2016 European Private Equity Activity Introduction to Invest Europe

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 Copyright information responsibility for any person’s reliance upon the information contained herein. No part of this publication may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. Copyright enquiries should be directed to Invest Europe. In furnishing this presentation, Invest Europe undertakes no obligation to provide any Tel: + 32 2 715 00 20. additional information or to update this presentation or any additional information or to correct any inaccuracies which may become apparent. © Copyright Invest Europe July 2017 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, Version without the written permission of Invest Europe. Presentation as of 05/07/2017

> Invest Europe is the association representing Europe’s private Invest Europe is the equity, venture capital and infrastructure sectors, as well as their investors. voice of investors > Our members take a long-term approach to investing in privately held companies, from start-ups to established firms. They inject not only capital but dynamism, innovation and in privately-held expertise. This commitment helps deliver strong and sustainable growth, resulting in healthy returns for Europe’s leading pension funds and insurers, to the benefit of the companies in Europe. millions of 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

2016 European Private Equity Activity 2 European Data Cooperative New database launched

> The European Data Cooperative (EDC) is a joint initiative developed by Invest Europe and its national association The EDC is the 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 capital associations and other database of European contributors across Europe. > The EDC platform is jointly owned and operated by the private private equity and equity and venture capital associations across Europe. > Using one platform with a standardised methodology that allows us to have consistent, robust pan-European statistics venture capital that are comparable across the region. > As a result we produce the most comprehensive overview of statistics. Europe’s private equity and 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.

2016 European Private Equity Activity 3 European Data Cooperative Data restatements & research support

> The EDC replaces Invest Europe’s previous database The new database PEREP_Analytics. All relevant historic data was migrated to the EDC system. > All data since 2007 was restated and complemented with brings together: additional information. All audit efforts are conducted in close coordination with data contributors and partnering national associations to ensure the best coverage and  3,000 firms consistent application of methodology and definitions. > Improved coverage on a regional level mostly impacts the  7,000 funds number of companies reported compared to earlier publications. Extensive audit efforts ensure that syndicated  60,000 portfolio companies investments are not double-counted. > The most recent data publications are always available on Invest Europe’s website (www.investeurope.eu/research) or  200,000 transactions contact the research team ([email protected]). > Invest Europe members and data contributors receive dedicated research and data support from Invest Europe’s research team.

2016 European Private Equity Activity 4 Overview - All Private Equity - Fundraising, Investments & Divestments 1997–2016 - Industry statistics - Amount

With data on more than 1,200 European private equity firms, the 2016 statistics cover 88% of the €600bn in capital under management in Europe.

120 112

100 € billion € 82 83 78 80 72 71 74

59 59 60 5354 53 50 52 48 47 46 46 46 42 43 46 40 41 40 37 38 40 35 33 35 2828 29 27 30 30 27 2525 24 27 26 26 26 20 20 20 20 22 16 15 20 14 12 14 10 9 9 11 6 7 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Funds raised Investments Divestments 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 (2000-2006) & Invest Europe / EDC (2007-2016) 2016 European Private Equity Activity 5 What’s inside?

Executive Summary 7

1. FUNDRAISING 2. INVESTMENTS 3. DIVESTMENTS Fundraising statistics explained 8 Investments statistics explained 27 Divestments statistics explained 55 Glossary 9 Glossary 29 Glossary 57 At a glance 10 At a glance 30 At a glance 58 Incremental fundraising By investment stage By initial investment stage 59 By fund stage focus 11 All Private Equity 31 By exit route 60 Concentration of capital 13 Buyout by equity bracket 34 By sector 64 By region of management 14 By geography 36 By region 67 Investors by type 15 Investments as % of GDP Investors by geography 21 Location of the PE firm 41 Location of the portfolio company 46 Final closing By sector 50 By fund stage focus 24 Initial / follow-on 53 Acknowledgements 68 Concentration of capital 26 Investments in SMEs 54 About Invest Europe Research 70

2016 European Private Equity Activity 6 Executive summary

1FUNDRAISING 2 INVESTMENTS 3 DIVESTMENTS In 2016, total fundraising reached €73.8bn, The total equity amount invested in European About 3,500 European companies were exited the highest level for Europe since 2008 and a companies remained stable in 2016 at in 2016, representing former equity 37% increase on 2015. Almost 400 funds €52.5bn. About a third of this amount was investments (divestments at cost) of €38.5bn. raised new capital, a 9% decrease compared invested cross-border. The number of While 15% lower than 2015, it is in line with to 2015, indicating a trend towards larger companies receiving investment decreased by the annual average since 2012. funds. 8% to just under 6,000 and 83% were SMEs. The most prominent exit routes by amount at European private equity and venture capital Buyout investment decreased by 3% year-on- cost were sale to another private equity firm funds raised around €240bn over the past four year to €36.5bn into over 1,000 companies. By (29%), trade sale (28%) and public offering (17%). years – more than twice the amount raised from amount, mid-market transactions increased by Buyout divestments represented 73% by amount 2009 - 2012. 25%, small buyouts reduced by 10%, and large at cost and 23% by number of companies of all Pension funds provided 34% of all capital raised, and mega buyouts fell by 17% and 34% exits in 2016. The amount divested fell by 19% followed by funds of funds (18%), insurance respectively. to €28.1bn with almost 800 companies exited, companies (12%), sovereign wealth funds (10%) Venture capital investment increased by 2% to below the very strong exit years of 2014 and and family offices & private individuals (9%). €4.3bn. Over 3,000 companies received 2015, but similar to 2013’s level. Institutional investors from outside Europe investment, with a trend towards larger Venture capital comprised around 35% of all contributed more than 40%. financing rounds. The total growth investment divestments with nearly 1,300 companies. The amount decreased by 8% to €9.7bn, with the Buyout fundraising increased by 71% to €56.3bn, amount divested at cost increased by 13% to number of companies declining by 5% to just driven by larger funds. Buyout funds that €2.5bn or 6% of the total amount divested. Most over 1,800. Around 10% of growth capital reached between €250m and €1bn at final close prominent exit routes were trade sale, investment was directed into companies raised about twice as much capital as in management/owner buy-back, sale to a already backed by venture capital. previous years. financial institution, and write-off. Consumer goods and services was the most Venture capital fundraising grew to €6.4bn in Growth divestments represented 15% of all exits invested sector (28% by amount, 17% by number 2016, surpassing the European record achieved by amount and 40% by number of companies. of companies), followed by ICT (20% by amount, in 2007. This was driven by an increase in the The amount divested decreased by 18% to 32% by number of companies) and business number of VC funds reaching more than €100m €5.9bn and the number of companies decreased products and services (20% by amount, 18% by at final close. Growth capital fundraising by 8% to 1,373. number of companies). remained stable at €3.9bn. 2016 European Private Equity Activity 7 1. FUNDRAISING

Fundraising statistics explained

Direct private equity investment funds that primarily focus on investments in Europe are monitored. Funds raised are recorded in the country of the advisory team that is raising/managing the fund (‘industry statistics’). The funds included in the statistics are: private equity funds making direct private equity investments, mezzanine private equity funds, co-investment funds and rescue/turnaround funds. The following funds are excluded from the statistics: infrastructure funds, real estate funds, distressed debt funds, primary funds of funds, secondary funds of funds. Glossary

Fund stage focus Types of investors

Buyout fund: Funds acquiring companies by Corporate investor: Corporations manufacturing Other asset manager: A financial institution (other purchasing majority or controlling stakes, financing products or delivering non-financial services. than a bank, endowment, family office, foundation, the transaction through a mix of equity and debt. insurance company or pension fund) managing a pool Endowment: An investment fund established by a of capital by investing it across different asset classes Early-stage fund: Venture capital funds focused on foundation, university or cultural institution providing with the purpose of generating financial returns. It investing in companies in the early stages of their capital donations for specific needs or to further a may include private equity direct funds that lives. company’s operating process. They are generally occasionally do indirect investments, but excludes structured so that the principal amount invested fund of funds that are a standalone option. Generalist fund: Funds investing in all stages of remains intact (for perpetuity, for a defined period of private equity. time or until sufficient assets have been accumulated Pension funds: A pension fund that is regulated under to achieve a designated purpose). private or public sector law. Growth fund: Funds that make private equity investments (often minority investments) in relatively Family office: An entity that provides services to one Sovereign wealth funds: State-owned investment mature companies that are looking for primary capital or more affluent families, including investment funds investing in foreign direct private equity funds to expand and improve operations or enter new management and other services (accounting, tax, to diversify their portfolio. markets to accelerate the growth of the business. financial and legal advice etc.).

Later-stage fund: Venture capital funds providing Foundations: A non-profit organisation through which Note: Fundraising amounts include capital gains capital for an operating company which may or may private wealth is distributed for the public good. It except when reporting fundraising by type of not be profitable. Typically in C or D rounds. can either donate funds and support other investors. In the following presentation, unclassified organisations, or provide the sole source of funding figures concerning the type of investors have been Mezzanine fund: Funds using a hybrid of debt and for their own charitable activities. extrapolated. More comprehensive data is available equity financing, comprising equity-based options here: www.investeurope.eu/research/ (such as warrants) and lower-priority (subordinated) Fund of funds: A private equity fund that primarily debt. takes equity positions in other funds.

Venture fund: Venture capital funds focused on both Government agencies: Country, regional, early and later stage investments. governmental and European agencies or institutions for innovation and development.

2016 European Private Equity Activity 9 2016 Fundraising at a glance

• In 2016, total fundraising reached €73.8bn, a 38% increase compared to 2015 and the highest Incremental amounts raised during the year (€ billion) level for Europe since 2008. Almost 400 funds raised new capital. This 9% decrease compared with 2015 indicates a trend towards larger funds. • Pension funds had the largest contribution with 34%, followed by funds of funds (18%), insurance 73.8 companies (12%), sovereign wealth funds (10%) and family offices & private individuals (9%). More than 40% of the total capital was raised from institutional investors outside of Europe. 7.2 • Venture capital funds raised €6.4bn in 2016, reaching the highest level since 2007. This trend was supported by an increase in larger venture funds. Thirteen out of 45 venture funds reached 3.9 more than €100m at final close and were responsible for 80% of the total amount raised. 59.1 Government agencies contributed 25%, followed by family offices and private individuals (20%), funds of funds & other asset managers (15%) and corporate investors (15%). Institutional 52.5 53.5 investors from outside of Europe contributed 12%. 6.5 • Buyout fundraising increased by 71% to €56.3bn, driven by larger funds. In particular, buyout 5.4 funds that reached a final close of between €250m and €1bn raised about twice as much capital 7.6 11.3 than in previous years. The total amount raised by the buyout funds that reached more than €1bn at final closing was the highest since 2013. Pension funds remained the largest 3.4 institutional investor in European buyout funds (41%), followed by funds of funds & other asset 3.8 managers (17%), insurance companies (13%) and sovereign wealth funds (12%). North American institutional investors contributed more than a third of the capital raised. 56.3 • Growth capital fundraising has established itself in recent years with a stable amount of capital 27.0 raised in 2016 (€3.9bn) compared with 2015. Funds in this category range from vehicles scaling 43.4 up venture capital-backed companies, to those making minority equity investments in mature 5.0 36.4 SMEs, and regional development policies backed by banks or public institutions. 1.4 32.9

All Private Venture 2016 Buyout(1) Growth(1) Equity Capital(1) 16.9 Incremental - Amounts raised €73.8bn €6.4bn €56.3bn €3.9bn 6.4 Incremental – No. of funds 390 116 81 59 3.7 3.8 5.1 5.5 Final closings - Cumulative €65.5bn €3.8bn €54.7bn €3.4bn 2012 2013 2014 2015 2016 amount since inception

Final closings - No. of funds 150 45 47 22 Venture Capital Buyout Growth Other (2) Total Source: Invest Europe / EDC Source: Invest Europe / EDC Note: (1) relates to fund focus Note: (2) Other includes Mezzanine and Generalist funds 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 10 Funds raised by fund stage focus 2012-2016 - Incremental amount raised during the year

9 60 56 Legend 8 7.9

Venture € billion € € billion € Later-stage 50 7 Early-stage 6.4 6.5 43 6.2 6.0 6 5.5 40 5.4 36 5.1 33 5 30 3.8 4 3.7 2.8 4.7 3.8 3.9 2.6 3.4 3.4 3.4 3 20 17 1.8 2.3 0.2 0.9 2 1.7 0.2 1.4 1.5 0.3 10 0.5 2.2 1 1.7 1.8 0.7 1.5 0.4 1.0 0 0 Venture Capital Growth Mezzanine Generalist Buyout

2012 2013 2014 2015 2016

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 11 Funds raised by fund stage focus 2012-2016 - Number of funds that reached first, intermediate or final closing during the year

Legend

Venture Later-stage Early-stage 180 169 180 180 158 160 149 160 160 141 140 133 140 132 140 129 127 130 116 120 95 120 120

98 100 83 95 100 100 77 80 81 80 80 79 80 72 70 9 59 57 59 60 60 60 8 49 49 7 5 40 40 2 40 65 50 47 51 20 20 35 9 20 5 5 7 4 0 0 0 Venture Capital Growth Mezzanine Generalist Buyout

2012 2013 2014 2015 2016

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 12 All Private Equity - Concentration of capital 2012-2016 – Incremental fundraising by amount bracket per fund during the year

70% Number of 12 funds 60%

9 50%

40% 10 4 8

30% 373 344

% total amount of annual fundraising annual of amount total % 39 360 20% 30 21 36 340 10 41 12 10% 14 43 4 7 46 5 29 4 287 0% 2012 2013 2014 2015 2016 < €100m €100m - €250m €250m - €500m €500m - €1bn > €1bn

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 13 All Private Equity – Funds raised by region of management 2012-2016 - Incremental amount raised during the year

80 0.6

70 3.7 € billion €

60 0.4 18.9 4.8 0.4 0.4 50 3.9 4.5 9.7 5.9 3.3 40 7.1 13.0 14.1 1.9 6.2 30 0.5 8.4 2.0 6.2 3.0 20 5.8 41.3 1.8 35.2 2.7 10 22.8 23.1 14.2

0 2012 2013 2014 2015 2016

UK & Ireland DACH Nordics France & Benelux Southern Europe CEE

Source: Invest Europe / EDC DACH: Austria, Germany, Switzerland / Southern Europe: Greece, Italy, Portugal, Spain / Nordics: Denmark, Finland, Norway, Sweden / CEE: Central Eastern Europe 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 14 All Private Equity - Funds raised by region of management and investor type 2016 - Incremental amount raised during the year

100% 2% 3% 0% 0% 9% 13% 10% 90% 20% Sovereign wealth funds 24% 8% 15% Pension funds 80% 0% 42% Insurance companies 70% 7% 23% 19% 19% Government agencies 49% 11% 60% Fund of funds & Other asset managers 6% 50% 7% Family offices & Private individuals 23% 24% 4% 37% Corporate investors 40% 24% 9% 19% Capital markets 30% 2% 10% 21% Banks 6% 20% 13% 7% 14% 0% 13% 2% 0% Academic inst. / Endowments / 0% 0% 5% 0% 6% 3% 5% Foundations 10% 0% 0% 0% 18% 2% 1% 6% 8% 8% 9% 5% 0% 4% 0% 2% 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 15 Funds raised by type of investor 2016 - Incremental amount raised during the year - % of amount

All Private Equity funds Venture Capital funds

0% 0% 1% 6% 10% 2% 12% 5% 3% 4% 4% 1% 15% 6% 5% Academic institutions 5% 390 funds 12% 116 funds Banks 3% 6% 256 firms 93 firms Capital markets 34% 5% Corporate investors 8% Endowments and foundations 25% 12% 10% 6% Family offices Fund of funds Buyout funds Growth funds Government agencies 0% 0% 0% Insurance companies 1% 12% 4% 6% 3% 5% 2% Other asset managers 2% 24% Pension funds 12% Private individuals 81 funds 30% 59 fundsEndowments and CapitalBanks markets0% Sovereign wealth funds 2% Corporatefoundations investors Private individuals2.7%Family1.2% offices5% 66 firms 45 firms2.0%3.7% 5.1%Fund3.6% of funds1% 13% 11.5% 41% Government6% agencies Pension funds 5.9% 2% Insurance companies 5% Other37.4% asset10% managers 4% 10.8% 10% 4.7%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 16 All Private Equity - Funds raised by type of investor 2012-2016 - Incremental amount raised during the year - % of total amount

40% Academic inst. / Endowments / Foundations 35% Banks

30% 40% Capital markets 35% 30% Corporate investors 25% 25% 20% Family offices & Private individuals 20% 15% 10% Fund of funds & Other asset managers 5% 15% 0% Government agencies Insurance companies 10% Pension funds 5% Sovereign wealth funds 0% 2012 2013 2014 2015 2016

80 73.8 58.9 60 52.5 53.4

€ billion € 40 27.0 New funds raised (excluding capital gains) 20

0 2012 2013 2014 2015 2016 Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 17 Venture Capital - Funds raised by type of investor 2012-2016 - Incremental amount raised during the year - % of total amount

40% Academic inst. / Endowments / Foundations 35% Banks Capital markets 30% 40% 35% 30% Corporate investors 25% 25% 20% Family offices & Private individuals 20% 15% 10% Fund of funds & Other asset managers 5% 15% 0% Government agencies Insurance companies 10% Pension funds 5% Sovereign wealth funds 0% 2012 2013 2014 2015 2016

10 6.4 5.1 5.5

5 3.7 3.8 New funds raised (excluding capital gains) € billion €

0 2012 2013 2014 2015 2016 Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 18 Buyout - Funds raised by type of investor 2012-2016 - Incremental amount raised during the year - % of total amount

45% Academic inst. / Endowments / Foundations 40% Banks 35% 40% Capital markets 35% 30% 30% Corporate investors 25% 25% 20% Family offices & Private individuals 15% Fund of funds & Other asset managers 20% 10% 5% 0% Government agencies 15% Insurance companies 10% Pension funds 5% Sovereign wealth funds 0% 2012 2013 2014 2015 2016 56.3 60 43.3 36.4 40 32.8 New funds raised (excluding capital gains)

€ billion € 16.9 20

0 2012 2013 2014 2015 2016 Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 19 Growth - Funds raised by type of investor 2012-2016 - Incremental amount raised during the year - % of total amount*

60% Academic inst. / Endowments / Foundations Banks 50% 40% Capital markets 35% 40% 30% Corporate investors 25% 20% Family offices & Private individuals 30% 15% 10% Fund of funds & Other asset managers 5% 0% Government agencies 20% Insurance companies

10% Pension funds Sovereign wealth funds 0% 2012 2013 2014 2015 2016 6 5.4

3.8 3.9 4 3.4

New funds raised (excluding capital gains) € billion € 2 1.4 * Due to the comparatively small number of growth funds 0 raised and the extent of extrapolation of missing data single-year data in this part of the market segment should 2012 2013 2014 2015 2016 be used cautiously. Long term trends should be used to Source: Invest Europe / EDC identify the structures of investors in this market segment. 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 20 All Private Equity - Fundraising geographic breakdown 2016 (2015) - Source of funds - % of total amount

North America 29.8% (19.6%) 5.3% (8.1%)

6.4% (11.1%) 6.8% (8.6%) 0.1% 24.1% (0.4%) (29.5%) Rest of world 0.9% 4.9% Australia (0.9%) (3.8%) Asia 11.8% Unclassified Europe (12.6%) 9.9% (5.4%) Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 21 Venture Capital - Fundraising geographic breakdown 2016 (2015) - Source of funds - % of total amount

North America 9.2% (10.5%) 7.2% (2.8%)

9.9% (19.3%) 12.3% (7.4%) 0.4% 39.9% (2.2%) (34.3%) Rest of world 0.6% 10.8% Australia (0.0%) (3.8%) Asia 2.5% Unclassified Europe (1.8%) 7.2% (17.8%) Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 22 Buyout - Fundraising geographic breakdown 2016 (2015) - Source of funds - % of total amount

North America 36.2% (27.6%) 5.7% (12.2%)

6.4% (11.8%) 6.9% (8.3%) 0.0% 15.5% (0.0%) (15.4%) Rest of world 1.1% 2.4% Australia (1.6%) (2.0%) Asia 14.9% Unclassified Europe (16.3%) 10.9% (4.8%) Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 23 Final closing - Funds raised by fund stage focus 2012-2016 - Final closing during the year - Amount(1)

60 Legend 55 5

Venture € billion € Later-stage 50 48

€ billion € Early-stage 3.9 4 3.8 40 3.2 3.4 3.2 3.2 34 1.4 3.1 3.0 3 2.7 30 2.4 2.7 2.3 25 2.1 1.7 1.9 2 0.9 1.6 20 0.9 0.7 15 0.2 1.1 0.1 1.0 1 0.5 0.3 0.8 0.8 10 1.6 1.4 1.1 0.4 0.7 0.8 0.2 0 0 Venture Capital Growth Mezzanine Generalist Buyout

2012 2013 2014 2015 2016 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. 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 24 Final closing - Funds raised by fund stage focus 2012-2016 - Final closing during the year - Number of funds(1)

Legend

Venture Later-stage 60 Early-stage 60 54

50 50 47 46 45 41 43 39 40 29 40 35 35 35 35 21 32 26 30 29 30 17 20 30 24 24 22 4 4 19 20 4 20 4 2 15 14

21 21 10 18 10 17 17 5 3 4 1 1 0 0 Venture Capital Growth Mezzanine Generalist Buyout

2012 2013 2014 2015 2016 Source: Invest Europe / EDC 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. 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 25 Final closing - All Private Equity - Concentration of capital 2012-2016 - Final closing during the year - Amount(1) & Number of funds(2)

100% Number 90% of funds 80% 12 70% 11 10 60%

50% 7 3

40% % total amount of annual fundraising annual of amount total % 30%

8 20% 17 8 25 19 30 10% 6 11 5 13 25 96 22 11 78 3 83 71 29 0% 75 2012 2013 2014 2015 2016 < €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. 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 26 2. INVESTMENTS

Investments statistics explained

Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the investment. At European level, this relates to investments made by European private equity firms regardless of the location of the portfolio company. Market statistics are an aggregation of figures according to the location of the portfolio company. At European level, this relates to investments in European companies regardless of the location of the private equity firm. Equity value: The amount of capital invested to acquire shares in an enterprise. The equity value includes equity, quasi-equity, mezzanine, unsecured debt and secured debt provided by the private equity firm. The funds included in the statistics are: private equity funds making direct private equity investments, mezzanine private equity funds, co-investment funds and rescue/turnaround funds. The following funds are excluded from the statistics: infrastructure funds, real estate funds, distressed debt funds, primary funds of funds, secondary funds of funds. Market versus industry statistics

Market statistics C C A + B + C

DD A

Industry statistics A + B + D A Domestic investments in European countries

B Cross-border investments within Europe

C Non-European private equity firms investing in portfolio companies in Europe D European private equity firms investing in portfolio companies outside Europe Glossary

Venture capital Growth Rescue / Turnaround

Seed: Funding provided before the investee company A type of private equity investment (often a minority Financing made available to an existing business, has started mass production/distribution with the aim investment) in relatively mature companies that are which has experienced financial distress, with a view to complete research, product definition or product looking for primary capital to expand and improve to re-establishing prosperity. design, also including market tests and creating operations or enter new markets to accelerate the prototypes. This funding will not be used to start mass growth of the business. production/distribution.

Start-up: Funding provided to companies, once the product or service is fully developed, to start mass Buyout Replacement capital production/distribution and to cover initial marketing. Companies may be in the process of being Financing provided to acquire a company. It may use Minority stake purchase from another private equity set up or may have been in business for a shorter a significant amount of borrowed capital to meet the investment organisation or from another shareholder time, but have not sold their product commercially cost of acquisition. Typically by purchasing majority or shareholders. yet. The destination of the capital would be mostly to or controlling stakes. cover capital expenditures and initial working capital.

Later-stage financing: Financing provided for an operating company, which may or may not be profitable. Late stage venture tends to be financing into companies already backed by VCs. Typically in C or D rounds.

2016 European Private Equity Activity 29 2016 Investments at a glance

• The total amount of equity invested in European companies in 2016 remained stable at Investments – Market statistics – Amount & No. of companies €52.5bn compared with 2015. The number of companies receiving investment decreased by 8% 53.6 52.5 to around 5,900, 83% of which are SMEs. Over a third of the total amount invested in European companies were cross-border investments. 45.9 • Venture capital investment increased by 2% to €4.3bn compared with 2015. Over 3,000 10.6 companies received investment, a reduction of 7%, which indicates a trend towards larger 9.7 financing rounds. ICT (communications, computer and electronics) was the largest sector at 39.7 40.6 44% of the total venture capital investment by amount, followed by biotech and healthcare 9.3 (27%) and consumer goods and services (9%). 37.5 36.5 • Buyout investment decreased by 3% year-on-year to €36.5bn. Over 1,000 companies were 6.2 6.8 subject to buyout transactions, a reduction of 5% compared with 2015. By investment amount, 31.7 mid-market transactions increased by 25%. Large buyouts (between €150m and €300m in equity invested) fell by 17% and mega buyouts (more than €300m in equity invested) 28.2 28.7 3,525 decreased by 34%. Most investment was concentrated in consumer goods and services sector 3,338 3,434 3,365 (32%), business products and services (22%), ICT (16%), and biotech and healthcare (10%). 3,124 • Growth investment decreased by 8% to €9.7bn. The number of companies receiving growth investments fell by 5% to just over 1,800. About 10% of the value of growth investments was 2,198 directed to scale-up companies that are already venture capital backed. Most investments 1,981 1,927 1,913 1,819 were concentrated in ICT (27%), business products and services (20%), consumer goods and services (20%), and energy and environment (13%). 987 926 1,029 1,057 1,008

All Private Venture 2016 - Market statistics Buyout(1) Growth(1) 4.2 4.3 Equity Capital(1) 3.2 3.5 3.6 Amount €52.5bn €4.3bn €36.5bn €9.7bn 2012 2013 2014 2015 2016 No. of companies: Amount (€bn): No. of companies 5,899 3,124 1,008 1,819 Venture Capital Venture Capital No. of firms 1,001 573 368 393 Buyout Buyout Growth Growth No. of funds 2,127 1,098 636 936 Other(2) Total Source: Invest Europe / EDC Source: Invest Europe / EDC Note: (1) relates to the investment stage of the portfolio company Note: (2) Other includes Rescue/Turnaround and Replacement capital 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 30 Investments by stage 2016 - Market statistics - % of Amount & Number of companies

% of Amount % of Number of companies Seed Start-up Buyout Seed 0.8% 3.9% Later-stage 16.0% 13.1% venture Replacement 3.5% capital Growth 1.3% capital Rescue/ 18.5% Turnaround 0.8%

Rescue/ Turnaround Start-up 0.7% 29.3%

Replacement Growth Buyout capital capital 69.5% 3.1% 28.9%

Later-stage venture 10.7%

Venture Capital €4.3bn Venture Capital 3,124 Companies Buyout €36.5bn Buyout 1,008 Companies Growth €9.7bn Growth 1,819 Companies

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 31 Investments by stage 2012-2016 - Market statistics - Amount

12 40

35 € billion € € billion € 10 30

8 25

6 20 37.5 10.6 36.5 9.3 4.2 4.3 9.7 31.7 15 28.7 4 3.5 3.6 0.3 0.4 28.2 3.2 0.2 0.2 6.8 0… 6.2 2.2 2.0 10 1.7 1.8 2 1.6 5 1.8 1.4 1.4 1.5 1.7 1.7 1.6 1.1 1.0 0.8 0.5 0.8 0 0.4 0.3 0.4 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Later-stage venture Start-up Seed Growth Rescue/Turnaround Replacement capital Buyout

Venture Capital

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 32 Investments by stage 2012-2016 - Market statistics - Number of companies

4,000 3,525 3,434 3,338 3,365 3,500 3,124 587 674 554 716

3,000 826 2,000 2,500

1,500 2,000 1,923 2,000 2,057 2,057 1,844 1,057 1,500 987 1,029 1,008 1,000 926

2,198 1,000 1,981 1,927 1,913 1,819 500 500 994 997 929 772 671 114 103 85 98 102 89 98 70 50 80 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Later-stage venture Start-up Seed Growth Rescue/Turnaround Replacement capital Buyout

Venture Capital

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 33 Buyout – Investments by equity bracket 2012-2016 - Market statistics - Amount & Number of companies

60 886 900 Number of companies

60 816 800 800 Number of companies 50 15

billion 755 700 40€ 715 621719 600 700 12 550 574 547 50 9 661 500 € billion € 493 30 438 8 400 608 24 378 Number of companies 600 60 886 7 9008 5 5 20 8 327 300 15 816 40 18 8008 7 268 7 263 50 238 16 200 billion 700 13 13 500 10 128 11 € 6 6215 2 8 3 4 8 4 100 40 50574 29 6 2 600 33 33 27 32 3 6 12 0550 30 18 4547 16 18 11 10 0 424 9 30493 500 400 30 2007 2008 2009 2010 5 2011 2012 2013 8 438 8 10 24 7 378 8 5 5 400 8 327 5 5 8 318 20 276 300 300 18 8 6 7 2687 7 263 278 20 238 16 265 200 19 13 13 10 128 11 15 6 5 2 4 4 100 15 200 50 29 6 8 2 3313 3 33 2713 32 3 0 30 18 4 16 18 11 10 0 10 Small (<€15m) - Amount 2007 2008 2009 2010 2011 2012 2013 100 Mid-market (€15m - €150m) - Amount 36 31 44 39 4 26 3 4 13 4 19 3 0 12 11 Large (€150m - €300m) - Amount 13 0 2012 2013 2014Mega (> €300m) - Amount2015 2016 Small (<€15m) - Amount Small (<€15m) - No. of companies Mid-market (€15m - €150m) - Amount Mid-market (€15m - €150m) - No. of companies Large (€150m - €300m) - Amount Large (€150m - €300m) - No. of companies Mega (> €300m) - Amount Mega (> €300m) - No. of companies

Source: Invest Europe / EDC Small (<€15m) - No. of companies 2016 European Private EquityMid Activity-market (€15m - €150m) - No. of companies FUNDRAISING INVESTMENTS DIVESTMENTS 34 Large (€150m - €300m) - No. of companies Mega (> €300m) - No. of companies Mid-market buyout – Investments by equity bracket 2012-2016 - Market statistics - Amount & Number of companies

20 400 Number of companies

18 3 350

€ billion € 331 16 300 14 4 6 4 250 12 235 3 4 10 208 200 193 198 10 5 8 4 5 3 150 6 7 6 6 6 100 4 78 62 65 51 46 50 2 27 32 32 32 25 - 0 2012 2013 2014 2015 2016

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 35 All Private Equity - Geographical investment flows 2016 - Industry vs. Market statistics - Amount

Market statistics are an aggregation of figures according to €1.5bn the location of the portfolio company. Non-European private At European level, this relates to equity firms investing investments in European companies regardless of the location of the private in portfolio companies equity firm. in Europe

€15.5bn €2.4bn European private equity firms investing Cross-border in portfolio companies investments outside Europe within Europe

€35.6bn Industry statistics Europe includes: are an aggregation of figures according Austria, Baltic countries (Estonia, Latvia, to the country of the private equity Lithuania), Belgium, Bulgaria, Czech Republic, firm’s office in charge of the Domestic investments Denmark, Finland, France, Germany, Greece, investment. Hungary, Ireland, Italy, Luxembourg, At European level, this relates to in European countries Netherlands, Norway, Other CEE (Bosnia- investments made by European private Herzegovina, Croatia, Macedonia, Montenegro, equity firms regardless of the location Serbia, Slovenia, Slovakia), Poland, Portugal, of the portfolio company. Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 36 Venture Capital - Geographical investment flows 2016 - Industry vs. Market statistics - Amount

Market statistics are an aggregation of figures according to €425m the location of the portfolio company. Non-European private At European level, this relates to equity firms investing investments in European companies regardless of the location of the private in portfolio companies equity firm. in Europe

€1,236m €493m European private equity firms investing Cross-border in portfolio companies investments outside Europe within Europe

€2,647m Industry statistics Europe includes: are an aggregation of figures according Austria, Baltic countries (Estonia, Latvia, to the country of the private equity Lithuania), Belgium, Bulgaria, Czech Republic, firm’s office in charge of the Domestic investments Denmark, Finland, France, Germany, Greece, investment. Hungary, Ireland, Italy, Luxembourg, At European level, this relates to in European countries Netherlands, Norway, Other CEE (Bosnia- investments made by European private Herzegovina, Croatia, Macedonia, Montenegro, equity firms regardless of the location Serbia, Slovenia, Slovakia), Poland, Portugal, of the portfolio company. Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 37 All Private Equity - Investments by region 2016 - Industry vs. Market statistics - Amount

Industry statistics Market statistics

CEE CEE Nordics 2% Nordics 3% 11% 10% UK & Ireland 17% UK & Ireland 29% Southern Europe 12% Southern Europe 19%

DACH 12% France & Benelux DACH 34% France & 17% Benelux 34%

Source: Invest Europe / EDC DACH: Austria, Germany, Switzerland / Southern Europe: Greece, Italy, Portugal, Spain / Nordics: Denmark, Finland, Norway, Sweden / CEE: Central Eastern Europe 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 38 Investments by stage and regions 2016 - Market statistics - Amount

5.5 12

11.1 € billion € 5.0 billion € 10

4.9

2.04.5 8 6.9 7.0 6.6

1.5 6 1.2 1.1 0.1 3.9 1.0 0.9 0.2 4 0.1 0.6 1.6 0.3 1.5 0.5 0.5 0.5 2 0.5 0.0 0.1 0.8 0.7 0.3 1.0 0.6 0.6 0.6 0.2 0.6 0.1 0.4 0.3 0.1 0.0 0.0 0.0 0.0 0.1 0.2 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.1 0 UK & Ireland France & Benelux DACH Southern Europe Nordics 0.0 CEE

Later-stage venture Start-up Seed Growth Rescue/Turnaround Replacement capital

Venture Capital Buyout

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 39 Investments by stage and regions 2016 - Market statistics - Number of companies

1,200

1,000 812

800 727 251

175

600 524 544

1,041 115 171 500 358 434 400 400 468 284 233 300 59 388 305 55 200 388 200 146 137 137 162 284 114 163 100 39 137 151 40 117 24 11 20 102 71 2 5 8 57 10 64 3 3 58 0 5 0 20 0 UK & Ireland France & Benelux DACH Southern Europe Nordics CEE Later-stage venture Start-up Seed Growth Rescue/Turnaround Replacement capital

Venture Capital Buyout Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 40 All Private Equity - Investments as % of European GDP 2000–2016 - Industry statistics: Location of the PE firm

0.60% 0.56% 0.55%

% of GDP of % 0.50%

0.43%

0.40% 0.38%

0.34% 0.35% 0.33% 0.34% 0.34% 0.32% 0.31% 0.29% 0.30% 0.28% 0.26% 0.25% 0.23% 0.20% 0.20%

0.10%

0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: : IMF, World Economic Outlook Database (GDP) / Thomson Reuters (2000-2006) & Invest Europe / EDC (2007-2016) 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 41 All Private Equity - Investments as % of GDP 2016 - Industry statistics: Location of the PE firm

1.000%

0.865% % ofGDP %

0.800%

0.664%

0.640% 0.613%

0.600% 0.440%

0.400%

0.336%

0.328%

0.299%

0.275%

0.234%

0.218%

0.209%

0.184% 0.167%

0.200% 0.161%

0.156%

0.107%

0.087%

0.079%

0.064%

0.028%

0.025%

0.023%

0.015%

0.012% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 42 Venture Capital - Investments as % of GDP 2016 - Industry statistics: Location of the PE firm

0.140%

% ofGDP % 0.120% 0.107%

0.100%

0.080%

0.060%

0.051%

0.048%

0.045%

0.041%

0.039%

0.038% 0.035%

0.040% 0.035%

0.031%

0.027%

0.025%

0.025% 0.020%

0.020% 0.018%

0.012%

0.008%

0.006%

0.004%

0.003%

0.001% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 43 Buyout - Investments as % of GDP 2016 - Industry statistics: Location of the PE firm

0.800%

0.700%

0.664% % ofGDP %

0.600%

0.553% 0.513%

0.500% 0.404%

0.400% 0.332%

0.300%

0.234%

0.210% 0.200%

0.200% 0.168%

0.150%

0.128%

0.125%

0.113% 0.103%

0.100% 0.076%

0.064%

0.056%

0.055%

0.029%

0.023%

0.008%

0.006%

0.000% 0.000% 0.000% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 44 Growth - Investments as % of GDP 2016 - Industry statistics: Location of the PE firm

0.250%

0.205% % ofGDP % 0.200%

0.150% 0.143% 0.136%

0.100%

0.085%

0.066%

0.062% 0.044%

0.050% 0.042%

0.037%

0.034%

0.017%

0.013%

0.011%

0.009%

0.008%

0.006%

0.002%

0.001%

0.000% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 45 All Private Equity - Investments as % of GDP 2016 - Market statistics: Location of the portfolio company

2.500%

2.138% % of GDP of % 2.000%

1.500%

1.000%

0.531%

0.530% 0.516%

0.500% 0.399%

0.391%

0.371%

0.354%

0.343%

0.337%

0.329%

0.304%

0.278%

0.277%

0.272%

0.211%

0.198%

0.172%

0.154%

0.087%

0.067%

0.053%

0.049%

0.030%

0.013% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 46 Venture Capital - Investments as % of GDP 2016 - Market statistics: Location of the portfolio company

0.090%

0.080% 0.077% % ofGDP %

0.070%

0.060% 0.051%

0.050%

0.040%

0.037% 0.036%

0.040% 0.036%

0.031%

0.030%

0.029%

0.028%

0.028% 0.027%

0.030% 0.026% 0.021%

0.020%

0.014%

0.012% 0.008%

0.010% 0.008%

0.005%

0.002%

0.001%

0.000% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 47 Buyout - Investments as % of GDP 2016 - Market statistics: Location of the portfolio company

1.600% 1.481%

1.400% % ofGDP %

1.200%

1.000%

0.800%

0.600%

0.466% 0.406%

0.400% 0.332%

0.309%

0.307%

0.298%

0.274%

0.248%

0.229%

0.216%

0.162%

0.161% 0.141%

0.200% 0.138%

0.118%

0.077%

0.076%

0.054%

0.048%

0.041%

0.029%

0.008%

0.000% 0.000% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 48 Growth - Investments as % of GDP 2016 - Market statistics: Location of the portfolio company

0.400% 0.350%

0.350% % ofGDP %

0.300% 0.254% 0.250%

0.200%

0.176% 0.159%

0.150%

0.123% 0.108%

0.100%

0.068%

0.061%

0.053%

0.050%

0.042% 0.041%

0.050% 0.037%

0.027%

0.023%

0.016%

0.013%

0.011% 0.011%

0.009%

0.007%

0.003%

0.001% 0.000% 0.000%

2016 2012-2016 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 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 49 All Private Equity - Investments by sector 2016 - Market statistics - % of Amount & Number of companies

0% 5% 10% 15% 20% 25% 30% 35%

Consumer goods & services 28.2% 17.0% ICT (Communications, computer and electronics) 20.3% 32.1% Business products & services 19.8% 18.3% Biotech & healthcare 11.0% 14.4% Energy & environment 5.6% 4.8% Financial & insurance activities 5.2% 2.8% Chemicals & materials 3.1% 1.8% Unclassified 2.1% 4.0% Amount Construction 2.0% 1.8% Number of companies Transportation 1.5% 1.5% Real estate 0.9% 0.5% Agriculture 0.4% 1.0%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 50 Investments by sector 2012-2016 - Market statistics - Amount

All Private Equity Venture Capital 60 5

50 4 €billion 40 €billion 3 30 2 20

10 1

0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Buyout Growth 40 10 35 9

30 8 €billion

€billion 7 25 6 20 5 15 4 3 10 2 5 1 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 51 Investments by sector 2012-2016 - Market statistics - Number of companies

All Private Equity Venture Capital 7,000 4,000 6,000 3,500 5,000 3,000 2,500 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Buyout Growth 1,200 2,500 1,000 2,000 800 1,500 600 1,000 400

200 500

0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 52 All Private Equity - Initial / Follow-on investments 2016 - Market statistics - % of Number of companies

48% 51% 57% 56% 54%

Follow-on investment for the company

Initial investment for the company

55% Initial investment for 51% 52% 47% 49% 49% 43% 44% 46% the private equity firm 39%

2012 2013 2014 2015 2016

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 53 Investments in SMEs 2016 - Market statistics - % of Number of companies & Amount

97%

84% 83% 79%

49%

33% 28% 21%

Buyout Growth Venture Capital All Private Equity

% Number of companies % Amount invested

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 54 3. DIVESTMENTS

Divestments statistics explained

Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the divestment. At European level, this relates to divestments made by European private equity firms regardless of the location of the portfolio company.

Market statistics are an aggregation of figures according to the location of the portfolio company. At European level, this relates to divestments of European companies regardless of the location of the private equity firm.

Divestment amounts (including write-offs) are recorded at cost (i.e. the total amount divested is equal to the total amount invested before).

The funds included in the statistics are: private equity funds making direct private equity investments, mezzanine private equity funds, co-investment funds and rescue/turnaround funds.

The following funds are excluded from the statistics: infrastructure funds, real estate funds, distressed debt funds, primary funds of funds, secondary funds of funds. Market versus industry statistics

Market statistics C C A + B + C

DD A

Industry statistics A + B + D A Domestic divestments in European countries

B Cross-border divestments within Europe

C Non-European private equity firms divesting portfolio companies in Europe D European private equity firms divesting portfolio companies outside Europe Glossary

Exit route

Management/ Owner buy-back: The buyer of the Sale to another private equity firm: The buyer of the company is its management team. portfolio company is a private equity firm.

Public offering: Sale to financial institution: A financial institution is - First divestment following flotation (IPO): The sale an entity that provides financial services for its or distribution of a private company’s shares to the clients: public for the first time by listing the company on the - Depositary Institutions: deposit-taking institutions stock exchange. that accept and manage deposits and make loans, - Sale of quoted equity post flotation: It includes sale including banks, building societies, credit unions, of quoted shares only if connected to a former private trust companies, and mortgage loan companies equity investment, e.g. sale of quoted shares after a - Contractual Institutions : Insurance companies and lock-up period. pension funds - Investment Institutes other than direct private Repayment of preference shares/ loans or mezzanine: equity firms. If the private equity firm provided loans or bought preference shares in the company at the time of Trade sale: The sale of a company's shares to investment, then their repayment according to the industrial investors. amortisation schedule represents a decrease of the financial claim of the firm into the company, and Write-off: The value of the investment is eliminated hence a divestment. and the return to investors is zero or negative.

2016 European Private Equity Activity 57 2016 Divestments at a glance

• About 3,500 European companies were exited in 2016, representing former equity investments Divestments – Market statistics – % total amount divested at cost (divestments at cost) of €38.5bn. Despite a decrease of 15% compared with 2015, the figure is in line with the annual average since 2012. • The most prominent exit routes by amount at cost were sale to another private equity firm (29%), trade sale (28%) and public offering (17%). By number of companies these three exit Other means routes accounted for more than a third of all divestments. Sale to 7% • Exits from venture capital investments represented nearly 1,300 exited companies or around management 35% of all divested companies in Europe. The equity amount divested increased by 13% to 7% €2.4bn in 2016 and accounted for 6% of the amount divested at cost. Trade sale, Trade sale management/owner buy-back, sale to a financial institution, and write-off were the most 28% prominent exit routes. Sale to financial • Buyout divestments’ share of all divestments in 2016 was 73% of the equity amount at cost and institution 23% by number of companies. The amount divested decreased by 19% to €28.1bn, with around 5% 800 companies exited. The figures follow two very strong exit years in 2014 and 2015 but are similar to the level recorded in 2013. Sale to another private equity firm, trade sale, and divestment by public offering were the most prominent exit routes. • Growth divestments represented 15% of all exits by equity amount at cost and 40% by number of companies. The amount divested decreased by 18% to €5.9bn and the number of companies decreased by 8% to 1,373. Trade sale, sale to another private equity firm, and management/owner buy-back were the most prominent exit routes. Sale to another private equity firm All Private Venture Public offering 2016 - Market statistics Buyout(1) Growth(1) 29% Equity Capital(1) 17% Divestments – Amount €38.5bn €2.4bn €28.1bn €5.9bn Repayment of preference Write-off Divestments – No. Companies 3,466 1,295 790 1,373 shares/ loans or mezzanine 1% 6% Number of Firms 614 280 299 260 Number of Funds 1,671 649 570 803

Source: Invest Europe / EDC Source: Invest Europe / EDC Note: (1) relates to the investment stage of the portfolio company 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 58 Divestments at cost – Venture Capital / Buyout / Growth 2012-2016 - Market statistics - Amount & Number of companies

60 1,600 Number of companies

1,400

50 € billion € 1,200 2.2 2.2 40 6.0 7.3 1,000 2.4 2.4

30 5.5 5.9 800

2.0 600 20 2.6 35.0 34.6 28.4 28.1 400 10 19.7 200

0 0 2012 2013 2014 2015 2016

Buyout - Amount divested Growth - Amount divested Venture Capital - Amount divested Buyout - Number of companies Growth - Number of companies Venture Capital - Number of companies

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 59 Divestments at cost by exit route – Venture Capital / Buyout / Growth 2016 - Market Statistics - % of Amount

7% 4% 5% 28%

Buyout 5% 7% €28.1bn 27% 20% 13% 31% 34%

20% 3% Venture Capital Growth 5% 0% €2.4bn €5.9bn 7% 15% 25% 4% 11% 3% 9% 6% 11%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 60 Divestments at cost by exit route – Venture Capital / Buyout / Growth 2016 - Market Statistics - % of Number of companies

14% 23%

13% Buyout 10% 6% 13% 16% 790 Companies 18% 5% 11% 3% 8% 6% 1% Venture Capital 15% Growth 6% 21% 11% 10% 1,295 Companies 1,373 Companies 17% 2% 7%

33% 31%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 61 All Private Equity - Divestments at cost by exit route 2012-2016 – Market statistics - Amount at cost

12 € billion €

0 2012 2013 2014 2015 2016

Trade sale Public offering Write-off Repayment of preference shares/ loans or mezzanine Sale to another private equity firm Sale to financial institution Sale to management Other means Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 62 All Private Equity - Divestments at cost by exit route 2012-2016 - Market statistics - Number of companies

1,200

1,000

800

600

400

200

0 2012 2013 2014 2015 2016

Trade sale Public offering Write-off Repayment of preference shares/ loans or mezzanine Sale to another private equity firm Sale to financial institution Sale to management Other means

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 63 All Private Equity - Divestments at cost by sector 2016 - Market statistics - Amount & Number of companies (excluding write-offs)

10 900 Number of companies exited 9.1 8.8 9 800 Amount at cost

€ billion € 8 700 Number of companies exited 7 6.3 600 6 500 5 846 4.3 4.0 400 4 665 624 300 3 200 2 336 1.5 1.4 1.0 0.8 100 1 147 0.5 29 99 69 80 109 16 0.1 0.1 62 0 0

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 64 Divestments at cost by sector – Venture Capital / Buyout / Growth 2016 - Market statistics - Amount (excluding write-offs)

40% ICT (Communications, computer and electronics) 14% 19% 23% Consumer goods and services 23% 25% 7% Business products and services 26% 25% 16% Biotech and healthcare 10% 14% 1% Financial and insurance activities 13% 4% 8% Energy and environment 2% 5% 0% Transportation 5% 3% 3% Construction 2% 2% Venture Capital 0% Chemicals and materials 5% Buyout 1% 0% Growth Real estate 2% 0% 0% Other 0% 1% 0% Agriculture 0% 1%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 65 Divestments at cost by sector – Venture Capital / Buyout / Growth 2016 - Market statistics - Number of companies (excluding write-offs)

17% Business products and services 32% 33% 35% ICT (Communications, computer and electronics) 13% 17% 15% Consumer goods and services 27% 20% 17% Biotech and healthcare 7% 9% 6% Energy and environment 2% 5% 2% Construction 4% 4% 2% Financial and insurance activities 5% 3% 2% Chemicals and materials 4% Venture Capital 2% Buyout 1% Transportation 4% 3% Growth 2% Other 0% 3% 1% Agriculture 1% 1% 0% Real estate 1% 0%

Source: Invest Europe / EDC 2016 European Private Equity Activity FUNDRAISING INVESTMENTS DIVESTMENTS 66 All Private Equity - Divestments at cost by region 2016 - Industry vs. Market statistics - % of Amount

18 16.5

16 € billion €

14 13.5 12.5 12

10 8.4 8

5.8 6.0 6 4.2 3.8 4 3.5 2.5 2 1.0 0.6 - UK & Ireland DACH Nordics France & Benelux Southern Europe CEE

Industry statistics - Country of the private equity firm Market statistics - Country of portfolio company

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. The following comprehensive and verified pan-European statistics would not be possible without their on-going 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):

AFIC – France FVCA – Finland

AIFI – Italy NVCA - Norway

ASCRI - Spain NVP - The Netherlands

BVA - Belgium PSIK - Poland

BVCA - UK SECA - Switzerland

BVK - Germany SEEPEA - South Eastern Europe

CVCA - The Czech Republic SVCA - Sweden

DVCA - Denmark About Invest Europe Research

INVEST EUROPE PEREP_ANALYTICS RESEARCH TEAM AUTHORISED STATISTICS PROVIDER FOR INVEST EUROPE

Research Director Statistics Manager Knowledge Manager Dr Cornelius Mueller Iuliana Furica Monica Biolan

Research Manager Statistics Team Julien Krantz Bianca Baciu Adriana Craciun Denisa Florea Stefania Sandu www.investeurope.eu Dina Valah

[email protected] [email protected]

2016 European Private Equity Activity 70 Invest Europe Bastion Tower T +32 2 715 00 20 Place du Champ de Mars 5 www.investeurope.eu B-1050 Brussels, Belgium