Europe is the association representing European private equity and venture capital, and their global investors. The full report is free to download from the website, investeurope.eu.

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– 78% of investors expect increased investment in Europe over next five years
– Europe’s perceived stability and commitment to sustainability declines

Europe’s attractiveness as an investment destination is on the rise compared to 2017, as the majority of global investors are more likely to invest in both the EU and the UK after Brexit, according to new survey findings.

Nearly 90% of investors said Europe has become a more attractive investment destination over the last five years, according to Invest Europe’s Global Investment Decision Makers Survey 2018, which the association will present at a high-level European Commission conference today.

Following last year’s inaugural survey, global investors still rank Europe above China and the USA for its highly skilled workforce, transport infrastructure and regulatory climate. They now perceive Europe to have moved ahead of the USA as the leader on innovation and entrepreneurship, taxation levels and access to global markets. However, Europe lags the USA on IT infrastructure and level of economic growth. Almost eight out of ten investors (78%) expect increased investment in Europe over the next five years, as they become more positive on investing in both the EU and the UK post-Brexit.

„Global investors are increasingly looking towards Europe,” said Michael Collins, CEO, Invest Europe. “The continent is now outshining China and the USA in many areas, from its skilled workforce to its open markets and thriving innovation. While Europe isn’t immune to the political and social strain being felt around the world, if policymakers focus on regulatory stability, investment in innovation and better capital markets integration, Europe can be on top in the years to come.”

Nine out of ten investors from the USA and China (both 91%) view Europe as more attractive than five years ago, up from approximately seven out of ten in last year’s survey (71% and 78% respectively). Around two in five investors from China (38%) say their view of Europe has improved because of a decline in the USA’s attractiveness, more than the 25% of respondents overall who said the same.

A clear majority of investors (82%) — especially those in China (97%) — state that a stable regulatory environment is important when making investment decisions, with 47% of investors rating Europe as a top performer on regulatory climate compared with the USA (32%) and China (22%). European policymakers can ensure the continent’s continued attractiveness by launching new investment incentives, investing in innovation and reviewing competition policy.

Global investors are most likely to consider Europe a global leader in finance and insurance, energy and the environment, and biotech and healthcare, while those from China see Europe as a global leader in most of the sectors tested.

However, investor confidence in Europe’s political stability fell from 50% to 40% year-on-year, while social stability dropped from 50% to 39%. Europe’s perceived commitment to sustainability and the environment — an important issue for 80% of investors — has also declined, from 74% to 50%. 

Invest Europe will present its survey findings today at the European Commission’s conference The Single Market as a Driver of Investment in Europe, where Commission President Jean-Claude Juncker will speak. The event is part of Invest Week 2018, a collaboration of over 30 organisations with events exploring investment into Europe’s sustainable growth.

Invest Europe is the association representing European private equity and venture capital, and their global investors. It commissioned ComRes, the independent research consultancy, to survey 360 investment decision makers at companies from the USA, China, Germany, the UK and France in October 2018. The full report is free to download from Invest Europe’s website, investeurope.eu.