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.