Investment to European companies rose to its highest level since 2008 last year, hitting €74.5bn: a 37% annual increase. That is according to figures released by non-profit private equity (PE) industry body Invest Europe.
In its 2016 European Private Equity Activity report, the organisation revealed that the PE share of that overall investment totalled €53.7bn – the second-highest amount since 2008.
Europe-based PE and venture capital (VC) funds raised €240bn over the past four years – more than double the amount they raised between 2009 and 2012.
VC fundraising increased to €6.4bn in 2016, surpassing the European record achieved since 2008, driven by a rise in VC funds reaching more than €100m at final close.
Meanwhile, VC investment increased by 4% to €4.4bn. More than 3,000 companies received investment, with a trend towards larger financing rounds.
Almost 6,000 companies across the region benefited from the surging investment, 83% of which were SMEs.
The top three most-invested sectors were:
More than 3,500 European companies were exited in 2016, representing former equity investments (divestments at cost) of €38.9bn. While that was around 14% lower than the previous year’s total, it was broadly in line with the annual average since 2012.
The three most prominent exit routes by amount at cost were:
Invest Europe chief executive Michael Collins said: “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.
“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.”
He added: “This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment.”