07 May 2014
The European Private Equity and Venture Capital Association (EVCA) today launches its European Private Equity Activity report, the industry’s most authoritative source on private equity fundraising and investment activity across Europe. With data on more than 1,200 European private equity firms, the 2013 statistics cover 90% of the €555 billion (bn) in capital under management in the European market.
Fundraising more than doubled from 2012 to €53.6bn. This was driven by a change in the profile of the funds raised, with 12 buyout funds each raising in excess of €1bn, representing 66% of total fundraising.
The industry attracted significant levels of overseas capital into Europe accounting for around half of the funds raised (€26.2bn). The contribution from North American investors increased from 24% in 2012 to 36%.
Pension funds and fund of funds accounted for more than half of the €53.6bn total funds raised. Pension funds were the source of almost 40% of funds. Other major sources include fund of funds (16%), sovereign wealth funds (11%) and insurance companies (11%).
Venture capital accounted for 8% of total fundraising. The €4bn raised represents an increase of 4% on 2012. Government agencies’ contribution remained stable at 38%. Family offices and private individuals contributed 23% and fund of funds 12%.
Overall investment by private equity into European companies remained stable in 2013 at €35.7bn in more than 5,000 European businesses. Of these, more than 40% were backed for the first time.
Of the total €35.7bn, venture capital investment accounted for €3.4bn, in more than 3,000 companies. The amount invested increased by 5% and the number of venture-backed companies remained stable since the previous year.
A total of 2,290 European companies were divested or sold (exited) by private equity fund managers in 2013, representing former equity investments of €33.2bn. The number of companies exited increased by almost 10% and the amount divested at cost increased by 54%. The most prominent exit routes were trade sales (27%), sale to another private equity firm (26%) and sale of quoted equity (14%). Almost 40% of the divested companies followed these exit routes.
The strength of public markets in 2013 was reflected by the steep increase in divestments by flotation (IPO). This exit route increased more than seven times by amount (€2.2bn) and almost four times by number of companies (23). EVCA Chief Executive Dörte Höppner said: “Private equity has confirmed its place at the heart of the European growth story, supporting over 5,000 companies and bringing life back to the IPO market.
“Private equity plays a crucial role in identifying tomorrow’s success stories, providing businesses with both access to capital and essential operational and strategic expertise. I am particularly pleased to witness foreign investors’ enthusiasm for European private equity – a sure sign that the world’s largest trading bloc has regained its rightful place at the centre of the investment map.”
EVCA European Private Equity Activity Report
The EVCA European Private Equity Activity report is the most robust source of data for European private and venture capital activity. It is based on independently collected data, data from private equity fund managers (General Partners) across Europe and from national private equity and venture capital associations. The 2013 activity survey by PEREP_Analytics covered 90% of the €555bn capital under management. EVCA data is used routinely by the European Commission, OECD, EUROSTAT, major think tanks, academics and journalists.
Frequently Asked Questions
1. How much money was raised?
Overall fundraising more than doubled to €53.6bn in 2013 from €24.6bn in 2012.
2. Why the increase?
The number of funds involved in fundraising decreased from 266 to 253. The increase in funds raised was driven by buyout funds of which 12 individually raised more than €1bn each, representing in aggregate 66% of total fundraising.
3. Where did the money come from?
Pension funds provided almost 40% of sources of funds. Fund of funds contributed 16%, followed by sovereign wealth funds (11%) and insurance companies (11%). Around half of the amount (€26.2bn) was raised from institutional investors outside Europe. In 2013, the share from North American institutional investors increased to 36% from 24% in 2012.
4. What about investment?
5. How many companies were exited?
6. What does the data indicate about fund profitability?
Divestment statistics at cost are not an indicator of performance because they measure how much equity was originally invested. For example, in 2007, a company received an equity investment of EUR 50 million. In 2010, this company is fully exited via trade-sale. We then report a trade-sale of EUR 50m. See next question for more information.
7. What about returns data?
Information on European private equity fund performance can be found in the EVCA Thomson Reuters Performance Report. The EVCA reports returns at fund but not portfolio company level. Studies such as EY’s ‘Myths and Challenges’ (2013) provide insights on and the drivers of returns on a portfolio company basis.
8. Can you provide a breakdown of individual funds and countries?
Confidentiality rules do not allow reporting of disaggregated data that would reveal the identity of individual private equity firms and their portfolio companies. The EVCA does provide aggregate figures on a country by country basis (on request)
9. Can you put this into context?
10. How much data was collected, from how many firms and how many countries?
1,917 private equity firms with, in aggregate, €555bn capital under management are monitored by the PEREP_Analytics database. The 2013 activity survey by PEREP_Analytics covered 90% of the €555bn capital under management. Information on activity (fundraising, investment and divestment) was recorded for more than 1,200 firms.
Data is collected for the whole of Europe, including for example Switzerland, Norway and the Ukraine, and not just the European Union.
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