Invest Europe

Record capital under management for European PE

  • 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 opens its ESG Reporting Guidelines

  • Invest Europe makes publicly available its ESG Reporting Guidelines and revised template
  • European Investment Fund, AP2, France Invest endorse guidance

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, is making its ESG Reporting Guidelines available to the entire private equity and venture capital community – previously only available to members – giving all firms best practice guidelines for reporting ESG aspects and metrics, policies and practices, enabling long-term investors to access sustainability information on their investments.

  • Invest Europe’s ESG Reporting Guidelines comprise a revised template for reporting to limited partners, including a list of recommended ESG metrics in line with regulatory requirements, voluntary initiatives, and investors’ needs. The Guidelines include direction for firms on integrating ESG into reporting processes throughout the investment lifecycle, and information on developing an ESG policy and assessing materiality. They also contain an extensive mapping of the pan-European regulatory environment, as well as existing standards and frameworks.
  • The Guidelines have already received broad industry recognition, with endorsement by the EIF, AP2 and France Invest. A range of general partners have already started using the template as their preferred format for sustainability reporting.

Invest Europe created the ESG Reporting Guidelines in 2022 with the support of more than 50 industry and ESG experts from Europe and beyond, initially making the template and guidance available to Invest Europe members to gather experiences and feedback. The aim of extending the Guidelines and template to the entire industry is to strengthen and accelerate momentum towards codification and harmonisation of ESG reporting, making the process easier for GPs, and the data more comparable and scalable for LPs.

The broad availability of the industry-leading Guidelines comes as the climate crisis reaches unprecedented levels, leaving no sector of activity unaffected and increasing pressure on businesses to step up efforts to tackle carbon emissions. Other topics, such as the participation of women in key roles and diversity in the workforce, are also generating attention from long-term investors and the public at large, driving greater action by private equity and venture capital firms.

Eric de Montgolfier, CEO of Invest Europe, commented:

  • “ESG and the climate crisis are among the biggest and most complex issues facing the industry today. Our ESG Reporting Guidelines provide much-needed clarity and practical guidance on incorporating and reporting on essential ESG topics. By extending availability of the Guidelines, we aim to increase harmonisation across the industry and create a new benchmark for ESG reporting, helping the industry to participate fully in the drive to a more sustainable future.”

When reporting according to recommended metrics, fund managers can leverage Invest Europe’s logo to signal that reporting is in line with industry norms. The revised ESG reporting template also includes additional metrics for those firms that wish to go further in their reporting to satisfy voluntary standards, investor demands, or to expand ESG data coverage.

Leading institutions, investors, fund managers, national associations and ESG solutions providers have given their support to the new Guidelines, paving the way for widespread adoption across the industry.

Marjut Falkstedt, Chief Executive Officer, European Investment Fund, commented:

  • “Tracking the performance of our investments is important for us. At the EIF, we want to contribute to the overall efforts of generating understandable and comparable metrics, so that ESG considerations can be leveraged towards achieving the policy goals of a more sustainable and inclusive Europe. We’re pleased about Invest Europe’s initiative for this ESG reporting template, helping to pave the way for a harmonised approach across the European venture capital and private equity industry.”

Anders Strömblad, Head of Alternative Investments, Andra AP-fonden/AP2, added:

  • “This guidance and the reporting template constitute a big leap forward for the entire private equity industry. Consolidation and harmonisation of reporting on ESG will save time and resources and – more importantly – facilitate data-driven ESG decisions for both GPs and LPs. By also securing coherence with international initiatives, the Invest Europe guidance and template also forms the most solid steppingstone for global consistency in ESG reporting.”    

Alexis Dupont, Managing Director, France Invest, said:

  • “Embracing sustainable investment and addressing climate change informed France Invest’s national pioneering work on ESG reporting harmonisation. A common approach at the EU-level is required, with Invest Europe’s ESG Reporting Guidelines now setting a new global ‘gold standard’ for ESG reporting to investors. France Invest is delighted to support the initiative, and promote these Invest Europe guidelines in France.”

The ESG Reporting Guidelines are part of an extensive library of ESG and sustainable investing resources created by Invest Europe to help managers and investors to understand and navigate this crucial topic. They include our Guide to ESG Due Diligence for Private Equity GPs and their Portfolio Companies, our Climate Change Guide, and the ESG KPI Report which tracks industry efforts across a range of ESG topics.

European PE returns widen lead over public markets in 2022

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 2022’, its fourth annual study of private equity returns. The research reveals that European private equity’s long-term outperformance over listed equity benchmarks widened in 2022, as the asset class continued to deliver superior returns to long-term investors in a period when global markets weakened under pressure from inflation and interest rate rises.
  • European Buy-Outs delivered a net IRR of 15.17%, over 950 basis points ahead of the 5.52% return for the MSCI Europe to the end of 2022. Mid-market Buy-Outs, European private equity’s engine room, generated the best performance of the segment with a net IRR of 16.55%, almost 10 percentage points ahead of the benchmark over the same period.
  • European Growth funds maintained the strongest returns since inception of any segment with a net IRR of 15.34% to the end of 2022, increasing its strong lead over the MSCI Europe which returned 6.03% over the same time frame. European Growth funds narrowed the gap on North American funds with strong net IRRs of 21.63% over three years and 20.39% over five years, underlining increasing industry maturity and strengthening performance from European scale-ups.
  • Over medium to long time horizons, European Venture Capital continued to perform strongly and eclipsed North America with net IRRs of 31.44% over five years and 23.07% over ten years. Returns for up to the 20-year mark are now ahead of the North American peer group, demonstrating the strength of Europe’s VC ecosystem and the growth trajectory of the continent’s start-ups.

While it focuses on the consistent long-term rewards available to investors, The Performance of European Private Equity Benchmark Report 2022 also highlights the short-term outperformance of the asset class in turbulent markets. European Buy-Outs delivered a modestly negative net return of -1.69% in 2022, with growth funds also only down by single digits, reflecting underlying portfolio companies’ resilience to market conditions and managers’ focus on operational excellence. The result helped underpin relative returns for investors including pension funds and insurers, offsetting public market volatility and a European equity benchmark which registered a double-digit decline.

Eric de Montgolfier, CEO of Invest Europe, commented:

  • “Whether it’s over the short-term or long time horizons, European Buy-Outs, Growth and Venture Capital significantly outperform listed equity benchmarks. That is why pension funds and insurers, as well as other long-term investors, rely on private capital investments for superior and consistent performance that can support citizens’ retirement funds and savings.”
  • “Not only does European private equity consistently beat public equity benchmarks, but it also compares favourably with returns from other private equity ecosystems around the world. The industry is creating and sustaining European champions, from dynamic start-ups to mature multinationals, and in doing so is supporting Europe’s economy and society with innovation, employment and growth.”

The strong performance to the end of 2022 reflects the growing support of institutional investors from around the world for European private equity, its experienced home-grown managers, and unique pool of world-class businesses. Invest Europe’s recently published Investing in Europe: Private Equity Activity 2022 tracked €170 billion of private equity fundraising last year, a new industry record, with almost half of all commitments coming from investors outside of Europe, including 25% from North America.

The Performance of European Private Equity Benchmark Report 2022 draws its findings from an ever-richer data set, analysing information on more than 750 European funds to deliver deep industry insight. The report presents European Buy-Outs, Growth and Venture Capital performance in terms of IRR, as well as multiple of invested capital to demonstrate net cash returns to investors. It also highlights the time to liquidity, showing that European Buy-Outs distribute capital faster than anywhere else in the world, returning cash to investors in under four years.

CEE VC investment achieves new record in 2022

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 19th 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.

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 2021, please click here.

PE and VC deliver record-breaking investments in Europe

  • €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.

European Data Cooperative to Measure Private Equity

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

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.

PE and VC-backed firms shake off COVID disruption

  • 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 to Set ESG Reporting Standards

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.