Invest Europe | Private Equity at Work

Multi-year trend

2017-2024

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, rising 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 2017-2024.

Job creation

Even during challenging years, the average growth in portfolio companies backed throughout the period reached almost 4%, i.e. a net total of 447,515 jobs were created by the companies under study.

In the chart opposite, the impact of COVID-19 is clearly visible: between 2019 and 2020, job growth slowed to 1.3%. Job creation then improved over the next three years as activity normalized. The newly available data show that job growth in 2024 is again 1.3%, signalling a renewed moderation in hiring among PE- and VC-backed companies. While the figure matches the pandemic period, the underlying drivers are different. In 2024, job growth in private-market-backed businesses was more constrained by macroeconomic and financial conditions: the cost of capital remained elevated and financing conditions restrictive for much of the year (even though the ECB began cutting rates in 2024). In addition, private markets continued to face a challenging exit and valuation environment and geopolitical tensions added uncertainty and risk aversion.

Note: In this section, the sample of portfolio companies is different to that seen in the main body of the report. Here, 2,477 European portfolio companies are under study.

See Methodology section for full analysis

Job creation 2017-24

By portfolio company stage – Individual years

+447,515

net jobs created 2017–2024

+3.8%

average yearly job creation

Job creation 2017-24

By type of firm

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.

By type of firm, Venture had the highest average yearly job creation rate between 2017-2024 (15.3%), although Buyout, followed by Generalist firms supported the highest amounts of job creation in absolute terms (227,357 and 225,952 jobs respectively).

Job creation 2017-24

By portfolio company stage

Average yearly job creation between 2017-2024 by portfolio company stage shows the same trend as the one by firm: venture was the stage that grew the most on average (12.9%), but buyout companies created the most jobs in absolute terms (214,317 jobs).

Job creation 2017-24

By portfolio company sector

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

From the end of 2017 to the end of 2024, companies in all sectors recorded net employment growth. During this period the highest average yearly job creation rate was in ICT (+9.9%), which also saw the largest change in terms of totals (+98,603 net jobs created in the period).

Job creation 2017-24

By portfolio company region

Throughout the period the UK & Ireland have seen the highest average yearly job creation rate (+4.9%). CEE and Nordics both followed with 4.6%. France & Benelux saw the highest number of total net jobs created (178,448).

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, 37% of companies went up to a higher category from 2017-2024, while only 5% went to a lower category.

Change in size category 2017-24

By size category in 2017*

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

SME job creation 2017-2024

By portfolio company size bracket in 2017

Note: In this section, the sample of SME portfolio companies is different to that seen in the main body of the report. Here, 1,922 European SMEs are under study.

From the end of 2017 to the end of 2024 all size brackets saw quite significant levels of average yearly job creation rates, the highest being seen in the 0-49 size category (+19.7%). The highest total job creation was seen also in this category, with 50,949 net jobs created.

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