Executive summary: “Private Equity and Venture Capital in Europe” (academic publication), by Stefano Caselli and Giulia Negri

This is the third edition of “Private Equity and Venture Capital in Europe.”

As of today, private equity investments cover the majority in the investment class of private capital. Worldwide, there is currently a record level of Asset Under Management (AUM) for private equity managers supposed to increase up to $ 9tn by 2025, and analysts forecast a strong performance and net inflows into this asset class to drive a global growth rate of 15.6% over the period 2020–2025 (Source: Preqin).

European private equity is keeping up with the pace in the light of an increasing interest by investors. Among others, the increase in the number of investors keen on investing in private equity is a consequence of the ever-growing interest of some specific categories like sovereign wealth funds that increased the capital allocation to private equity investments by more than 350% in the past 5 years (Source: Preqin).

The final effect of both the increasing interest of investors and the rising AUM of private equity operators is that there is a greater space for deals with a larger average size. As of November 2020, in spite of a lower volume of deals, in Europe, deals with a size larger than half a billion US Dollars accounted for 85% of the aggregate volume of deals involving buyout transactions (Source: Preqin).

Given the importance that updated information has in nowadays world, this third edition of the book presents various charts and league tables to transfer to all readers how this asset class will become more and more important in the next years.

The book examines how the industry has grown in Europe, the obstacles it has faced, and its ongoing evolution, opening with a preface by Prof. Josh Lerner (Harvard Business School).

As the private equity world continues to undergo many challenges and opportunities, this book presents both fundamentals and advanced topics that will help readers stay informed on market evolution. The book first presents how the private equity industry works and its mechanics, then it delves into the different investment strategies that exist in such a varied sector, from early stage financing to the so-called “vulture” deals. It highlights many of the institutional and regulatory challenges that are specific to European funds, providing a unique focus on Europe for equity investors and long-term investments. At the same time, the book presents the methodologies that one should know when making a private equity investment.

The book contains theoretical knowledge put into practice using real-world cases and the language and the methodologies of practitioners. Thanks to authoritative sources such as Invest Europe, the book is able to provide an up-to-date image of the industry.

Finally, to provide a full hands-on view and in the light to provide their view on the effect Covid-19 had on this industry, this book presents three interviews (“Voices from the Practice”) to three top-tier private equity managers:

• W. Dexter Paine, III; Chairman and a Founding Partner of Paine Schwartz Partners.
• Fabio Lorenzo Sattin; Executive Chairman and Founding Partner of Private Equity Partners.
• Nino Tronchetti Provera; Founder and Managing Partner of Ambienta SGR.