In 2017, the European private equity market confirmed its dynamism and attractiveness for institutional and private investors.
Invest Europe has just published the European Private Equity activity statistics for 2017. These confirm the very good dynamics of the asset class since 2008/2009.
A very dynamic activity
Fundraising reached €92 billion at the highest level in the last 10 years.
Investment was also healthy, at €72 billion vs. €56 billion in 2016, with strong activity in all segments: buyout and growth capital.
Disposals amounted to €44 billion in cost price of the investments sold. This is the fourth consecutive year in excess of €40 billion, a figure that reflects the sustained and regular capital turnover.
A well-diversified investor base
Pension funds remain the main provider of funds with a stable market share, around 30% of the capital contributed to funds being raised.
Fund of funds and asset managers represent the second largest category of investors with a market share that is increasing to 20%. This increase reflects the demand from end clients, both institutional and private, who wish to increase their exposure to the asset class and entrust its management to specialised players.
Family offices and private investors are the third most important category with a marked increase in their contribution to fundraising from 10% to 15% in 5 years.
Next come sovereign wealth funds (9%), insurers (8%), banks (6%) and government agencies (6%).
The capital raised by European private equity funds comes from local and international sources.
More than 40% of the capital raised was provided by international investors, 26% from North America and 15% from Asia and Australia. This was already the case in 2016 and these figures reflect the confidence of international investors in Europe and its private equity industry.
An enabling global environment and a recognized benefit
The European market is part of a favourable trend that is also observed in other parts of the world, particularly in North America, the world’s leading market for private equity, where fundraising reached $272 billion in 2017, an amount up 23% year-on-year (source Preqin).
The industry as a whole benefits from a favourable economic environment with solid global growth and a financial environment with available and relatively inexpensive financing.
The acceptance of private equity as a useful asset class that helps to strengthen the position and strategic value of the companies it supports also contributes to its steady development in most regions of the world.
This note is a viewpoint of Essling Capital. It is intended to inform its readers in general and does not constitute investment advice or solicitation. Essling Capital declines all responsibility for any errors or omissions it may contain.
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