European PE capital peaks in 2021 at €846bn

  • 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 3rd 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 2021please click here.