European mid-market private equity displays unique strength through market-leading returns and employment growth

• Europe’s mid-market PE returns 16.55% to end-2022; outperforms other segments, regions

• Mid-market funds added 6.9% more jobs in 2021, almost 6x the 1.2% growth across Europe

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published its updated Mid-Market Private Equity: Europe’s Engine for Growth report, highlighting the market-leading performance of European mid-market private equity and the ability of firms to identify and help grow dynamic mid-market companies.

• Mid-market private equity returned 16.55% to investors to the end of 2022, eclipsing the performance of funds focused on small, large and mega-scale European buyouts, as well as those from North America and the rest of the world. Mid-market IRR & mPME performance was almost 10 percentage points ahead of the MSCI Europe listed equity benchmark, which returned 6.82% to investors over the same period.

• European mid-market private equity backed companies added 116,800 jobs in 2021, representing employment growth of 6.9%, well ahead of the 1.2% for all European companies. The segment employed 3,678,250 people at the end of 2021, representing 35% of all private equity backed jobs in Europe. Financial and Insurance Activities and Information Communication Technology showed the fastest rates of worker growth in 2022, with each sector expanding by 15%.

The updated and expanded edition of Europe’s Engine for Growth not only examines the financial and social outperformance of mid-market private equity, but also delves into investment patterns and profiles, drawing attention to the segment’s long-term growth, strategic flexibility and global commitments.

Over the past decade, the volume of mid-market private equity investment into SMEs and growing European businesses more than tripled from €14 billion in 2013 to €46 billion in 2022, while the number of companies supported more than doubled. Investments totaled €212 billion for the five years from 2018 to 2022, while capital raised reached €194 billion, up more than 50% on the prior five-year period.

Eric de Montgolfier, CEO of Invest Europe, commented:

“Mid-market private equity is a unique European strength. It plays a key role in the private equity value creation chain, scaling up SMEs, improving operations, taking companies into new markets, and putting them on a bigger stage. In short, Europe’s mid-market exemplifies private equity’s drive to build better businesses.”

“The mid-market has been a strong and reliable source of investment for companies, performance for investors, and jobs for citizens. This broad and diverse private equity segment will be crucial in supporting companies through the challenges ahead to ensure they emerge as even stronger European champions.”

Europe’s Engine for Growth highlights the increased scale of European mid-market private equity over the past decade, reflecting the step change seen across the entire European private equity and venture capital ecosystem. Funds held a record €318 billion in capital at the end of 2022, more than double the amount managed on behalf of investors in 2013. European mid-market dry powder also more than doubled over the same period, providing firms with €95 billion of potential investment for new and existing companies across the continent.

To receive a copy of the members-only Mid-Market Private Equity: Europe’s Engine for Growth report, please contact Invest Europe.

About Invest Europe

Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. We have over 650 members, split roughly equally between private equity, venture capital and limited partners – with some 110 associate members representing advisers to our ecosystem. Those members are based in 57 countries, including 42 in Europe, and manage 60% of the European private equity and venture capital industry’s €1,004 billion of capital under management. Businesses with private capital investment employ 10.5 million people across Europe, 4.5% of the region’s workforce.