Investing in Europe: Private Equity activity 2019 Investing in Europe: Private Equity activity 2019
Disclaimer The information contained in this report has been produced by Invest Europe, based on data collected as part of the European Data Cooperative (EDC) and other third-party information. While Invest Europe has made every effort to ensure the reliability of the data included in this report, Invest Europe cannot guarantee the accuracy of the information collected and presented. Therefore, Invest Europe cannot accept responsibility for any decision made or action taken based upon this report or the information provided herein. This presentation is for the exclusive use of the persons to whom it is addressed and is intended for general information purposes only. It is not intended to constitute legal or other professional advice and should not be treated as such. Appropriate legal advice must be sought before making any decision, taking any action or refraining from taking any action in reliance on the information contained in this presentation. Invest Europe does not assume any responsibility for any person’s reliance upon the information contained herein. In furnishing this presentation, Invest Europe undertakes no obligation to provide any additional information or to update this presentation or any additional information or to correct any inaccuracies which may become apparent. Unless otherwise specified, this presentation is confidential and may not be distributed, published, reproduced or disclosed to any other person or used for any other purpose, without the written permission of Invest Europe.
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Version Presentation as of 20/05/2020
www.investeurope.eu/research 2 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Introduction to Invest Europe
>Invest Europe is the association representing Europe’s private equity, venture capital and Invest Europe is the infrastructure sectors, as well as their investors. >Our members take a long-term approach to investing in privately held companies, from start- voice of investors ups to established firms. They inject not only capital but dynamism, innovation and expertise. This commitment helps deliver strong and sustainable growth, resulting in healthy in privately held returns for Europe’s leading pension funds and insurers, to the benefit of the millions of companies in Europe European citizens who depend on them. >Invest Europe aims to make a constructive contribution to policy affecting private capital investment in Europe. We provide information to the public on our members’ role in the economy. Our research provides the most authoritative source of data on trends and developments in our industry. >Invest Europe is the guardian of the industry’s professional standards, demanding accountability, good governance and transparency from our members. >Invest Europe is a non-profit organisation with 25 employees in Brussels, Belgium. >For more information please visit www.investeurope.eu
www.investeurope.eu/research 3 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
European Data Cooperative What is the EDC?
>The European Data Cooperative (EDC) is a joint initiative developed by Invest Europe and its The EDC is the national association partners to collect Europe-wide industry activity on fundraising, investments and divestments. most comprehensive >The EDC serves as the single data entry point for members of private equity and venture database of European capital associations and other contributors across Europe. >The EDC platform is jointly owned and operated by the private equity and venture capital private equity and associations across Europe. >Using one platform with a standardised methodology allows us to have consistent, robust pan- venture capital European statistics that are comparable across the region. >As a result we produce the most comprehensive overview of Europe’s private equity and statistics venture capital markets available, allowing us to better inform fund managers, investors, policymakers, regulators and other stakeholders. >These efforts enhance Invest Europe’s goal to be the most trusted and comprehensive source of European private equity and venture capital market data.
www.investeurope.eu/research 4 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
European Data Cooperative What is the EDC?
>The EDC replaces Invest Europe’s previous database PEREP_Analytics. All relevant historic data was migrated to the EDC system. The EDC database brings together: >All data since 2007 was restated and complemented with additional information. Audit efforts are conducted in close coordination with data contributors and partnering national associations to ensure the best coverage and consistent application of methodology and definitions. 3,400 9,500 >Improved coverage on a regional level mostly impacts the number of companies reported Firms Funds compared to earlier publications. Extensive audit efforts ensure that syndicated investments are not double-counted. >Invest Europe processes all available information at the time of the data collection cut-off to 75,000 280,000 produce its annual statistics. Any differences between Invest Europe’s statistics and those of Portfolio companies Transactions other associations partnering in the EDC may be related to different reporting approaches, restatements and timing of data collection cut-offs. >The most recent data publications are always available on Invest Europe’s website (www.investeurope.eu/research) or by contacting the research team With data on more than ([email protected]). 1,400 European private >Invest Europe members and data contributors are eligible to receive dedicated research and equity and venture capital data support from our research team. Please contact us at [email protected] to find out more about how to use this service. firms, the 2019 statistics cover 86% of the €782bn in capital under management in Europe. www.investeurope.eu/research 5 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
What’s inside?
FOREWORD 7 FUNDRAISING INVESTMENTS DIVESTMENTS EXECUTIVE SUMMARY 9 AT A GLANCE 12 AT A GLANCE 37 AT A GLANCE 63 METHODOLOGY & GLOSSARY 75 INCREMENTAL FUNDRAISING BY INVESTMENT STAGE BY EXIT ROUTE 65 ACKNOWLEDGEMENTS 80 BY FUND STAGE FOCUS 14 ALL PRIVATE EQUITY 39 BY SECTOR 68 ABOUT INVEST EUROPE RESEARCH 82 CONCENTRATION OF CAPITAL 16 BUYOUT BY EQUITY BRACKET 42 BY REGION 73 FIRST-TIME & FOLLOW-ON FUNDS 17 BY GEOGRAPHY 44 HOLDING PERIOD 74 BY REGION OF MANAGEMENT 19 INVESTMENTS AS % OF GDP INVESTORS BY TYPE 21 LOCATION OF THE PE FIRM 49 INVESTORS BY GEOGRAPHY 26 LOCATION OF THE PORTFOLIO 54 FINAL CLOSING COMPANY
BY FUND STAGE FOCUS 29 BY SECTOR 58 CONCENTRATION OF CAPITAL 31 INVESTMENTS IN SMES 61 MEDIAN AND INTERQUARTILE 32
www.investeurope.eu/research 6 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Foreword
It is no exaggeration to state that the decade And so, we’re proud to share with you from 2009 to 2019 was unprecedented for the ‘Investing in Europe: Private Equity activity private equity sector in Europe, in terms of 2019’, which reveals record levels of private growth, jobs, value creation and returns for equity fundraising and investment, investors. Today, we recognise that an underscoring Europe’s attractiveness and unparalleled pandemic has obliged all of us unique positioning for the private equity within the private equity sector to turn the sector. page on what was our before, and together Total fundraising in Europe in 2019 climbed begin work on a new chapter and challenge. to €109 billion, up 6% from 2018 and the Where 2009 marked reconstruction following highest total over the past decade. In parallel, a financial crisis, 2020 presents itself squarely the total equity amount invested in European Eric de Montgolfier, CEO, Invest Europe as an economic crisis - one which leaves no- companies increased 10% year-on-year to one untouched. €94 billion in 2019 - the highest level of We continue to recognise the distinctive investment ever recorded - with continued strengths of our sector: its ability to fuel concentration across three sectors: ICT (27%), Private equity’s mainstream innovation, feed entrepreneurship and grow consumer goods & services (23%) and business position within the European ideas, people and companies where others products & services (19%). will not, and dare not. Private equity’s economy must also yield an Small and medium-sized enterprises (SMEs) mainstream position within the European are the backbone of the European economy understanding and recognition economy must also yield an understanding and and private equity’s overwhelming focus on, recognition of our critical role in safeguarding of our critical role in and funding of, SMEs reaffirms the sector’s Europe’s long-term future - through the safeguarding Europe’s commitment to Europe’s economic engine. confidence of institutional investors and in the long-term future... form of protecting and bettering the pensions of millions of Europeans.
www.investeurope.eu/research 7 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Over the 2015-2019 period, over 22,000 SMEs crisis, venture capital-backed businesses and European country and a mere 8% from outside across Europe have been backed by private their investors are better equipped to handle Europe. equity and venture capital funds, making up crises. By its very nature, private equity has always almost 85% of the portfolio companies. And Pension funds and insurance companies, sought to unlock potential through patient the amount committed to private equity funds including Europe’s largest institutional capital and vibrant, active ownership raising under €1 billion over the 2015-2019 investors, make up some 40% of the private resulting in growth and jobs. These qualities, period increased by a dramatic 50% - equity funding raised in Europe in the 2015- if supported by adequate liquidity and noteworthy given their focus on SMEs and 2019 period, a clear indication of confidence employment-support measures provided by start-ups. in an asset class that directly contributes to state aid programmes, will ensure the private Identifying and nurturing start-ups today is better pensions and returns for Europe’s equity sector and the 26,000 companies essential for continued innovation in Europe, citizens. Over the same period, pension funds (since 2015) it backs, stand ready to jump- as well as laying the groundwork for a better have invested €114 billion in European start the European economy. And it will do tomorrow, as displayed by the €15 billion in private equity/venture capital funds - a clear so in solidarity with the entire coalition of venture capital fundraising in 2019 - a 17% endorsement of their long-term contribution European stakeholders required to overcome increase over 2018 that also marks the 7th and Europe’s leadership position on the current pandemic. consecutive year of growth. Environment, Social and Corporate Governance (ESG). Venture capital investments more than doubled between 2016 and 2019, with backing More than 45% of the private equity capital for almost 4,700 companies in 2019 alone; raised across the continent in 2019 came from examples of innovative sectors backed by non-European investors, led by investors from Eric de Montgolfier venture capital include Biotech/Healthcare North America (28%). Ensuring private equity’s CEO, Invest Europe and ICT, both of which contribute significantly contribution to the European economic to the battle against the COVID-19 pandemic. recovery is supported by private equity and And thanks to an increase in average venture venture capital’s focus on the region, with capital fund size since the 2008 financial 63% invested domestically, 29% in another www.investeurope.eu/research 8 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Executive Summary
FUNDRAISING INVESTMENTS DIVESTMENTS Total fundraising in Europe during 2019 reached The total equity amount invested in European Divestments at cost in 2019 are down 16% from the €109bn, growth of 6% from 2018 and the highest companies increased 10% year-on-year to €94bn in year before to €31bn. Further, all of the previous six total of the past decade. 578 funds raised capital 2019, the highest level ever recorded. 7,902 years have seen higher divestment totals. 3,533 during the year, 4% above the average of the companies were invested into, 8% above the average European companies were exited during the year, an previous five years. for the previous five years, 84% of which were SMEs. 11% decrease from 2018. Pension funds provided 29% of funds, followed by fund Most of the equity invested (63%) was domestic (within The main exit route by amount was sale to another of funds & other asset managers (19%), and family the country). Investments were concentrated in three private equity firm (34%), and by number of companies offices & private individuals (13%). North America main sectors: ICT (27%), consumer goods & services was repayment of preference shares / loans or provided the most capital raised (28%), followed by (23%), and business products & services (19%). mezzanine (38%). By country of portfolio company, France & Benelux (26%). Buyout investments increased 8% year-on-year to France & Benelux were the principal markets (38% of Buyout fundraising increased 15% year-on-year to €79bn €65bn. Mid-market buyout (€15 - €150m) continued to total divested). in 2019. Capital from outside of Europe remained an receive the most investment within the broader buyout Buyout divestments saw a reduction of 8% year-on-year important source (55%), whilst France & Benelux were investment stage (36%). By sector, consumer goods & to €23bn in 2019. 819 companies were divested, down key within Europe (21%). Total fundraising for buyout services received most buyout investment (25%). 11% from 2018. The main exit route by amount was sale funds reaching final closing hit a record €75bn. Venture capital investment reached €11bn in 2019, 19% to another private equity firm (39%), and by number of Venture fundraising reached €15bn in 2019, 17% growth growth from 2018. Venture capital funds backed about companies was trade sale (24%). Business products & from 2018. The top three sources of funds were 60% of the total number of companies invested into. services was the sector with most exits by number of government agencies (20%), family offices & private Start-up investments reached €6bn, a 13% increase companies (31%). individuals (19%), and corporate investors (14%). France from 2018, taking 56% of total venture capital Venture divestments increased 10% year-on-year to & Benelux continued as the principle source of capital investment. By sector, ICT is key (half of Venture €3bn, the highest total since 2011. 1,242 companies (36%). capital investment). were divested, a 5% decrease from 2018. The main exit Growth saw an 11% drop year-on-year to €9bn, though Growth investments grew 15% year-on-year to €16bn in route by amount was by trade sale (34%), and by the figure for 2019 remained about 50% above the 2019. The number of companies invested into dropped number of companies was through repayment of average for the previous five years, and the per fund 18% to 1,857, leading to the highest level of investment preference shares / loans or mezzanine (33%). 36% of amount of capital raised remained in line with recent per company ever recorded. ICT received the highest exited companies were in ICT. history. level of investment (36%). Growth divestments were €5bn in 2019, a reduction of 38% year-on-year. 1,530 companies were divested. The main exit route was repayment of preference shares / loans or mezzanine, both by amount (26%) and number of companies (47%). Companies in the business products and services sector saw most exits (26%). www.investeurope.eu/research 9 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Overview - All Private Equity - Fundraising, Investments & Divestments 1997–2019 - Industry statistics - Amount
FUNDRAISING INVESTMENTS DIVESTMENTS
120 120 120 112 109
103 € billion € 100 97 100 95 100
85 83 84 81 79 80 80 77 80 72 71
61 60 61 57 57 60 55 60 60 50 49 48 48 47 46 46 44 46 42 44 40 40 37 37 38 40 40 35 40 37 33 33 29 30 29 28 27 27 29 28 27 25 26 25 24 26 22 20 20 21 20 16 16 20 20 14 20 14 12 11 10 9 9 6 7
- - -
Invest Europe statistics explained: This graph shows ‘industry statistics’ capturing activity by private equity firms’ European offices. In the following presentation most statistics on investments and divestments are reported as ‘market statistics’. These capture activity based on the location of portfolio companies in Europe. This data is available from 2007. Source: Invest Europe / Thomson Reuters (1997-2006) & Invest Europe / EDC (2007-2019) www.investeurope.eu/research 10 Investing in Europe: Private Equity activity 2019
ACTIVITY 2019 FUNDRAISING
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Fundraising at a glance 2019 - Analysis
> Total fundraising in Europe during 2019 reached €109bn, growth of 6% from 2018. This is the All Private Equity highest total of the past decade, and continues the upward trend observed in the industry since 2012. 578 funds raised capital during the year, 4% above the average number of funds over the Amount raised by funds €109bn 578 previous five years. Final closing €97bn by 229 funds > Pension funds provided 29% of funds raised, followed by fund of funds & other asset managers (19%), and family offices & private individuals (13%). North America accounted for the highest proportion of fundraising (28%), followed by France & Benelux (26%). Venture Capital > Funds that reached final closing during 2019 raised a median of €92m, the highest level ever Amount raised €15bn by 246 funds recorded. Half of these funds raised an amount around this median (in a range of €25m - €241m), whilst several funds raised considerably more (indicating a positively skewed distribution). Final closing €10bn by 105 funds > Venture fundraising reached €15bn in 2019, this is 17% growth from 2018 and means a seven-year run of year-on-year increases. Funds focusing on all stages of Venture continued to raise the Buyout majority (60%). 52% of capital raised went to first-time funds, the rest to follow-on funds. The top three sources of funds were government agencies (20%), family offices & private individuals (19%), Amount raised €79bn by 119 funds and corporate investors (14%). The France & Benelux region continued to be the principle source of capital (36%), followed by DACH (18%). Final closing by funds €75bn 74 > Buyout fundraising increased to €79bn in 2019, up 15% from 2018. The majority (91%) went to follow-on funds (the remainder to first-time funds). Pension funds provided the most capital (34%), followed by fund of funds & other asset managers (19%), and insurance companies (12%). Capital Growth from outside of Europe remained an important source (55%) whilst France & Benelux were key within Europe (21%). Total fundraising for buyout funds reaching final closing hit €75bn in 2019, a Amount raised €9bn by 104 funds continuation of the upward trajectory of the recent past. Final closing €9bn by 27 funds > Growth saw an 11% drop year-on-year to €9bn, though the figure for 2019 remained about 50% above the average for the previous five years, and the per fund amount of capital raised remained in line with recent history. Family offices & private individuals provided the most capital for the Note: Amount raised represents incremental amounts raised year (24%), followed by pension funds (21%) and fund of funds & other asset managers (20%). Final closing represents cumulative amount raised www.investeurope.eu/research 12 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Fundraising at a glance 2007-2019 – Europe - Incremental amount raised during the year – € billion
€109.3bn €102.9bn 6.3 €96.6bn 0.5 11.0 9.0 5.3 1.0 0.8 €82.7bn €84.1bn €80.8bn 7.4 10.1 6.8 6.8 0.8 11.8 3.0 0.9 4.8 4.3 €60.8bn 2.3 €57.0bn €54.7bn 5.7 0.4 78.8 5.9 8.3 7.8 €40.1bn 3.8 1.6 3.4 72.7 68.3 3.3 65.9 62.7 7.1 54.6 €28.5bn 2.7 €25.9bn 2.0 €21.2bn 3.5 44.1 7.3 1.6 1.6 38.0 33.5 5.7 0.7 0.6 2.9 23.9 1.1 17.8 10.4 11.6 14.8 9.1 10.3 12.6 7.9 6.2 3.5 3.5 4.5 4.0 4.7 5.2 6.7 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Venture Capital Buyout Growth Mezzanine Generalist
Source: Invest Europe / EDC. Note: Buyout includes rescue/ turnaround and replacement capital funds www.investeurope.eu/research 13 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Funds raised by fund stage focus 2015-2019 - Incremental amount raised during the year
16 Total Venture Capital 90 Venture (all stages) 14.8 Later-stage 78.8
14 Early-stage 80
€ billion € € billion € 12.6 72.7 70 68.3 12 62.7 11.0 10.3 60 8.8 10.1 10 9.1 5.9 9.0 50 7.8 8 7.4 6.7 6.8 40 7.0 6.3 5.3 33.5 6 2.1 5.3 1.5 4.8 30 3.7 4 0.4 3.3 3.4 20 0.7 1.1 2 4.6 4.4 3.4 1.0 10 2.5 0.8 0.8 1.8 0.5 0 0 Venture Capital Growth Mezzanine Generalist Buyout
2015 2016 2017 2018 2019 Source: Invest Europe / EDC www.investeurope.eu/research 14 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Funds raised by fund stage focus 2015-2019 - Number of funds that reached first, intermediate or final closing during the year
300 Total Venture Capital 300 Venture (all stages) Later-stage 261 Early-stage 246
250 250 Number of funds of Number
203 funds of Number 200 134 200 171 131 160
150 150 150 150 124 135 134 129 128 130 121 119 109 15 107 102 104 104 104 100 38 100 76 15 60 5 5 112 50 50 77 64 53 57 11 8 6 8 5 0 0 Venture Capital Growth Mezzanine Generalist Buyout
2015 2016 2017 2018 2019 Source: Invest Europe / EDC www.investeurope.eu/research 15 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Concentration of capital 2015-2019 - Incremental fundraising by amount bracket per fund during the year
60% 17 Number of 18 10 14 funds 50%
11 40%
30%
34
% total amount of annual fundraising annual of amount total % 20% 83 388 40 83 23 20 47 61 18 14 382 31 463 502 446 10% 28 70 5 22
0% 2015 2016 2017 2018 2019 < €100m €100m - €250m €250m - €500m €500m - €1bn > €1bn Source: Invest Europe / EDC www.investeurope.eu/research 16 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity – Funds raised by first-time fund and follow-on fund 2015-2019 - Incremental amount raised during the year
Fundraising 16 90
Follow-on fund
14 80 € billion € First-time fund billion € 70 12 7.1 60 10 50 8.1 8 4.9 4.2 71.7 7.3 3.6 40 66.1 4.8 62.7 55.8 6 3.1 5.3 30 4.1 3.4 4.9 4 7.7 1.8 3.8 20 27.5 6.0 5.4 5.4 1.8 4.3 4.4 4.3 0.5 2 2.9 0.4 0.4 3.7 10 2.6 2.9 0.5 0.3 3.0 0.4 0.4 2.4 1.5 1.9 1.5 0.2 6.1 6.9 6.6 5.6 7.1 0 0.5 0 Venture Capital Growth Mezzanine Generalist Buyout
2015 2016 2017 2018 2019 Source: Invest Europe / EDC www.investeurope.eu/research 17 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity – Funds raised by first-time fund and follow-on fund 2015-2019 - Number of funds that reached first, intermediate or final closing during the year
Fundraising 275 275
250 Follow-on fund 250 First-time fund 225 225
Number of funds of Number 200 125 Number of funds of Number 200 113 175 175
95 150 150
125 90 80 125
100 100 76 71 115 118 47 106 101 100 74 75 75 60 80 136 133 73 75 37 50 108 50 80 81 38 57 57 2 6 25 53 2 4 25 47 47 39 2 39 6 4 5 35 32 29 29 31 29 34 22 4 3 0 0 Venture Capital Growth Mezzanine Generalist Buyout
2015 2016 2017 2018 2019 Source: Invest Europe / EDC www.investeurope.eu/research 18 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Funds raised by region of management 2015-2019 - Incremental amount raised during the year – € billion
€109.3bn 1.4 €102.9bn 1.4 4.6 €96.6bn 1.5 5.9 5.4 €84.1bn 28.2 0.8 23.3 4.5 26.1 6.0 20.3 14.1 8.0 €54.7bn 0.4 8.5 6.1 7.3 3.7 3.8 7.7 14.5
8.5 61.2 3.4 48.6 47.3 50.9
24.4
2015 2016 2017 2018 2019 UK & Ireland DACH Nordics France & Benelux Southern Europe CEE Source: Invest Europe / EDC www.investeurope.eu/research 19 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Funds raised by region of management and investor type 2019 - Incremental amount raised during the year - % of total amount
100% 1% 3% 6% 6% 0% 6% 4% 10% 1% 5% 18% 2% 0% 90% 8% 7% 1% 0% 9% 6% 17% 0%2% 20% 80% 3% 10% 23% Academic inst./ Endowment / Foundation 70% 21% 15% 2% Banks 15% 60% 12% Capital markets 35% Corporate investors
50% 20% 27% 26% 12% Family offices & Private individuals Fund of funds & Other asset managers 40% Government agencies 42% 11% 6% 9% 30% Insurance companies 20% 8% Pension funds 11% 12% 39% 20% Sovereign wealth funds 5% 15% 10% 15% 12% 0% 13% 11% 5% 0% 5% 4% 0% 3% 1% 0% UK & Ireland DACH Nordics France & Southern Europe CEE Benelux Source: Invest Europe / EDC DACH: Austria, Germany, Switzerland / Southern Europe: Greece, Italy, Portugal, Spain / Nordics: Denmark, Finland, Norway, Sweden / CEE: Central Eastern Europe www.investeurope.eu/research 20 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Funds raised by type of investor 2019 - Incremental amount raised during the year - % of total amount
All Private Equity Venture Capital funds Buyout funds Growth funds (578 funds, 392 firms) (246 funds, 191 firms) (119 funds, 100 firms) (104 funds, 75 firms)
Academic institutions 0% 0% 0% 0%
Banks 5% 4% 4% 8%
Capital markets 1% 0% 2% 0%
Corporate investors 2% 14% 1% 2%
Endowments and foundations 5% 5% 5% 1%
Family offices 6% 7% 5% 7%
Fund of funds 13% 10% 13% 17%
Government agencies 6% 20% 3% 12%
Insurance companies 11% 11% 12% 8%
Other asset managers 6% 4% 6% 3%
Pension funds 29% 12% 34% 21%
Private individuals 7% 12% 4% 17%
Sovereign wealth funds 9% 1% 11% 3%
Source: Invest Europe / EDC www.investeurope.eu/research 21 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Funds raised by type of investor 2015-2019 - Incremental amount raised during the year - % of total amount
40% 120
Academic inst. Endowments / Foundations 35% €109bn €103bn 100 Banks €97bn 30% Capital markets
€84bn 80 Corporate investors 25% Family offices & Private individuals
20% 60 Fund of funds & Other asset managers
€55bn Government agencies 15% 40 Insurance companies 10% Pension funds 20 Sovereign wealth funds 5%
New funds raised (excluding capital gains) 0% 0 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 22 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Venture Capital - Funds raised by type of investor 2015-2019 - Incremental amount raised during the year - % of total amount
30% 16
Academic inst. Endowments / Foundations €15bn 14 25% Banks
€13bn 12 Capital markets
20% Corporate investors 10 €10bn Family offices & Private individuals €9bn 15% 8 Fund of funds & Other asset managers
Government agencies €7bn 6 10% Insurance companies 4 Pension funds 5% Sovereign wealth funds 2
New funds raised (excluding capital gains) 0% 0 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 23 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Buyout - Funds raised by type of investor 2015-2019 - Incremental amount raised during the year - % of total amount
45% 80 €79bn Academic inst. Endowments / Foundations 40% €73bn 70 €68bn Banks 35% €63bn 60 Capital markets
30% Corporate investors 50 25% Family offices & Private individuals 40 Fund of funds & Other asset managers 20% Government agencies €33bn 30 15% Insurance companies 20 10% Pension funds
Sovereign wealth funds 5% 10 New funds raised (excluding capital gains) 0% 0 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 24 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Growth - Funds raised by type of investor 2015-2019 - Incremental amount raised during the year - % of total amount
60%
10 Academic inst. Endowments / Foundations €10bn 50% Banks €9bn 8 Capital markets 40% Corporate investors €7bn Family offices & Private individuals 6 30% Fund of funds & Other asset managers
€5bn Government agencies 4 20% Insurance companies €3bn Pension funds 10% 2 Sovereign wealth funds
New funds raised (excluding capital gains) 0% 0 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 25 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Fundraising geographic breakdown 2019 (2018) - Source of funds - % of total amount
3.9% (5.6%) North America 28.0% (25.8%) Australia & Asia 16.1% (14.3%) Rest of the world 1.4% 8.1% (5.2%) (8.3%) 7.5% (7.1%) 1.1% 26.3% (0.9%) (20.5%)
Unclassified Europe 3.9% 3.8% (8.6%) (3.7%) Source: Invest Europe / EDC www.investeurope.eu/research 26 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Venture Capital - Fundraising geographic breakdown 2019 (2018) - Source of funds - % of total amount
8.3% (2.1%) North America 8.8% (15.8%) Australia & Asia 4.9% (3.4%) Rest of the world 0.7% 7.6% (0.3%) (15.1%) 17.7% (10.9%) 4.6% 35.6% (5.2%) (38.5%)
Unclassified Europe 3.4% 8.5% (3.1%) (5.6%) Source: Invest Europe / EDC www.investeurope.eu/research 27 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Buyout - Fundraising geographic breakdown 2019 (2018) - Source of funds - % of total amount
3.5% (6.9%) North America 33.3% (28.4%) Australia & Asia 20.1% (18.7%) Rest of the world 1.6% 8.3% (7.3%) (7.2%) 5.9% (6.8%) 0.6% 20.6% (0.3%) (10.7%)
Unclassified Europe 3.9% 2.1% (12.0%) (1.5%) Source: Invest Europe / EDC www.investeurope.eu/research 28 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing - Funds raised by fund stage focus 2015-2019 - Final closing during the year - Amount(1)
12 Total Venture Capital 80 Venture (all stages) 75.4 72.7 Later-stage
Early-stage € billion € € billion € 9.8 70 10 8.7 8.6 60 55.0 55.8 8 4.7 50 3.0 6.0 5.9 6 40 5.0 5.0 33.1 4.4 1.4 4.2 1.5 30 4 1.5 2.7 4.6 3.1 3.2 2.8 2.6 2.7 20 2.3 1.2 0.3 2 4.4 3.6 10 0.2 0.9 2.1 1.7 0.5 0.4 1.1 0.2 0.1 0 0 Venture Capital Growth Mezzanine Generalist Buyout 2015 2016 2017 2018 2019 Source: Invest Europe / EDC Note: (1) The total amount raised by funds that reached a final closing in the year. Amounts from previous incremental fundraising rounds and years are aggregated to the final amount. www.investeurope.eu/research 29 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing - Funds raised by fund stage focus 2015-2019 - Final closing during the year – Number of funds(1)
120 Total Venture Capital 120 Venture (all stages) Later-stage 105 105 Early-stage
100 100 Number of funds of Number 42 42 funds of Number 76 80 80 74
62 61 62 60 7 60 50 48 26 34 34 38 38 40 23 34 40 31 29 28 27 28 2 56 23 5 7 21 20 37 14 20 26 22 20 4 2 1 2 2 0 0 Venture Capital Growth Mezzanine Generalist Buyout
Source: Invest Europe / EDC 2015 2016 2017 2018 2019 Note: (1) The number of funds that reached a final closing in the year. Each fund is captured only once, when the full amount has been raised. www.investeurope.eu/research 30 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing - All Private Equity - Concentration of capital 2015-2019 - Final closing during the year - Amount(1) & Number of funds(2)
80% Number of 70% 17 funds 10 16 10 60%
50% 9
40%
30% % total amount of annual fundraising annual of amount total % 22 20% 28 31 27 54 18 56 10% 6 10 13 10 22 40 106 22 78 32 89 122 117 0% 2015 2016 2017 2018 2019 < €100m €100m - €250m €250m - €500m €500m - €1bn > €1bn Source: Invest Europe / EDC Note: (1) The total amount raised by funds that reached a final closing in the year. Amounts from previous incremental fundraising rounds and years are aggregated to the final amount. (2) The number of funds that reached a final closing in the year. Each fund is captured only once, when the full amount has been raised. www.investeurope.eu/research 31 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing - All Private Equity - box-and-whisker plot 2007–2019 - Final closing during the year - Median & Interquartile range
1,000 Upper Whisker 900 Greatest observation
excluding outliers* € million € 800
700 Third Quartile (Q3) 75% of data are ≤ than 600 the upper box value
500 Median 50% of data are ≤ than 400 this value
300 First Quartile (Q1) 25% of data are ≤ than the lower box value 200
100 Lower Whisker - Lowest observation 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 excluding outliers*
1rst Quartile 3rd Quartile Median Source: Invest Europe / EDC * Outliers: observations beyond the upper or lower whisker: data exceeding more (less) than 1.5 interquartile value from Q3 (Q1) www.investeurope.eu/research 32 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing – Venture Capital - box-and-whisker plot 2007–2019 - Final closing during the year - Median & Interquartile range
400 Upper Whisker Greatest observation
350 excluding outliers* € million €
300
Third Quartile (Q3) 250 75% of data are ≤ than the upper box value
200 Median 50% of data are ≤ than this value 150 First Quartile (Q1) 100 25% of data are ≤ than the lower box value
50
Lower Whisker - Lowest observation 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 excluding outliers*
1rst Quartile 3rd Quartile Median Source: Invest Europe / EDC * Outliers: observations beyond the upper or lower whisker: data exceeding more (less) than 1.5 interquartile value from Q3 (Q1) www.investeurope.eu/research 33 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing – Growth - box-and-whisker plot 2007–2019 - Final closing during the year - Median & Interquartile range
1,000 Upper Whisker 900 Greatest observation
excluding outliers* € million € 800
700 Third Quartile (Q3) 75% of data are ≤ than 600 the upper box value
500 Median 50% of data are ≤ than 400 this value
300 First Quartile (Q1) 25% of data are ≤ than the lower box value 200
100 Lower Whisker - Lowest observation 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 excluding outliers*
1rst Quartile 3rd Quartile Median Source: Invest Europe / EDC * Outliers: observations beyond the upper or lower whisker: data exceeding more (less) than 1.5 interquartile value from Q3 (Q1) www.investeurope.eu/research 34 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Final closing – Buyout - box-and-whisker plot 2007–2019 - Final closing during the year - Median & Interquartile range
4,000 Upper Whisker Greatest observation
3,500 excluding outliers* € million €
3,000 Third Quartile (Q3) 2,500 75% of data are ≤ than the upper box value
2,000 Median 50% of data are ≤ than this value 1,500 First Quartile (Q1) 25% of data are ≤ than 1,000 the lower box value
500
Lower Whisker - Lowest observation 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 excluding outliers*
1rst Quartile 3rd Quartile Median Source: Invest Europe / EDC * Outliers: observations beyond the upper or lower whisker: data exceeding more (less) than 1.5 interquartile value from Q3 (Q1) www.investeurope.eu/research 35 Investing in Europe: Private Equity activity 2019
ACTIVITY 2019 INVESTMENTS
www.investeurope.eu/research 36 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments at a glance 2019 Analysis
All Private Equity > The total equity amount invested in European companies increased 10% year-on-year to €94bn in 2019. This is the highest level of investment ever recorded. 7,902 companies received investment, €94bn into 7,902 companies 8% above the average for the previous five years, 84% of which were SMEs. 63% of equity invested was domestic (within the country), 29% was intra-European, and 8% from non-European sources. by 1,426 firms & 2,806 funds Investments (as historically has been the case) were concentrated in three main sectors: ICT (27%), consumer goods & services (23%), and business products & services (19%). > Venture capital investment reached €11bn in 2019. This is 19% growth from the year before and Venture Capital represents uninterrupted growth in the stage since 2013. Venture capital funds backed about 60% of the total number of companies receiving investment, a slight increase from 2018 (98% of these €11bn into 4,696 companies being SMEs). Start-up investments reached €6bn, a 13% increase from 2018, taking 56% of total Venture capital investment. By sector, ICT is key (half of Venture capital investment), followed by by 913 firms & 1,647 funds biotech & healthcare (24%) and consumer goods & services (8%). > Buyout investments increased 8% year-on-year to €65bn (representing 69% of total investment). Mid-market buyout (€15 - €150m) continued to receive the most investment within the broader Buyout buyout investment stage (36%), closely followed by mega buyout (> €300m) at 34%. The mega buyout segment has been subject to record levels of investment between 2017 and 2019. By sector, €65bn into 1,323 companies consumer goods & services received 25% of total buyout investment, followed by business products by 467 firms & 809 funds & services (24%) and ICT (21%). > Growth investments grew 15% year-on-year to €16bn in 2019. The number of companies receiving investment dropped 18% to 1,857, leading to the highest level of investment per company ever recorded. ICT received the highest level of investment (36%), followed by consumer goods & Growth services (17%) and financial & insurance activities (13%). €16bn into 1,857 companies > Private equity continued to be a significant contributor to European GDP. By location of the PE firm, investments represented 0.54% of European GDP in 2019. This is the highest level seen since by 480 firms & 1,010 funds 2008. www.investeurope.eu/research 37 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments at a glance 2007-2019 – Europe – Market statistics – Amount & Number of companies
4,788 4,696 140 Venture 3,848 3,958 3,635 3,664 3,742 3,714 3,407 3,378 3,399 3,526 3,552 4,000 Growth 120 2,130 2,313 2,181 2,136 2,272 1,945 2,019 2,003 2,066 1,857 1,456 1,677 2,000 Buyout 1,381 1,063 1,077 1,083 1,249 1,353 1,323 777 909 1,017 984 938 1,317 100 1,011 €93.9bn 0 €85.0bn 16.1 80 €75.9bn €75.3bn 14.1 -2,000 5.4 Other €59.7bn €58.2bn 11.9 60 €55.7bn -4,000 Growth 9.0 €47.9bn €48.7bn €43.6bn 11.5 €41.3bn €41.2bn 11.4
€ billion Number of companies of Number billion € Buyout 8.1 9.8 64.9 40 60.2 62.4 7.7 6.5 6.8 -6,000 €25.8bn 53.2 Venture Capital 42.7 37.4 39.4 34.1 33.1 20 6.4 29.9 29.3 28.7 -8,000 13.5 10.6 5.6 5.8 4.7 5.0 7.2 8.9 0 3.5 3.5 3.8 3.2 3.6 3.8 -10,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Invest Europe / EDC. Note: Other includes Rescue/Turnaround and Replacement capital www.investeurope.eu/research 38 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by stage 2019 - Market statistics - Amount & Number of companies
Seed Start-up 0.9% 6.4% Later-stage Buyout Seed 15.7% venture Replacement 16.3% 4.0% capital 0.9%
Growth capital Rescue/ 17.2% Turnaround 0.5%
€94bn invested Rescue/ 7,902 European companies in European companies Turnaround invested with Private Equity 0.2% Start-up 34.4% Replacement Growth capital capital 2.2% 22.9% Buyout 69.2%
Later-stage venture 9.3%
Source: Invest Europe / EDC www.investeurope.eu/research 39 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by stage 2015-2019 - Market statistics - Amount
18 70
16 € billion €
€ billion € 60
14 50 12 10.6
10 40 8.9 3.8 64.9 8 7.2 16.1 2.8 30 60.2 14.1 53.2
6 11.4 5.0 11.5 2.6 11.9 4.7 20 37.4 39.4 2.0 4 2.1 6.0 5.3 3.8 10 2 2.3 2.6 2.3 1.8 1.6 2.0 1.2 0.9 0.8 0.8 0.7 0.9 0 0.3 0.6 0.5 0.6 0.3 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital Source: Invest Europe / EDC www.investeurope.eu/research 40 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by stage 2015-2019 - Market statistics – Number of companies
6,000 6,000
4,788 4,696 5,000 5,000
790 758 3,958 3,714 3,552 4,000 4,000
Number of companiesof Number 700
814 772
3,000 3,000 2,779 2,789
2,324 2,000 2,088 2,0002,000 2,274 1,353 1,323 1,500 1,249 2,136 1,077 1,083 2,181 2,272 1,000 2,066 1,857 1,0001,000 1,433 1,273 918 1,108 500 730 103 102 66 102 71 86 57 74 41 71
0 0 0 Number of companiesof Number 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital Source: Invest Europe / EDC www.investeurope.eu/research 41 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Buyout - Investments by equity bracket 2015-2019 - Market statistics - Amount & Number of companies
826 805 100 733 764 900 671 Mega (> €300m) 549 524 90 438 489 334 Large (€150m - €300m) 400 80 44 47 46 52 60 Mid-market (€15m - €150m) 70 18 13 38 35 38 -100 Small (<€15m) 60 22.3 50 20.2 -600 Mega (>€300m) 18.3 40 Large (€150m - €300m) 5.6 14.1 7.7 11.8 -1,100 Mid-market (€15m - €150m) 30 10.2 9.3 € billion Number of companiesof Number billion € 9.9 Small (<€15m) 20 23.6 23.6 -1,600 19.9 21.3 10 15.9
3.8 4.3 4.6 4.9 0 3.6 -2,100 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 42 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Mid-market buyout - Investments by equity bracket 2015-2019 - Market statistics - Amount & Number of companies
417 414 35 396 344 400 Lower mid-market (€15m - €50m) 255 30 Core mid-market (€50m - €100m) 100 200 63 82 81 83 Upper mid-market (€100m - €150m) 45 25 32 25 29 32 0
4.2 5.6 -200 20 3.8 3.1 -400 Upper mid-market (€100m - €150m) 7.1 15 5.6 5.6 4.0 5.9 Core mid-market (€50m - €100m) -600 Lower mid-market (€15m - €50m) 10 4.6
-800 € billion Number of companiesof Number billion € 11.9 12.3 12.4 5 10.9 -1000 7.3
- -1200 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 43 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Geographical investment flows 2019 - Domestic vs. International investments - Amount
Non-European private equity firms investing into portfolio companies in Europe €7.6bn €59.0bn €27.3bn Domestic Cross-border investments investments in European within Europe countries
€9.0bn European private equity firms investing portfolio companies outside Europe
Source: Invest Europe / EDC www.investeurope.eu/research 44 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Venture Capital - Geographical investment flows 2019 - Domestic vs. International investments - Amount
Non-European private equity firms investing into portfolio companies in Europe €1.1bn €6.7bn €2.8bn Domestic Cross-border investments investments in European within Europe countries
€1.4bn European private equity firms investing portfolio companies outside Europe
Source: Invest Europe / EDC www.investeurope.eu/research 45 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Investments by region 2019 - Industry vs. Market statistics - Amount
CEE CEE Nordics 1% 3% 7% Nordics 10% UK & Ireland 25% Southern Europe UK & Ireland 10% 39%
Southern Europe Industry statistics 17% Market statistics Investments according to Investments according to the Private Equity firm’s location the portfolio company’s location DACH 15%
France & Benelux 24% DACH France & Benelux 21% 28%
Source: Invest Europe / EDC DACH: Austria, Germany, Switzerland / Southern Europe: Greece, Italy, Portugal, Spain / Nordics: Denmark, Finland, Norway, Sweden / CEE: Central Eastern Europe www.investeurope.eu/research 46 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by stage and region 2019 - Market statistics - Amount
6 16 14.9 14.4 14.0 14 € billion € 5 € billion € 12.4 12 4 10
3.0 2.8 3 8 2.5 7.2 5.2 1.1 1.1 4.5 6 2 0.8 3.4 1.1 4 1.7 0.9 1 1.5 1.5 1.8 0.4 1.9 0.3 2 0.3 0.6 0.7 0.0 0.5 0.5 0.5 0.1 0.6 0.0 0.3 0.0 0.1 0.0 0.7 0.2 0.0 0.0 0.2 0.2 0.2 0.0 0.1 0.1 0 0.1 0 UK & Ireland France & Benelux DACH Southern Europe Nordics CEE Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Venture Capital Buyout Source: Invest Europe / EDC www.investeurope.eu/research 47 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by stage and region 2019 - Market statistics - Number of companies
1,600
1,330 1,400
252 1,200
1,000 Number of companiesof Number 894 822
157 800 123 627 654 833 104 600 95 600 548
546 950 506 369 400 338 27 400 415 151 214 189 194 200 200 135 308 280 326 214 220 232 202 43 29 9 147 19 13 11 6 2 125 7 78 4 7 2 3 0 48 0 UK & Ireland France & Benelux DACH Southern Europe Nordics CEE Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Venture Capital Buyout Source: Invest Europe / EDC www.investeurope.eu/research 48 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Investments as % of European GDP 2000–2019 - Industry statistics - Location of the private equity firm
0.70%
% of GDP of % 0.60% 0.57% 0.55% 0.54%
0.50% 0.50% 0.46% 0.43%
0.40% 0.38% 0.38% 0.35% 0.36% 0.34% 0.33% 0.31% 0.32% 0.30% 0.30% 0.29% 0.25% 0.26% 0.23% 0.21% 0.20%
0.10%
0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: : IMF, World Economic Outlook Database (GDP) / Thomson Reuters (2000-2006) & Invest Europe / EDC (2007-2019) www.investeurope.eu/research 49 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Investments as % of GDP 2019 - Industry statistics - Location of the private equity firm
4.000%
3.500% 3.361%
% of GDP of % 3.000%
2.500%
2.000% 1.490% 1.500%
1.000%
0.776%
0.717%
0.541%
0.477%
0.458%
0.417%
0.382% 0.362%
0.500% 0.344%
0.253%
0.223%
0.215%
0.082%
0.082%
0.064%
0.061%
0.060%
0.056%
0.054%
0.047%
0.042%
0.024% 0.023% 0.007% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 50 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Venture Capital - Investments as % of GDP 2019 - Industry statistics - Location of the private equity firm
0.300%
0.250% 0.239% % of GDP of %
0.200%
0.150%
0.123%
0.121% 0.095%
0.100% 0.094%
0.077%
0.074%
0.067%
0.064%
0.064%
0.062% 0.054%
0.050% 0.049%
0.034%
0.032%
0.027%
0.022%
0.020%
0.020%
0.020%
0.018%
0.012%
0.009%
0.005%
0.004% 0.003% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 51 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Buyout - Investments as % of GDP 2019 - Industry statistics - Location of the private firm
3.500% 3.048%
3.000% % of GDP of % 2.500%
2.000%
1.500% 1.061%
1.000%
0.627%
0.508% 0.395%
0.500% 0.380%
0.311%
0.305%
0.268%
0.222%
0.181%
0.109%
0.097%
0.094%
0.047%
0.037%
0.036%
0.032%
0.021%
0.005%
0.005%
0.003%
0.000%
0.000% 0.000% 0.000% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 52 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Growth - Investments as % of GDP 2019 - Industry statistics - Location of the private equity firm
0.300% 0.254%
0.250% % of GDP of %
0.200%
0.178% 0.167%
0.150% 0.096%
0.100% 0.087%
0.074%
0.061%
0.056%
0.045% 0.039%
0.050% 0.035%
0.032%
0.028%
0.019%
0.019%
0.019%
0.015%
0.013%
0.009%
0.009%
0.008%
0.006%
0.005%
0.003%
0.001% 0.000% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 53 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Investments as % of GDP 2019 - Market statistics - Location of the portfolio company
1.000% 0.953%
0.890%
0.833% 0.815%
% of GDP of % 0.800%
0.745%
0.685%
0.679% 0.672%
0.600% 0.590%
0.533%
0.470%
0.442% 0.412%
0.400% 0.389%
0.324%
0.307% 0.190%
0.200% 0.189%
0.116%
0.090%
0.089%
0.080%
0.045%
0.030%
0.025% 0.022% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 54 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Venture Capital - Investments as % of GDP 2019 - Market statistics - Location of the portfolio company
0.140% 0.120%
0.120%
% of GDP of % 0.107%
0.100% 0.099%
0.086%
0.083%
0.081% 0.079%
0.080% 0.076%
0.064%
0.060% 0.055%
0.060% 0.054%
0.044% 0.040%
0.040% 0.036%
0.025%
0.020%
0.020%
0.019% 0.014%
0.020% 0.013%
0.011%
0.008%
0.008%
0.007% 0.006% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 55 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Buyout - Investments as % of GDP 2019 - Market statistics - Location of the portfolio company
0.900%
0.800% 0.793%
% of GDP of % 0.694%
0.700% 0.656%
0.633% 0.575%
0.600% 0.561%
0.500%
0.419%
0.391% 0.369%
0.400% 0.368%
0.323% 0.302%
0.300%
0.189% 0.171%
0.200% 0.160%
0.132%
0.101% 0.076%
0.100% 0.054%
0.036%
0.032%
0.019%
0.003%
0.000%
0.000% 0.000% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 56 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Growth - Investments as % of GDP 2019 - Market statistics - Location of the portfolio company
0.300% 0.255%
0.250% % of GDP of %
0.200% 0.186%
0.184% 0.169%
0.150%
0.131%
0.128%
0.127%
0.119%
0.093% 0.092%
0.100% 0.088%
0.064%
0.062%
0.045% 0.044%
0.050% 0.040%
0.032%
0.029%
0.026%
0.022%
0.020%
0.018%
0.012%
0.010%
0.010% 0.000% 0.000%
2019 2015-2019 Annual Average
Source: IMF, World Economic Outlook Database (GDP) / Invest Europe / EDC Note: *Other CEE consists of Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia, Slovakia, Slovenia www.investeurope.eu/research 57 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Investments by sector 2019 - Market statistics - % of Amount & Number of companies
0% 5% 10% 15% 20% 25% 30% 35% 40%
ICT 26.8% 36.0%
Consumer goods & services 22.5% 18.1%
Business products & services 19.0% Amount 14.9% 12.9% Number of companies Biotech & healthcare 15.1%
Financial & insurance activities 8.2% 3.4%
Energy & environment 3.3% 3.5%
Transportation 2.4% 2.1%
Chemicals & materials 2.1% 1.5%
Construction 1.3% 1.8%
Real estate 0.7% 1.2%
Agriculture 0.6% 0.9%
Unclassified 0.2% 1.5%
Source: Invest Europe / EDC www.investeurope.eu/research 58 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by sector 2015-2019 - Market statistics - Amount
All Private Equity Venture Capital 100 12 90 11 80 10
9 € billion € € billion € 70 8 60 7 50 6 40 Transportation 5 30 Real estate 4 3 20 ICT 2 10 Financial & insurance activities 1 0 Energy & environment 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Consumer goods & services Buyout Construction Growth 70 Chemicals & materials 18 Business products & services 60 16 Biotech & healthcare 14 50
€ billion € Agriculture 12 € billion € 40 10 30 8 6 20 4 10 2 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 59 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments by sector 2015-2019 - Market statistics – Number of companies
All Private Equity Venture Capital 9,000 5,000 8,000 7,000 4,000 6,000 3,000 5,000 4,000 Transportation 2,000
3,000 Real estate Number of companies of Number Number of companies of Number 2,000 ICT 1,000 1,000 Financial & insurance activities 0 Energy & environment 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Consumer goods & services Buyout Construction Growth 1,600 Chemicals & materials 2,500 Business products & services 1,400 Biotech & healthcare 2,000 1,200 Agriculture 1,000 1,500 800
600 1,000 Number of companies of Number
Number of companies of Number 400 500 200 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 60 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Investments in SMEs 2019 - Market statistics - % of Number of companies & Amount
98%
84% 82% 77%
60%
% Number of companies
% Amount invested
31% 27% 21%
Buyout Growth Venture Capital All Private Equity
Source: Invest Europe / EDC. Note: SMEs = companies with fewer than 250 full-time equivalent staff www.investeurope.eu/research 61 Investing in Europe: Private Equity activity 2019
ACTIVITY 2019 DIVESTMENTS
www.investeurope.eu/research 62 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at a glance 2019 Analysis > Divestments at cost (by amount of former equity invested) in 2019 are down 16% from the year before All Private Equity to €31bn. Further, all of the previous six years have seen higher divestment totals. 3,533 European companies were exited during the year, an 11% decrease from 2018. By amount, sale to another private €31bn into 3,533 companies equity firm was the most popular exit route (34%), followed by trade sale (29%) and public offering (11%). By number of companies, repayment of preference shares / loans or mezzanine was the most by 734 firms & 1,867 funds popular exit route (38%), followed by trade sale (15%) and management / owner buyback (11%). By country of portfolio company, France & Benelux were the principal markets (38% of total divested), whilst by country of private equity firm the main market was the UK & Ireland (35% of total divested). Venture Capital Average holding period for companies divested during the year was just under six years. €2.5bn into 1,242 companies > Venture divestments increased 10% year-on-year to €3bn, the highest total since 2011. 1,242 companies were divested, a 5% decrease from the year before. The main exit route by amount was by trade sale by 362 firms & 775 funds (34%), followed by public offering (17%) and sale to another private equity firm (16%). The main exit routes by number of companies were repayment of preference shares / loans or mezzanine (33%), write off (18%), and trade sale (16%). 36% of exited companies were in the ICT sector, followed by biotech Buyout and healthcare (18%) and business products and services (16%). > Buyout divestments represented 73% of the total by amount at cost and saw a reduction of 8% year-on- €23bn into 819 companies year to €23bn in 2019. 819 companies were divested (23% of total), down 11% from 2018. The main exit routes by amount were sale to another private equity firm (39%), trade sale (30%) and public offering by firms & funds 317 617 (12%). The main exit routes by number of companies were trade sale (24%), repayment of preference shares / loans or mezzanine (23%) and sale to another private equity firm (22%). 75% of companies exited were in three main sectors: business products & services, consumer goods & services and ICT. Growth > Growth divestments saw the heaviest year-on-year decrease in 2019. Total divestments were €5bn, a €5.1bn into 1,530 companies reduction of 38% from 2018. 1,530 growth companies were divested, 43% of all private equity divestments for the year. The main exit routes by amount were repayment of preference shares / loans by 271 firms & 865 funds or mezzanine (26%), sale to another private equity firm (23%) and trade sale (23%). The main exit routes by number of companies were repayment of preference shares / loans or mezzanine (47%), trade sale (10%) and management / owner buyback (10%). Companies in the business products and services sector Note: the stages relate to the initial investment stage of the saw the most exits (26%), followed by consumer goods & services (25%) and ICT (18%). portfolio company www.investeurope.eu/research 63 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost at a glance
80 2007-2019 - Market statistics – Amount & Number of companies 2,000
1,579 1,607 1,510 1,560 1,530 70 1,629 1,373 1,375 1,500 1,276 1,306 1,276 1,274 Venture Capital 1,391 1,089 1,344 1,357 1,354 1,308 1,208 1,209 1,242 Growth 60 1,086 1,099 1,000 801 809 1,009 991 985 933 904 924 Buyout 858 827 836 819 725 50 654 703 €47.4bn 500 541 €44.9bn €44.5bn €43.1bn 6.8 €37.2bn 40 €35.8bn €36.8bn 5.6 6.8 0 Other 7.5 €31.2bn Growth €28.4bn 5.3 30 6.8 8.2 -500 €25.0bn 5.1 Buyout 3.7 €20.7bn 2.7 36.4 Venture Capital 20 34.9 33.9 -1,000 €15.4bn €15.1bn 2.9 31.2
€ billion Number of companiesof Number billion € 27.7 25.0 25.0 20.9 2.4 22.9 2.6 19.3 10 14.5 -1,500 10.0 8.7
3.1 0 2.4 2.6 2.2 2.7 1.9 2.4 2.2 2.5 2.0 2.1 2.3 2.5 -2,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Invest Europe / EDC. Note: Other includes Rescue/Turnaround and Replacement capital www.investeurope.eu/research 64 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost by exit route – All Private Equity 2019 - Market Statistics - % of Amount
4% 3% 6% 15% 4% 11% Trade sale 29% Public offering 3% 6% Write-off All Private Equity Repayment of preference shares / loans or mezzanine All Private Equity €31.2bn divested at cost 10% Sale to another private equity firm 3,533 companies divested 11% 34% Sale to financial institution
Management / Owner buyback 11% Other means
4% 11% 38%
Source: Invest Europe / EDC www.investeurope.eu/research 65 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost by exit route - Venture Capital / Buyout / Growth 2019 - Market Statistics - % of Amount
2% 4% 2%
30%
Buyout €23bn divested at cost 6% 39% 3% 10% 10% 23% 7% 3% 34% 12%
4% Venture Capital 7% Growth 16% €2.5bn divested at cost €5bn divested at cost 5%
Trade sale 23% 3% Public offering Write-off 6% Repayment of preference shares / loans or mezzanine 17% 8% Sale to another private equity firm 26% Sale to financial institution Management / Owner buyback
Source: Invest Europe / EDC Other means www.investeurope.eu/research 66 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost by exit route - Venture Capital / Buyout / Growth 2019 - Market Statistics - % of Number of companies
3%
15% 24%
6% Buyout 819 companies divested 4% 8% 6% 10% 16% 3% 10% 9% 9% 22% 3% 3% 8% 5% 23% 7% Venture Capital Growth 8% 1,242 companies divested 1,530 companies divested
Trade sale 18% Public offering Write-off 33% Repayment of preference shares / loans or mezzanine Sale to another private equity firm 47% Sale to financial institution Management / Owner buyback
Source: Invest Europe / EDC Other means www.investeurope.eu/research 67 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Divestments at cost by exit route 2015-2019 - Market statistics - Amount at cost
18 Trade sale
16 € billion € Public offering 14 Write-off 12 Repayment of preference shares / loans or mezzanine 10 Sale to another private equity firm 8
Sale to financial institution 6
4 Management / Owner buyback
2 Other means
- 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 68 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Divestments at cost by exit route 2015-2019 - Market statistics – Number of companies
1,600 Trade sale
1,400 Public offering
1,200 Write-off
Number of companiesof Number 1,000 Repayment of preference shares / loans or mezzanine
800 Sale to another private equity firm
600 Sale to financial institution
400 Management / Owner buyback
200 Other means
- 2015 2016 2017 2018 2019
Source: Invest Europe / EDC www.investeurope.eu/research 69 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Divestments at cost by sector 2019 - Market statistics - Amount & Number of companies (excluding write-offs)
8 800 Number of companies exited 7.2 7.2
7 6.6 700
€ billion € Amount at cost 6 600 Number of companies exited 5 500
4 771 400 708 727 3.3 3 300
1.9 2 200 321 1.3
0.7 1 0.6 0.5 0.5 100 141 126 97 0.1 47 75 62 39 0.0 44 0 0
Source: Invest Europe / EDC www.investeurope.eu/research 70 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost by sector - Venture Capital / Buyout / Growth 2019 - Market statistics - Amount (excluding write-offs)
31% ICT 21% 20% 7% Business products and services 26% 24% 31% Biotech and healthcare 8% 16% 8% Consumer goods and services 26% 20% 16% Energy and environment 4% 3% 2% Financial and insurance activities 8% 3% 1% Construction 1% 6% 2% Agriculture 2% 4% Venture Capital 1% Transportation 2% Buyout 2% 1% Growth Chemicals and materials 2% 1% 0% Real estate 0% 1% 0% Other 0% 1%
Source: Invest Europe / EDC www.investeurope.eu/research 71 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Divestments at cost by sector - Venture Capital / Buyout / Growth 2019 - Market statistics – Number of companies (excluding write-offs)
16% Business products and services 31% 26% 36% ICT 18% 18% 14% Consumer goods and services 26% 25% 18% Biotech and healthcare 6% 8% 7% Energy and environment 4% 4% 2% Construction 4% 6% 2% Financial and insurance activities 4% 3% 2% Transportation 2% 3% Venture Capital 1% Chemicals and materials 3% Buyout 2% 2% Growth Agriculture 1% 2% 0% Real estate 2% 1% 1% Other 0% 2%
Source: Invest Europe / EDC www.investeurope.eu/research 72 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity - Divestments at cost by region 2019 - Industry vs. Market statistics - % of Amount
14
€11.9bn 12 €11.4bn €11.2bn
10
8
€5.6bn 6 €5.2bn €4.2bn 4 €3.4bn €3.4bn €3.1bn €3.1bn
2 €0.9bn €0.6bn
- UK & Ireland DACH Nordics France & Benelux Southern Europe CEE
Industry statistics - Country of the private equity firm Market statistics - Country of portfolio company
Source: Invest Europe / EDC www.investeurope.eu/research 73 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
All Private Equity – Average Holding Period 2015-2019 – Average holding period in years
8
7.0
Years 7
6.2 6.3 6.3 6.3 6.0 5.8 5.8 5.8 5.9 6 5.6 5.7 5.7 5.7 5.7 5.5 5.5 5.4 5.5 5.4 5.1 5.1 4.9 5 4.7 4.6
4
3
2
1
0 Venture Capital Growth Buyout Rescue/Turnaround Replacement capital
2015 2016 2017 2018 2019 Source: Invest Europe / EDC www.investeurope.eu/research 74 Investing in Europe: Private Equity activity 2019
ACTIVITY 2019 METHODOLOGY & GLOSSARY
www.investeurope.eu/research 75 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Methodology & Glossary Fundraising
FUND STAGE FOCUS TYPES OF INVESTORS FUNDRAISING STATISTICS EXPLAINED Buyout fund: Funds acquiring companies Corporate investor: Corporations Government agencies: Country, Direct private equity investment funds that primarily by purchasing majority or controlling manufacturing products or delivering regional, governmental and European focus on investments in Europe are monitored. stakes, financing the transaction through non-financial services. agencies or institutions for innovation and a mix of equity and debt. development. Funds raised are recorded in the country of the Endowment: An investment fund advisory team that is raising/managing the fund Generalist fund: Funds investing in all established by a foundation, university or Other asset manager: A financial stages of private equity. cultural institution providing capital institution (other than a bank, (‘industry statistics’). donations for specific needs or to further endowment, family office, foundation, Growth fund: Funds that make private The funds included in the statistics are: private a company’s operating process. They are insurance company or pension fund) equity investments (often minority generally structured so that the principal managing a pool of capital by investing it equity funds making direct private equity investments) in relatively mature amount invested remains intact (for across different asset classes with the investments, mezzanine private equity funds, co- companies that are looking for primary perpetuity, for a defined period of time purpose of generating financial returns. investment funds and rescue/turnaround funds. capital to expand and improve operations or until sufficient assets have been The category may include private equity or enter new markets to accelerate the accumulated to achieve a designated direct funds that occasionally do indirect The following funds are excluded from the growth of the business. purpose). investments but excludes fund of funds statistics: infrastructure funds, real estate funds, that are a standalone option. private debt funds, distressed debt funds, primary Mezzanine fund: Funds using a hybrid of Family office: An entity that provides debt and equity financing, comprising services to one or more affluent families, Sovereign wealth funds: State-owned funds of funds, secondary funds of funds, equity-based options (such as warrants) accelerator/incubator funds, business angel activity. including investment management and investment funds investing in foreign and lower-priority (subordinated) debt. other services (accounting, tax, financial direct private equity funds to diversify and legal advice etc.). their portfolio. Venture Capital Foundations: A non-profit organisation Note: Fundraising amounts include capital gains Early-stage fund: Venture capital funds through which private wealth is except when reporting fundraising by type of focused on investing in companies in the distributed for the public good. It can investor. In the following presentation, early stages of their lives. unclassified figures concerning the type of either donate funds and support other investor have been extrapolated. More Later-stage fund: Venture capital funds organisations or provide the sole source comprehensive data is available here: providing capital for an operating of funding for its own charitable www.investeurope.eu/research/ company which may or may not be activities. profitable. Typically in C or D rounds. Fund of funds: A private equity fund that Venture fund (all stages): Venture primarily takes equity positions in other capital funds focused on both early and funds. later stage investments. www.investeurope.eu/research 76 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Methodology & Glossary Investments
INVESTMENTS STAGES INVESTMENTS STATISTICS EXPLAINED Seed: Funding provided before the investee company Growth: A type of private equity investment (often a Industry statistics are an aggregation of figures has started mass production/distribution with the aim minority investment) in relatively mature companies according to the country of the private equity firm’s to complete research, product definition or product that are looking for primary capital to expand and office in charge of the investment. At European design, also including market tests and creating improve operations or enter new markets to level, this relates to investments made by European prototypes. This funding will not be used to start mass accelerate the growth of the business. private equity firms regardless of the location of the production/distribution. portfolio company. Buyout: Financing provided to acquire a company. It Start-up: Funding provided to companies, once the may use a significant amount of borrowed capital to Market statistics are an aggregation of figures product or service is fully developed, to start mass meet the cost of acquisition. Typically involves according to the location of the portfolio company. production/distribution and to cover initial marketing. purchasing majority or controlling stakes. At European level, this relates to investments in Companies may be in the process of being set up or Rescue / Turnaround: Financing made available to an European companies regardless of the location of the may have been in business for a shorter time, but existing business, which has experienced financial private equity firm. have not sold their product commercially yet. The use distress, with a view to re-establishing prosperity. of the capital would be mostly to cover capital Equity value: The amount of capital invested to expenditures and initial working capital. acquire shares in an enterprise. The equity value Replacement Capital: Minority stake purchase from This stage also contains also the investments reported includes equity, quasi-equity, mezzanine, unsecured another private equity investment organisation or as “Other early stage” which represents funding debt and secured debt provided by the private equity from another shareholder or shareholders. provided to companies that have initiated commercial firm. manufacturing but require further funds to cover The funds included in the statistics are: private additional capital expenditures and working capital equity funds making direct private equity before they reach the break-even point. Such investments, mezzanine private equity funds, co- companies will not be generating a profit yet. investment funds and rescue/turnaround funds. Later-stage venture: Financing provided for an The following funds are excluded from the operating company, which may or may not be statistics: infrastructure funds, real estate funds, profitable. Later-stage venture tends to involve private debt funds, distressed debt funds, primary financing into companies already backed by VCs, funds of funds, secondary funds of funds, typically in C or D rounds. accelerator/incubator funds, business angel activity.
www.investeurope.eu/research 77 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Methodology & Glossary Divestments
EXIT ROUTE DIVESTMENTS STATISTICS EXPLAINED Management/ Owner buyback: The buyer of the Sale to financial institution: A financial institution is Industry statistics are an aggregation of figures company is its management team. an entity that provides financial services for its according to the country of the private equity firm’s clients: Public offering: office in charge of the divestment. At European ‒ Depositary Institutions: deposit-taking institutions level, this relates to divestments made by European ‒ First divestment following flotation (IPO): The sale that accept and manage deposits and make loans, private equity firms regardless of the location of the or distribution of a private company’s shares to the including banks, building societies, credit unions, portfolio company. public for the first time by listing the company on trust companies and mortgage loan companies. the stock exchange. Market statistics are an aggregation of figures ‒ Contractual Institutions: Insurance companies and ‒ Sale of quoted equity post flotation: It includes sale pension funds. according to the location of the portfolio company. of quoted shares only if connected to a former At European level, this relates to divestments of ‒ Investment Institutions other than direct private private equity investment, e.g. sale of quoted shares equity firms. European companies regardless of the location of the after a lock-up period. private equity firm. Trade sale: The sale of a company's shares to Repayment of preference shares / loans or industrial investors. Divestment amounts (including write-offs) are mezzanine: If the private equity firm provided loans recorded at cost (i.e. the total amount divested is or bought preference shares in the company at the Write-off: The value of the investment is eliminated equal to the total amount invested before). time of investment, then their repayment according and the return to investors is zero or negative. to the amortisation schedule represents a decrease of The funds included in the statistics are: the financial claim of the firm into the company, and Note: Recapitalisations are not considered in the divestment private equity funds making direct private equity statistics. hence a divestment. investments, mezzanine private equity funds, co- investment funds and rescue/turnaround funds. Sale to another private equity firm: The buyer of the portfolio company is a private equity firm. The following funds are excluded from the statistics: infrastructure funds, real estate funds, private debt funds, distressed debt funds, primary funds of funds, secondary funds of funds, accelerator/incubator funds, business angel activity.
www.investeurope.eu/research 78 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Methodology and glossary
MARKET STATISTICS A Domestic divestments in European countries B Cross-border divestments within Europe C Non-European private equity C Non-European private equity firms divesting firms divesting portfolio portfolio companies in Europe companies in Europe INDUSTRY STATISTICS A B A Domestic divestments in European countries Domestic Cross-border divestments B Cross-border divestments within Europe divestments in European within Europe D European private equity firms divesting countries portfolio companies outside Europe
D European private equity firms divesting portfolio companies outside Europe
www.investeurope.eu/research 79 Investing in Europe: Private Equity activity 2019
ACTIVITY 2019 ACKNOWLEDGEMENTS
www.investeurope.eu/research 80 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
Acknowledgements
We are grateful for the generous support of General Partners representing private equity and venture capital firms across Europe who provided us with their activity data. These comprehensive and verified pan-European statistics would not be possible without their ongoing commitment. We also thank all the regional and national private equity associations formally partnering with Invest Europe as part of the European Data Cooperative (EDC):
AIFI – Italy FVCA – Finland ASCRI - Spain LPEA - Luxembourg BVA - Belgium NVCA - Norway BVCA - Bulgaria NVP - The Netherlands BVCA - UK PSIK - Poland BVK - Germany SECA - Switzerland CVCA - The Czech Republic SEEPEA - South Eastern Europe DVCA - Denmark SVCA - Sweden France Invest - France
www.investeurope.eu/research 81 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity activity 2019
About Invest Europe Research
Invest Europe is recognised as the authoritative data source for European private equity and venture capital by institutions including the European Commission and OECD (Organisation for Economic Co-operation and Development). Rigorous research has underpinned Invest Europe’s work with policymakers, press, the public and investors since 1984. To deliver this robust, trusted research data and insight, Invest Europe collects data on more than 1,400 firms.
INVEST EUROPE PEREP_ANALYTICS RESEARCH TEAM AUTHORISED STATISTICS PROVIDER FOR INVEST EUROPE Research Director Statistics Manager Julien Krantz Iuliana Furica Research Manager Knowledge Manager Daniel Irwin-Brown Monica Biolan Research Officer Statistics Team Ariane Mortelmans Sara Bal Silvia Costea [email protected] Adriana Craciun www.investeurope.eu Luiza Dima Alexandra Ehupov Sofian Giuroiu Iuliana Petre Cristina Porumboiu Francesca Radulescu Dragos Tanasescu [email protected]
www.investeurope.eu/research 82 Investing in Europe: Private Equity activity 2019
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