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European private equity capital raised jumps 37% in 2016

European private equity fundraising increased 37% to €74.5 billion ($81.4 billion) in 2016, hitting an eight-year high, said private equity, venture capital and infrastructure association Invest Europe.

Pension funds provided 34% of all capital raised by European managers, said an update by the association. Funds of funds contributed 18% and insurance companies added 12% to fundraising. Sovereign wealth funds invested a further 10%, while family offices and private individuals provided 9%.

Buyout fundraising increased 70% to €56.3 billion in 2016, driven by larger strategies. Buyout funds that reached between a €250 million and €1 billion target raised about twice as much capital in aggregate as in previous years.

While venture capital fundraising increased 16% to €6.4 billion in 2016 from €5.5 billion in 2015, growth capital fundraising fell to €3.9 billion from €4 billion, Invest Europe added.

“This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment,” said Michael Collins, CEO at Invest Europe, in a news release.

“Over 40% of capital raised by European private equity last year came from investors outside of Europe, while a third of investments made into companies were cross-border,” said Mr. Collins. “Connecting global investors with local fund managers and working with policymakers to facilitate such cross-border flow of capital is an ongoing priority. This is an important source of funding for thousands of European companies.”

France and Benelux-based companies received more than a third of private equity investments in 2016. Investments in Southern Europe were 19% of the total, driven by increased investments in Italy and Spain.