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.

EDC to track European private equity emissions and progress towards net zero. Will also measure women’s role in the board and staff of portfolio companies. EDC to track European private equity emissions and progress towards net zero. Will also measure women’s role in the board and staff of portfolio companies.

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.

• 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.

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.

• Private equity invests €57bn in H1 2021, a new half-year record
• Over 95% of private equity firms intend to focus more on ESG in the near future

Invest Europe, the association representing Europe’s private equity, venture capital, and infrastructure sectors, as well as their investors, today published two reports underlining the robust recovery in private equity activity in the first half of 2021, as well as the strengthening belief in the industry’s ability to contribute to a stronger economy and better society.

‘Investing in Europe: Private Equity Activity H1 2021’ provides a detailed snapshot of private equity activity in Europe and reveals that firms invested €57.3 billion in businesses across Europe, the highest ever six-month total. The record was fueled by a strong rise in venture capital investment to €10.2 billion, a 58% increase on the previous six-month record registered in the second half of 2020. Growth investments also hit a new high, more than doubling to €17.5 billion, highlighting the industry’s focus on innovative, fast-growing businesses that are laying the groundwork for a better tomorrow.

The data shows strong first half fundraising of €52.4 billion, as long-term investors, such as insurers and pension funds, continue to target private equity in search of better returns for European savers. A record 365 funds completed fundraising during the first six months of the year, an all-time high for any H1 period. At the same time, divestment increased by 63% over the same period last year as firms successfully exited businesses via public market listings and competitive sales processes.

‘The insight: how Europe’s private equity industry is anchoring long-term investors – Pan-European market sentiment survey’, conducted and published in partnership with consultancy Arthur D. Little, reflects the momentum in private equity activity in the first half of the year and maps the role the industry is poised to play in the near term. Over two-thirds of fund managers see stronger investment opportunities in the coming year compared to the previous 12 months, and almost 60% of investors expect increased allocations to private equity over the coming three years.

As the outlook improves, the industry is concentrating ever more attention on delivering higher sustainability standards and more ethical practices. Some 95% of general partners stated they intend to increase their focus on Environmental, Social, and Governance (ESG) issues in the near future, and 86% are planning to concentrate more on diversity & inclusion. The survey also found that while COVID-19 had a negative impact on the funds of some four in ten managers, 83% of them responded that it also had a positive impact on their portfolio companies.

The theme of greater social and environmental responsibility runs throughout the survey, with 46% of investors expecting to increase allocations to impact funds over the coming 12 months.

Eric de Montgolfier, CEO of Invest Europe, commented: “Record investment levels and increased confidence in the outlook indicate that European private equity has adapted to the challenges of COVID-19 and is moving past the pandemic. At the same time, private equity is evolving as managers and investors focus even more attention on ESG, diversity and inclusion. This is an industry that recognises its role as a cornerstone of the European economy and wants to be at the forefront of the recovery, as well as the trends that matter to society.”

Invest Europe and ADL will be hosting a webinar on the survey from 1700 to 1730 CET on 17 November 2021. To register, please visit this page.

Both Invest Europe’s Private Equity H1 2021 report and Private Equity Sentiment Survey can be accessed 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.

• 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.