European Mid-Market private equity returns accelerate to 16.9% to the end of 2023 with €215 billion invested over last five years

• Europe’s Mid-Market PE returns 16.90% to end of 2023, exceeding other segments and regions 

• Mid-Market PE backed companies added 7.9% more jobs in 2022; 4x European average

Brussels, Belgium, 14 November 2024, 1100 AM CET - Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has released Mid-Market Private Equity: Europe’s Engine for Growth, the 2024 edition of its report that reveals the far-reaching economic and social benefits of Mid-Market private equity investment across Europe.

• Mid-Market private equity funds delivered returns of 16.90% net IRR to investors since inception to the end of the 2023, accelerating from the previous year. The figure was well in excess of the 7.15% generated by the equivalent European public equities benchmark over the same period and far ahead of the 13.29% return created by North American peers.

• Companies backed by Mid-Market private equity added over 160,000 net new jobs in 2021-2022, equating to 7.9% employment growth, almost four times the European job creation total of 2.0%. Those jobs were added in companies at the heart of Europe’s sustainable and digital transformation, with 20% more workers hired in the energy and environment sector, 15% more in ICT, and 10% in finance and insurance, a sector fuelled by Europe’s strength in dynamic fintechs.

Europe’s Mid-Market private equity segment could not avoid the turbulence affecting markets in 2023, with investment contracting to €35 billion and the number of companies backed dropping to 1,067. However, investment by value and number of companies remained ahead of the pre-pandemic levels, and roughly two times the total witnessed a decade earlier. At the end of 2023, funds had €96 billion of dry powder available for new investment in companies, also approximately double the amount of ten years ago.

During the five years between 2019 and 2023, Mid-Market private equity invested €215 billion in over 4,000 European companies, demonstrating the industry’s support for small and medium-sized businesses at the heart of the continent’s economy and society. Over the same period, funds raised €186 billion, underlining strong support from long-term investors, including pension funds and insurers. Together with fund of funds – often conduits into the asset class for smaller pension funds – these investors account for about half of all commitments, in turn generating returns that can boost the retirement funds and savings of Europe’s citizens.

Eric de Montgolfier, CEO of Invest Europe, commented:

“European Mid-Market private equity is a critical link in the European investment ecosystem, driving value creation that permeates the entire continent, and bringing growth and prosperity to countries and communities. If the private equity industry is a cornerstone of Europe’s economy and society, then the Mid-Market is the rock on which it stands.”

“Even in challenging times, Europe’s Mid-Market managers have been at business’s side, helping companies through the pandemic, supply chain disruption, and geopolitical turmoil, while opening new markets, developing products and services, and implementing ESG best practices. The segment has proved itself a force in all weathers, building better businesses that support Europe’s ambitions as well as its people.”

Invest Europe’s Mid-Market private equity report analyses data to show the segment’s spread across the continent, and its concentration in France & Benelux, and UK & Ireland. The data also highlights the dominance of Mid-Market specific funds and managers that have strong networks and deep expertise in supporting and growing companies that are fundamental to Europe’s growth and development.

Click here to download a copy of Mid-Market Private Equity: Europe’s Engine for Growth 2024.

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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 €1.15 trillion of assets under management. Businesses with private capital investment employ 10.9 million people across Europe, 5% of the region’s workforce.