Multi-year trend

Multi-year trend

2017-2023

It is strikingly clear that over time the net effect on jobs of private equity ownership is overwhelmingly positive.

The observed net positive effect is consistently larger than that seen in the wider European economy. This is the case even though during specific years – the COVID-19 pandemic, the raising inflation and the invasion of Ukraine being three notable examples – there may be understandable difficulties in growing overall employment levels across portfolio companies.

This section provides further context to the two-year job creation trend shown throughout the main body of this report. It provides a vision of job growth in private equity-backed European portfolio companies from 2017-2023.

 

Job creation

Even during challenging years, the average growth in portfolio companies backed throughout the period reached 4%, i.e., a net total of 453,594 jobs were created by the companies under study. 

In the chart opposite, the effect of COVID-19 is clearly visible: between 2019 and 2020, job growth was only 0.2%. However, in the following three years, job growth raised again, even if it is still below the pre-pandemic level.

Note: In this section, the sample of portfolio companies is different to that seen in the main body of the report. Here, 3,050 European portfolio companies are under study.


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Job creation 2017-23

By portfolio company stage – Individual years

Bubble_Chart_Analysis 1_Total_Job_creation_growth_Multi_Reportl_736x480_250326_animated

+453,594

net jobs created 2017–2023

+3.9%

average yearly job creation

 
 

Job creation 2017-23

By type of firm

Bubble_Chart_Analysis_Job_creation_growth_Multi_Reportl_Type of firm_1110_250326_animated

Note: In the 'By type of firm' analysis, the Venture, Growth, Generalist and Buyout categories refer to the type of private equity firm. In the 'By portfolio company stage' analysis, the categories Venture, Growth and Buyout refer to the portfolio company stage. Although the category names are the same, the underlying data points are not comparable.


Icon_Magnifying_Glass_200pxBy type of firm, Venture had the highest average yearly job creation rate between 2017-2023 (16.7%), although Buyout, followed by Generalist firms supported the highest number of jobs in absolute terms (257,001 and 209,066 jobs respectively).

 
 

Job creation 2017-23

By portfolio company stage

Bubble_Chart_Analysis_Job_creation_growth_Multi_Company stage_1110_250326_animated


Icon_Magnifying_Glass_200pxAverage yearly job creation between 2017-2023 by portfolio company stage shows the same trend as the one by firm: venture was the stage that grew the most on average (13.9%), but buyout companies created the most jobs in absolute terms (235,324 jobs).

 
 

Job creation 2017-23

By portfolio company sector

Bubble_Chart_Analysis_Job_creation_growth_Multi_Reportl_Sector_1110_250326_animated

Note: In this analysis, we excluded sectors for which the number of portfolio companies was low (under 100 companies).


Icon_Magnifying_Glass_200pxFrom the end of 2017 to the end of 2023, companies in all sectors recorded net employment growth. During this period the highest average yearly job creation rate was in ICT (+11.2%), which also saw the largest change in terms of totals (+108,844 net jobs created in the period).

 
 

Job creation 2017-23

By portfolio company region

Bubble_Chart_Analysis_Job_creation_growth_Multi_Region_1110_250407_animated
 


Icon_Magnifying_Glass_200pxThroughout the period the Nordics have seen the highest average yearly job creation rate (+5.7%). UK & Ireland & CEE followed with 4.8% and 4.5% respectively. France & Benelux saw the highest number of total net jobs created (178,782).

 

It is clear that the majority of companies remained in the same size category over the time period. However, it is also notable that more companies moved into a higher size category than moved down to a lower one.

Specifically, 31% of companies went up to a higher category from 2017-2023, while only 5% went to a lower category.

 

Change in size category 2017-23

By size category in 2017*

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* Size of bars represents percentage of companies within each size bracket

 
 

SME job creation 2017-2023

By portfolio company size bracket in 2017

Bubble_ChartBubble_Chart_Analysis_Job_creation_growth_SME company size_Reportl_1110_250327_animated

Note: In this section, the sample of SME portfolio companies is different to that seen in the main body of the report. Here, 2,385 European SMEs are under study.


Icon_Magnifying_Glass_200pxFrom the end of 2017 to the end of 2023 all size brackets saw quite significant levels of average yearly job creation rates, the highest being seen in the 0-49 size category (+20.5%). The highest total job creation was seen also in this category, with 53,023 net jobs created.

 
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