About private equity

How private equity invests in privately-owned businesses, supports jobs and creates prosperity.


Login to access your exclusive member-only content and account information.


Not a member? Join us

  • Operate to the highest level of professional standards
  • Access authoritative industry research and data
  • Navigate the complex EU regulatory environment
  • Network and engage with industry leaders
News & opinion

EU leaders reaffirm commitment to innovation

25 Oct 2013

EU leaders met in Brussels today for a European Council that debated closer banking union, the digital economy, innovation and Europe’s economic recovery. Heads of state and governments agreed that there are signs growth is returning to Europe but rightly stressed the need for initiatives to boost innovation, research, productivity and job creation – all areas where private equity and venture capital can make a significant contribution.

The Council’s conclusions noted that “Member States that have continued to invest in research and innovation have fared better in the current crisis than those who have not…investment in research and innovation fuels productivity and growth and is key for job creation.”

These statements won’t have come as much of a surprise to those active in European private equity and venture capital as academic research shows that private equity and venture capital drives innovation, productivity and competitiveness in the businesses it backs.

Venture capital – one part of private equity – has a business model based on identifying and supporting innovative start-up business. By providing investment and expertise it helps these businesses take the next step, and as these businesses get bigger they have a beneficial effect on both local and European economies.  Venture can grow an SME into a global business. A great example of this is Skype, which began life as one man’s idea in Estonia and is now a truly global giant.

An independent study by Frontier Economics, commissioned by Invest Europe, found that private-equity backed companies are better at managing and commercialising innovation than their peers.

Private equity backed companies account for up to 12 percent of all industrial innovation and for eight percent of all industrial spending on research and development – punching well above their weight when you consider that they represent less than six percent of total private sector employment in Europe.

Frontier Economics estimate that the total economic value of patents granted to private equity backed companies in Europe over five years to 2011 is worth up to 350 billion euros to the European economy.

In biotechnology, private equity backed companies are nine times more likely to create patents and their productivity is boosted by 4.5 percent to 8.5 percent during the first three years after investment. You can read more about the study here.

These are contributions that European private equity and venture capital is already making, but well-designed EU public policy could increase this significantly.  Or, if badly-designed, impede private equity’s contribution.

The Council’s commitment to  the Horizon 2020 strategy, which Invest Europe supports, is good news for Europe’s start-ups. But we now need EU leaders to be prepared to back new ways of encouraging venture investment, such as the Funds-of Funds proposal – a series of proposed public/private partnerships which aim to draw more private money into the European venture.

And all the European institutions – not just the European Council – have to be conscious of the risk that other regulation – particularly in financial regulation – could have unintended consequences for private equity and by extension its ability to drive innovation.

Solvency II, for example, which could force insurers to hold excessive amounts of capital and discourage them from investing in long-term assets like private equity funds (read more here). Or measures on the structure of banking which risk stifling investment into the sector and cutting off the innovation it can offer.

Invest Europe continues to speak with all European policymakers on these important issues but it’s  encouraging for the future that Europe’s leaders recognise the importance of innovation for entrepreneurship, job creation and the economic recovery.

Michael Collins, Deputy Chief Executive and Public Affairs Director, EVCA

Want to discuss?

We are always keen to hear from you.


What can I do to manage cookies stored on my computer or phone?

You can accept or refuse cookies. Accepting cookies is usually the best way to make sure you get the best from a website.

Most PCs automatically accept them but you can change your browser settings to restrict, block or delete cookies if you want. Each browser is different, so check the 'Help' menu of your particular browser (or your mobile phone's handset manual) to learn how to change your cookie preferences. Many browsers have universal privacy settings for you to choose from.

Help on how to set and customise your cookie settings for your browser

How to manage cookies in Internet Explorer

Cookie settings in most versions of Internet Explorer can be found by clicking the tools option and then the privacy tab.

How to manage cookies in Firefox

Cookie settings in Firefox are managed in the Options window's Privacy panel. See Options window - Privacy Panel for information on these settings.

How to manage cookies in Chrome

Click on the spanner icon on the toolbar, select settings, click the under the bonnet tab, click on content settings in the privacy section.

How to manage cookies in Opera 

You can manage cookies in Opera if you Click on settings, then Preferences, then Advanced and finally Cookies

How to manage cookies in Safari

Choose Safari, then preferences and then click security. You should then be able to specify if and when Safari should accept cookies.

To manage cookies on your mobile phone please consult your manual or handbook.

Get more help about how cookies work with specific browsers.

What happens if I don't accept cookies?

If you decline cookies, some aspects of Invest Europe site may not work on your computer or mobile phone and you may not be able to access areas you want on the website. For this reason we recommend that you accept cookies.

What happens if I delete my cookies?

If you delete all your cookies you will have to update your preferences with us again and some aspects of our site may not work.

What happens if I change computers or mobile?

If you use a different device, computer profile or browser you will have to tell us your preferences again.

If you'd like to learn more about cookies in general and how to manage them, visit aboutcookies.org.

We can't be responsible for the content of external websites.

Opt-out of cookies


Join today

This is for members only. To view in full login or join Invest Europe today.