Private equity is well positioned to help jump-start economic recovery

Mihai Cristea 03/06/2020 | 15:54

The private equity investments from Romania represents 0.189% of GDP, based on the location of the portfolio companies, more than double as in Portugal (0.090%) and Hungary .(0.089%), according to Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors.

By Claudiu Vrinceanu

 

The champion countries. with the biggest proportion of private equity investments are Baltic markets, with a 0,953% level of GDP , followed by UK (0.890%), Netherlands (0,833%)and Sweden (0.815%).

“It is no exaggeration to state that the decade from 2009 to 2019 was unprecedented for the private equity sector in Europe, in terms of growth, jobs, value creation and returns for investors. Today, we recognise that an unparalleled pandemic has obliged all of us within the private equity sector to turn the page on what was our before, and together begin work on a new chapter and challenge. Where 2009 marked reconstruction following a financial crisis, 2020 presents itself squarely as an economic crisis – one which leaves no- one untouched”, said Eric de Montgolfier, CEO, Invest Europe.

Based on these figures, we can say that private equity sector is well positioned to help jump-start Europe’s economic and societal recovery.

Total fundraising in Europe in 2019 climbed to €109 billion, up 6% from 2018 and the highest total over the past decade. In parallel, the total equity amount invested in European companies increased 10% year-on-year to €94 billion in 2019 – the highest level of investment ever recorded – with continued concentration across three sectors: ICT (27%), consumer goods & services (23%) and business products & services (19%).

Small and medium-sized enterprises (SMEs) are the backbone of the European economy and private equity’s overwhelming focus on, and funding of, SMEs reaffirms the sector’s commitment to Europe’s economic engine.

More than 45% of the private equity capital raised across the continent in 2019 came from non-European investors, led by investors from North America (28%). Ensuring private equity’s contribution to the European economic recovery is supported by private equity and venture capital’s focus on the region, with 63% invested domestically, 29% in another European country and a mere 8% from outside Europe.

 

Photo: https://www.deschenaux.com/

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