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Private Equity

Private equity fundraising, investment in Europe hits record levels in 2018 – report

Total private equity fundraising in 2018 into Europe-focused strategies reached a record high in 2018.

Private equity investment in European companies reached a record high in 2018, Invest Europe said.

The trade association representing Europe's private equity, venture capital and infrastructure sectors, said Tuesday in a report that total fundraising in 2018 into Europe-focused strategies reached €97.3 billion ($111 billion), up 0.7% from 2017.

The number of funds raising new capital dropped by 5% to 581.

In 2018, pension funds accounted for 31% of total capital raised. Funds of funds committed 18% of the total; family offices and private individuals, 11%; insurance companies, also 11%; and sovereign wealth funds accounted for 9% of capital raised last year. The remainder was raised by other investors, including endowments and foundations.

Among specific private equity strategies, buyout fundraising decreased by 8% to €66.5 billion. Venture fundraising increased 11% to a record €11.4 billion, while growth capital fundraising increased by 5% to €7.8 billion, reaching the highest level recorded to date.

Private equity investment in European companies increased 7% in 2018 to €80.6 billion, a 7% year-on-year increase, the highest amount on record.

Buyout investment increased by 10% year-on-year to €58.8 billion. Venture capital investment reached a new high of €8.2 billion in 2018, up 13% from 2017. Growth capital investments remained at €11.9 billion.

Invest Europe also analyzed fund exits, finding 3,750 European companies were exited in 2018, down 3% from 2017. Divestments at cost declined by 28% to €32 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," Invest Europe CEO Michael Collins said in a statement accompanying the report. "Europe is packed with high-potential and innovative businesses, and private equity is increasingly seen as a supportive partner for companies looking to expand."