17 Sep 2020
Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its first ever ‘Private Equity at Work’ report. A total of 10.5 million people were employed at 22,659 private equity backed businesses in Europe at the end of 2018 – the first full year analysed in the research. The figure represents 4.5% of the continent’s active workforce and equates to more than the entire population of Greece.
The research presents a transparent account of European private equity’s record on employment, demonstrating the industry’s commitment to workers and job creation just as businesses across the continent seek to bounce back from the economic impact of the COVID-19 crisis.
The report also highlights the impact of private equity investment and active management on job creation. Companies supported by Invest Europe members created 173,124 net jobs in 2018, more than the number of people passing through Amsterdam Central Station each day. Employment levels at those companies increased by 5.5% in 2018, five times the 1.1% growth achieved by European businesses on average. All stages of private equity created jobs at a higher rate than the European average, ranging from 5% for buyouts to 16% growth for venture capital.
“Invest Europe’s Private Equity at Work demonstrates just how deeply ingrained private equity is in the economic and social fabric of Europe. The industry is a major supporter of employment across the whole continent. Not only do its companies create jobs, but they do it at a much faster rate than the average European business,” said Eric de Montgolfier, CEO of Invest Europe.
De Montgolfier added: “Private equity is an engine for growth. And growth is an engine for job creation. In these challenging times, private equity backed companies are not immune from the unprecedented impact of COVID-19 on the economy. However, the industry’s focus on building better businesses, supporting investors and fuelling innovation, in turn driving growth and job creation, means that private equity has a critical role to play in Europe’s economic recovery.”
The report analyses the industry’s contribution to employment and job creation across every European region and all major industry sectors. Private equity backed businesses incorporated in Ile-de-France employed 1.2 million people, while nearly 3.4 million people worked for companies in the business products and services sector across Europe. Biotech and healthcare were among the best performing industries for job creation, increasing employment by 9.0% in 2018.
The research draws particular attention to private equity’s key role in helping small and medium-sized enterprises (SMEs) employing fewer than 250 staff, the backbone of the European economy, achieve their growth aspirations. A total of 14,500 private equity backed SMEs employed almost 900,000 people across Europe at the end of 2018. These companies increased employment at a rate of 10% in 2018, with over one in ten graduating to a higher business size category.
Invest Europe has started collecting data for future employment and job creation reports, expanding the scope of the study to capture information on more private equity backed companies in Europe. Over time, this data will expand to create a comprehensive picture of private equity’s contribution to jobs and the economy that those jobs support. To download and read Private Equity at Work in full, please click here.
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