05 Jul 2021
Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published ‘The Performance of European Private Equity Benchmark Report 2020’, a transparent study of private equity returns. The findings show that European private equity strongly outperformed listed equity benchmarks to the end of 2020, underlining the industry’s resilience during the COVID-19 crisis and its consistent ability to support the long-term investors that guarantee the pensions and savings of European citizens.
The Benchmark Report 2020 tracks Buy-Out, Growth Capital and Venture Capital funds over more than three decades to create a comprehensive picture of industry performance. The data shows that European Buy-Outs, the largest segment in the study, delivered an annualised return of 15.06% since inception to end-2020, far ahead of the 5.48% achieved by the MSCI Europe index over the same period. Within the segment, mid-market Buy-Outs that support, help develop and professionalise medium-sized European businesses across the continent, generated an annualised return of 17.01%, beating the listed equities benchmark by 994 basis points.
The data underlines European Buy-Out funds’ consistently high performance, delivering IRRs between 13.00% and 15.50% over periods of 10 years and longer, the timeframes that help long-term investors - such as pension funds and insurers - to deliver better retirements and savings for millions of Europeans. Furthermore, European Buy-Outs perform consistently and in line with their North American peers, while delivering returns ahead of funds from the rest of the world.
Eric de Montgolfier, CEO of Invest Europe, commented: “Over the very long timeframes that matter to pension funds and insurers, European private equity far outperforms listed equities. Moreover, the data underlines European private equity’s resilience in 2020 as efforts to protect companies through the depths of the crisis paid off. This industry consistently delivers the performance that investors need, while supporting the businesses that underpin Europe’s economy and society.”
European Venture Capital and Growth Capital funds clearly beat equity benchmarks to the end of 2020, as funds backing SMEs, start-ups and scale-ups generated strong performance. Venture Capital funds delivered an 11.09% return since inception versus 7.82% for the MSCI Europe index over the same period, whilst Growth Capital funds generated an IRR of 13.66% against 6.40% for their benchmark.
Returns for Venture Capital funds in particular have accelerated as the industry has matured and demonstrated its ability to rival Silicon Valley for supporting innovation and entrepreneurial start-ups. European VC returned 21.90% over five years to end-2020 and 19.70% over 10 years, beating North American funds that delivered 15.51% and 18.50% respectively. Further evidence of the growing strength of VC in Europe is the 1.97x MOIC achieved in this years’ report, an indication of strong cash returns on a par with the 2.03x seen for North American funds.
Performance overall of European private equity improved in 2020, with private equity firms supporting their portfolio companies through the crisis. These efforts led, in fact, to a widening of outperformance over listed indices, and a reduction in the number of loss-making funds (as well as a reduction in levels of losses seen).
The findings echo the resilience displayed in Invest Europe’s recent Investing in Europe: Private Equity Activity 2020 report which showed it was the second-best year for investment and one of the strongest on record for fundraising.
‘The Performance of European Private Equity Benchmark Report 2020’ is available to Invest Europe members. To request a copy of the report, please email info@investeurope.eu.
Media enquiries For more information please contact
Eric Drosin
Communication Director
You can accept or refuse cookies. Accepting cookies is usually the best way to make sure you get the best from a website.
Most PCs automatically accept them but you can change your browser settings to restrict, block or delete cookies if you want. Each browser is different, so check the 'Help' menu of your particular browser (or your mobile phone's handset manual) to learn how to change your cookie preferences. Many browsers have universal privacy settings for you to choose from.
How to manage cookies in Internet Explorer
Cookie settings in most versions of Internet Explorer can be found by clicking the tools option and then the privacy tab.
How to manage cookies in Firefox
Cookie settings in Firefox are managed in the Options window's Privacy panel. See Options window - Privacy Panel for information on these settings.
How to manage cookies in Chrome
Click on the spanner icon on the toolbar, select settings, click the under the bonnet tab, click on content settings in the privacy section.
How to manage cookies in Opera
You can manage cookies in Opera if you Click on settings, then Preferences, then Advanced and finally Cookies
How to manage cookies in Safari
Choose Safari, then preferences and then click security. You should then be able to specify if and when Safari should accept cookies.
To manage cookies on your mobile phone please consult your manual or handbook.
Get more help about how cookies work with specific browsers.
If you decline cookies, some aspects of Invest Europe site may not work on your computer or mobile phone and you may not be able to access areas you want on the website. For this reason we recommend that you accept cookies.
If you delete all your cookies you will have to update your preferences with us again and some aspects of our site may not work.
If you use a different device, computer profile or browser you will have to tell us your preferences again.
If you'd like to learn more about cookies in general and how to manage them, visit aboutcookies.org.
We can't be responsible for the content of external websites.
Opt-out of cookiesThis is for members only. To view in full login or join Invest Europe today.
Find out more