Investing in Europe: Private Equity Activity 2020 Investing in Europe: Private Equity Activity 2020
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 report 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 report. Invest Europe does not assume any responsibility for any person’s reliance upon the information contained herein. In furnishing this report, Invest Europe undertakes no obligation to provide any additional information or to update this report or any additional information or to correct any inaccuracies which may become apparent. Unless otherwise specified, this report 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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www.investeurope.eu/research 2 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
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 returns for in privately held Europe’s leading pension funds and insurers, to the benefit of the millions of European companies in Europe 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 2020
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 capital database of European 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 2020
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 hosts more than: >In 2016 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 3,700 10,200 definitions. Firms Funds >Improved coverage on a regional level mostly impacts the number of companies reported compared to earlier publications. Extensive audit efforts ensure that syndicated investments are not double-counted. 83,000 308,000 >Invest Europe processes all available information at the time of the data collection cut-off to Portfolio companies Transactions produce its annual statistics. Any differences between Invest Europe’s statistics and those of 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 With data on more than (www.investeurope.eu/research) or by contacting the research team 1,600 European private ([email protected]). equity and venture capital >Invest Europe members and data contributors are eligible to receive dedicated research and data support from our research team. Please contact us at [email protected] to find firms, the 2020 statistics out more about how to use this service. cover 89% of the €708bn* in capital under management in Europe.
* As of end 2019 www.investeurope.eu/research 5 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
What’s inside?
FOREWORD 7 FUNDRAISING INVESTMENTS DIVESTMENTS EXECUTIVE SUMMARY 9 AT A GLANCE 12 AT A GLANCE 38 AT A GLANCE 66 METHODOLOGY & GLOSSARY 78 INCREMENTAL FUNDRAISING QUARTERLY INVESTMENTS 40 BY EXIT ROUTE 68 ACKNOWLEDGEMENTS 83 BY FUND STAGE FOCUS 14 FOLLOW ON INVESTMENTS 41 BY SECTOR 73 ABOUT INVEST EUROPE RESEARCH 85 BY TIME PERIOD: H1 & H2 16 BY INVESTMENT STAGE BY REGION 76 CONCENTRATION OF CAPITAL 17 ALL PRIVATE EQUITY 42 HOLDING PERIOD 77 FIRST-TIME & FOLLOW-ON FUNDS 18 BUYOUT BY EQUITY BRACKET 45 BY REGION OF MANAGEMENT 20 BY GEOGRAPHY 47 INVESTORS BY TYPE 22 INVESTMENTS AS % OF GDP INVESTORS BY GEOGRAPHY 27 LOCATION OF THE PE FIRM 52 FINAL CLOSING LOCATION OF THE PORTFOLIO 57 BY FUND STAGE FOCUS 30 COMPANY CONCENTRATION OF CAPITAL 32 BY SECTOR 61 MEDIAN AND INTERQUARTILE 33 INVESTMENTS IN SMES 64
www.investeurope.eu/research 6 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Foreword
Private equity is a long-term asset class. The contracted in the second and third quarters, investments made today will yield results – before recovering strongly in the fourth and rewards – in several years’ time. Europe’s quarter. pension funds and insurers, among other investors, are committing capital to funds that By year-end, more than 8,100 European will help fund retirements for savers a decade companies received investments, amounting – or longer – from now. And private equity to €88 billion (market statistics), 12% less managers will invest that capital, as well as than the record €100 billion invested in 2019, their time, effort and own money, over many yet still 18% above the average of the previous years into building better businesses and five years. Fundraising reached €101 billion, creating jobs that can deliver the returns also falling back from 2019’s record high of Eric de Montgolfier, CEO, Invest Europe their investors require. €114 billion, although similarly well above the long-term average. It is that long-term model that makes private equity such a resilient asset class, as well as Despite the obvious disruption, the resilience an essential cornerstone of the European of private equity, combined with the belief in Private equity is already investing economy and society. its long-term ability to outperform, is in the recovery, providing abundantly evident in the data. It was the investment and support that will 2020 shook Europe, and the world, to its very second-strongest year on record for private core. From March onwards, lockdowns and equity investment as capital targeted core help companies – and their restrictions to control the spread of COVID-19 sectors that support digital growth, employees - rebound, adapt and severely affected people, businesses and consumption and long-term health: ICT prosper as Europe emerges economies. The private equity and venture accounted for 37% of investment; consumer capital industry was not immune. After a goods & services a further 19%; and biotech & from the crisis. strong start to the year, investment healthcare 15%.
www.investeurope.eu/research 7 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Private equity firms helped portfolio fuel pensions and savings in the decades to on performance and job creation companies through the crisis with follow-on come. demonstrates that European private equity’s equity investments totalling €26 billion in contribution to the economy has also scaled 2020. For more than half of European What is also clear from the data is the up – delivering returns that far outstrip companies invested in by the industry during importance of innovation and growth. Europe European listed equity benchmarks and the year, the 2020 investment included a has emerged as a centre of excellence for creating jobs at a rate five times higher than follow-on. dynamic businesses and new ideas. Venture the European market average. capital investment reached a record €12 Investment flowed to every region of Europe, billion in 2020, while growth posted its More than a year since the onset of COVID-19, led by France & Benelux (30%), and closely second-best year with €14.5 billion. In other European citizens and businesses still contend followed by the UK & Ireland (25%) and DACH words, almost a third of all investment with restrictions and challenges. There are (21%). A total of €32 billion was invested targeted fast-growing, entrepreneurial likely to be more bumps on the road ahead. across borders within Europe and by non- companies – predominantly SMEs. However, private equity is already investing European funds into Europe, underlining the in the recovery. Companies are receiving attractiveness of the continent to Investor capital is perfectly aligned with the investment and guidance that will help them international investors and the importance of trend. The venture capital and growth to rebound, adapt and prosper in the much- being able to deploy capital friction-free. segments both raised €15 billion in 2020 – changed European economy and society that the best-ever year for growth and the second- emerges from the crisis. Fundraising for European private equity best year for VC. That means more firepower topped €100 billion in 2020 for the third year for innovation, growth and the SMEs that are in a row, taking capital raised in the last five the backbone of the economy as Europe years to €500 billion. The record 672 funds rebuilds following the pandemic. raised will go a long way towards supporting companies – and their employees – in the The data illustrates the step change in Eric de Montgolfier recovery from COVID-19 and identifying new European private equity. A look at the graph CEO, Invest Europe investment opportunities. Pension funds and on page 10 shows that this is an industry insurers committed 39% of the capital, operating on an altogether larger scale than ensuring that private equity continues to help ever before. Invest Europe’s recent research
www.investeurope.eu/research 8 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Executive Summary
FUNDRAISING INVESTMENTS DIVESTMENTS
Total fundraising in Europe during 2020 reached €101bn, a The total equity amount invested in European companies Divestments at cost in 2020 are down 34% from the year 12% decrease from 2019 (a record year), but in line with decreased 12% year-on-year to €88bn in 2020, of which before, to €23bn. This is the lowest divestment level in a 2018 and 2017 amounts. A record number of 672 funds €26bn were follow-on investments from the fund. This decade. 3,160 European companies were exited during the raised capital during the year, the highest number of funds remains 18% above the 2015-2019 average. 8,163 year, an 18% decrease from 2019. recorded in the past few years - 15% above the average companies received investment, 5% below 2019 but 7% The main exit route by amount was sale to another private number of funds over the previous five years. above the average for the previous five years, 85% of which equity firm (35%), followed by trade sale (25%), and public Pension funds provided 29% of funds raised, followed by fund were SMEs. offering (12%). By number of companies, repayment of of funds & other asset managers (20%), and family offices & Most of the equity invested (64%) was domestic (within the preference shares / loans or mezzanine was the most popular private individuals (13%). North America accounted for the country), 29% was intra-European, and 7% from non-European exit route (34%), followed by trade sale (15%), and write-off highest proportion of fundraising (26%), followed by France & sources. Investments were concentrated in three main sectors: (12%). Average holding period for companies divested during Benelux (24%). In total 42% of the 2020 fundraising amount ICT (37%), consumer goods & services (19%), and biotech & the year was just under six years for all strategies except was committed by investors from outside Europe. healthcare (15%). buyout, where it was just above. Venture fundraising exceeded - for the second time - €15bn Venture capital investment reached €12bn in 2020. This is 7% Venture divestments in 2020 returned to 2018 levels after a raised in a year, with €15.5bn raised in 2020 (a 7% decrease growth from the year before and represents uninterrupted record year for the past decade in 2019. €2.3bn at cost were from 2019, the highest total ever recorded at €16.7bn). A growth in the stage since 2012. 5,005 companies received a divested, an 18% decrease year-on-year. 1,240 companies record number of 288 venture funds raised capital in 2020. venture investment in 2020 - 97% of these being SMEs - were divested, an 8% decrease. The main exit route by amount The top three sources of funds were government agencies representing more than 60% of the total number of companies was by trade sale (36%). 39% of exited companies were in the (30%), family offices & private individuals (18%), and fund of backed during the year. By sector, ICT remains the most ICT sector, followed by biotech and healthcare (18%), and funds & other asset managers (16%). The France & Benelux important sector, representing half of venture capital business products and services (16%). region continued to be the principal source of capital, with a investment, followed by biotech & healthcare (23%). Buyout divestments saw the heaviest year-on-year decrease, a record €5bn committed from the region. Buyout investments decreased by 11% year-on-year to €60bn 40% year-on-year drop to €16bn in 2020. 619 companies were Buyout fundraising reached €62bn in 2020, down 23% from (still representing 68% of total investment). For the first time divested, down 29% from 2019. The main exit route by amount 2019 – the highest year ever recorded with €81bn. Pension Mega buyout transactions (> €300m equity) accounted for the was sale to another private equity firm (42%), and by number funds provided the most capital (37%) and capital from outside most investment, representing 41% of the buyout investments. of companies was trade sale (21%). Business products & of Europe remained an important source of funds (54%). Mid-market buyout (€15 - €150m) closely followed (36%). By services was the sector with most exits by number of Growth fundraising reached the highest level recorded, with sector, ICT companies received 35% of the total buyout companies (31%). €15bn, a 41% increase compared to 2019. A record number of investments, followed by consumer goods & services (20%), Growth divestments amounted to €4bn in 2020, a 24% 159 growth funds raised capital in 2020. Pension funds and business products & services (17%). decrease. 1,309 growth companies were divested, 41% of all provided the most capital for the year (22%). Growth investments saw a 26% year-on-year decrease to €14bn private equity divested companies for the year. The main exit in 2020. The number of companies receiving growth route by amount was sale to another private equity firm (23%). investment dropped 9% to 1,886. ICT received the highest Companies in the consumer goods & services sector (24%) saw level of investment (41%). the most exits.
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Overview - All Private Equity - Fundraising, Investments, & Divestments 2000–2020 - Industry statistics – Amount
FUNDRAISING INVESTMENTS DIVESTMENTS
120 120 120 112 114
103 104
€ billion € 101 100 97 100 100
86 83 84 85 81 79 80 80 77 80 72 71
61 60 61 57 57 60 55 60 60 50 49 48 47 46 48 46 44 46 42 44 40 40 38 40 37 37 37 37 40 35 40 33 29 30 29 28 27 27 29 28 27 26 24 26 25 21 20 22 20 20 20 16 16 12 14 9 11
- - -
Invest Europe statistics explained: This graph shows ‘industry statistics’ capturing activity of 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 (2007-2020) www.investeurope.eu/research 10 Investing in Europe: Private Equity Activity 2020
ACTIVITY 2020 FUNDRAISING
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Fundraising at a glance 2020 - Analysis
> Total fundraising in Europe during 2020 reached €101bn, a 12% decrease from 2019 (which was a record year with €114bn). The All Private Equity figure however is in line with the level observed in 2018 (€103bn) and 2017 (€97bn). This remains largely above the yearly amounts raised by the industry since 2009. H1/H2 analysis shows that fundraising in the first half of the year was not Amount raised by funds €101bn 672 disproportionally affected by the pandemic: amount raised for H1 as % of the total was in line with levels seen historically.
Final closing €79bn by 229 funds > A record number of 672 funds raised capital during the year, the highest number of funds recorded in the past few years - 15% above the average number of funds over the previous five years. Venture Capital > Pension funds provided 29% of funds raised, followed by fund of funds & other asset managers (20%), and family offices & private individuals (13%). North America accounted for the highest proportion of fundraising (26%), followed by France & Benelux (24%). In Amount raised €16bn by 288 funds total, 42% was committed by investors from outside Europe. > 229 funds reached their final closing during 2020, raising a total amount of almost €80bn since inception. The 14 funds raising Final closing €11bn by 90 funds more than €1bn on final closing represented 60% of the total amount raised.
> Venture fundraising exceeded - for the second time - €15bn raised in a year, with €15.5bn raised in 2020, a 7% decrease from Buyout 2019 (the highest total ever recorded, at €16.7bn). Funds focusing on all stages of Venture continued to raise the largest share (46%), but more focused funds reached record fundraising amounts. A record number of 288 venture funds raised capital in 2020 – Amount raised €62bn by 125 funds 79 of them were first-time funds. The top three sources of funds were government agencies (30%), family offices & private individuals (18%), and fund of funds & other asset managers (16%). The France & Benelux region continued to be the principal Final closing €52bn by 65 funds source of capital, with a record €5bn committed from the region.
> Buyout fundraising reached €62bn in 2020, down 23% from 2019 – the highest year ever recorded, with €81bn. 125 buyout funds raised capital in 2020, a number in line with the 5-year average. Pension funds provided the most capital (37%), followed by fund Growth of funds & other asset managers (19%), and sovereign wealth funds (12%). Capital from outside of Europe remained an important source (54%) whilst the UK & Ireland represented 14%, and France & Benelux 12%. Amount raised €15bn by 159 funds > Growth fundraising reached the highest level recorded (€15bn), a 41% increase compared to 2019. A record number of 159 growth Final closing €11bn by 44 funds funds raised capital in 2020. Pension funds provided the most capital for the year (22%), followed by fund of funds & other asset managers (21%), and family offices & private individuals (15%). Note: Amount raised represents incremental amount raised. Final closing represents cumulative amount raised. www.investeurope.eu/research 12 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Fundraising at a glance 2007-2020 – Europe - Incremental amount raised during the year
€114.5bn
5.5 €102.9bn 0.4 €100.5bn €96.6bn 10.9 11.0 7.0 5.3 0.3 €82.7bn €84.1bn 1.0 0.8 €80.8bn 7.4 10.1 15.4 6.8 6.8 0.8 11.8 3.0 4.8 4.3 €60.8bn 2.3 €57.0bn €54.7bn 5.7 80.9 0.4 5.9 8.3 7.8 1.6 €40.1bn 3.8 3.4 72.7 68.3 62.3 3.3 65.9 62.7 54.6 7.1 €28.5bn €25.9bn 2.7 2.0 €21.2bn 3.5 44.1 7.3 1.6 38.0 33.5 5.7 2.9 23.9 1.1 17.8 10.4 11.6 12.6 16.7 15.5 7.9 9.1 10.3 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 2020
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 2020
Funds raised by fund stage focus 2016-2020 - Incremental amount raised during the year
20 Total Venture Capital 90 Venture (all stages) Later-stage 80.9 18 Early-stage 80
€ € billion 16.7 € € billion 72.7 16 15.5 15.4 70 68.3 62.7 62.3 14 12.6 60
12 7.2 10.3 10.9 11.0 10.3 10.1 50 10 9.1 5.9 40 7.4 8 7.0 2.2 6.8 7.0 5.3 30 6 5.3 5.5 2.1 1.7 4.8 20 4 0.4 0.7 6.1 2 4.6 4.8 10 3.4 0.8 1.0 0.8 2.5 0.4 0.3 0 0 Venture Capital Growth Mezzanine Generalist Buyout
2016 2017 2018 2019 2020 Source: Invest Europe / EDC www.investeurope.eu/research 14 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Funds raised by fund stage focus 2016-2020 - Number of funds that reached first, intermediate or final closing during the year
350 Total Venture Capital Venture (all stages) Later-stage Early-stage 288 300 279 261
Number of funds of Number 250
203 133 142 200 134 171 159 150 150 137 135 134 134 124 129 128 130 35 121 125 109 15 106 104 44 98 100 76 15 5 112 120 50 93 57 64 8 11 6 3 2 0 Venture Capital Growth Mezzanine Generalist Buyout
2016 2017 2018 2019 2020 Source: Invest Europe / EDC www.investeurope.eu/research 15 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Funds raised by time period: H1 & H2 2007-2020 – All private equity - % amount (incremental) raised, and number of funds
Amount raised Number of funds completing a fundraising
100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% H2 50% H2
40% H1 40% H1
30% 30%
20% 20%
10% 10%
0% 0%
Source: Invest Europe / EDC www.investeurope.eu/research 16 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Concentration of capital 2016-2020 - Incremental fundraising by amount bracket per fund during the year
60% Number 17 18 of 10 14 14 funds 50%
40%
30%
20%
40 20
% total amount of annual fundraising annual total % of amount 23 83 18 20 539 61 14 463 83 502 509 33 10% 382 31 82 66 28 28
0% 2016 2017 2018 2019 2020
< €100m €100m - €250m €250m - €500m €500m - €1bn > €1bn
Source: Invest Europe / EDC www.investeurope.eu/research 17 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity – Funds raised by first-time and follow-on funds 2016-2020 - Incremental amount raised during the year
Fundraising 18 90
Follow-on fund
16 80
€ billion € € billion € First-time fund 14 70
12 60
10 13.1 50 11.7 13.4 71.8 8 40 6.4 66.4 10.4 5.8 7.8 64.8 7.1 58.2 59.9 6 30 6.2 3.4
4 5.8 6.4 20 2.5 4.1 4.3 4.3 4.4 1.0 2 3.6 4.0 3.7 0.7 0.7 10 2.9 3.2 0.0 0.3 0.0 3.3 2.2 2.1 2.3 0.0 0.1 0.2 0.3 9.1 1.0 1.2 1.2 4.5 6.2 3.5 0 0.6 0 2.4 Venture Capital Growth Mezzanine Generalist Buyout
2016 2017 2018 2019 2020 Source: Invest Europe / EDC www.investeurope.eu/research 18 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity – Funds raised by first-time fund and follow-on fund 2016-2020 - Number of funds that reached first, intermediate or final closing during the year
Fundraising 275
250 Follow-on fund
225 First-time fund Number of funds of Number 200 190 209 175 179
150 138 125 114 110 100 81 82 123 86 104 96 75 111 109 85 97 84 87 50 43 89 89 82 79 65 57 56 7 25 43 46 49 4 7 33 1 0 36 38 2 1 4 27 24 30 28 2 2 21 22 17 0 9 Venture Capital Growth Mezzanine Generalist Buyout
2016 2017 2018 2019 2020 Source: Invest Europe / EDC www.investeurope.eu/research 19 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Funds raised by region of management 2016-2020 - Incremental amount raised during the year – € billion
€114bn 1.6 €103bn 4.8 €101bn €97bn 1.4 1.0 1.5 5.9 4.4 5.4 28.7 €84bn 0.8 23.3 4.5 27.8 26.1 6.3 20.3 8.5 14.1 9.9 8.5 6.1 7.3 6.5 3.8 7.7
64.6 48.6 47.3 50.9 50.9
2016 2017 2018 2019 2020
UK & Ireland DACH Nordics France & Benelux Southern Europe CEE Source: Invest Europe / EDC www.investeurope.eu/research 20 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Funds raised by region of management and investor type 2020 - Incremental amount raised during the year - % of total amount
100% 4% 2% 1% 0% 7% 5% 3% 10% 3% 1% 8% 4% 2% 90% 3% 5% 1% 4% 6% 17% 9% 80% 15% 23% Academic inst. / Endowments / Foundations
19% 37% Banks 70% 19% 16% Capital markets 60% 21% 14% 1% 6% Corporate investors 7% 4% 50% Family offices & Private individuals 30% 15% 14% Fund of funds & Other asset managers 40% Government agencies 30% 39% 38% 10% 47% Insurance companies 20% 28% 2% 20% Pension funds Sovereign wealth funds 19% 10% 13% 4% 12% 12% 0% 2% 7% 5% 0% 3% 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 21 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Funds raised by type of investor 2020 - Incremental amount raised during the year - % of total amount
All Private Equity Venture Capital funds Buyout funds Growth funds (672 funds, 436 firms) (288 funds, 220 firms) (125 funds, 106 firms) (159 funds, 100 firms)
Academic institutions 0% 1% 0% 1%
Banks 5% 4% 4% 5%
Capital markets 1% 0% 2% 2%
Corporate investors 3% 10% 2% 4%
Endowments and foundations 3% 3% 3% 6%
Family offices 7% 7% 5% 10%
Fund of funds 13% 12% 14% 10%
Government agencies 7% 30% 2% 9%
Insurance companies 10% 8% 9% 12%
Other asset managers 6% 4% 5% 11%
Pension funds 29% 9% 37% 22%
Private individuals 7% 11% 6% 5%
Sovereign wealth funds 9% 1% 12% 4%
Source: Invest Europe / EDC www.investeurope.eu/research 22 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Funds raised by type of investor 2016-2020 - Incremental amount raised during the year - % of total amount
35% 140
Academic inst. Endowments / Foundations 30% 120 Banks €114bn Capital markets 25% €103bn 100 €100bn €97bn Corporate investors
20% €84bn 80 Family offices & Private individuals
Fund of funds & Other asset managers 15% 60 Government agencies
Insurance companies 10% 40 Pension funds
Sovereign wealth funds 5% 20 New funds raised (excluding capital gains)
0% 0 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 23 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Venture Capital - Funds raised by type of investor 2016-2020 - Incremental amount raised during the year - % of total amount
35% 18
€17bn 16 Academic inst. Endowments / Foundations 30% €15bn Banks 14 25% Capital markets 12 €13bn Corporate investors
20% 10 Family offices & Private individuals €10bn Fund of funds & Other asset managers €9bn 15% 8 Government agencies
6 Insurance companies 10% Pension funds 4 Sovereign wealth funds 5% 2 New funds raised (excluding capital gains)
0% 0 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 24 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Buyout - Funds raised by type of investor 2016-2020 - Incremental amount raised during the year - % of total amount
45% 90
40% 80 Academic inst. Endowments / Foundations €81bn Banks 35% €73bn 70 €68bn Capital markets 30% 60 €63bn €62bn Corporate investors
25% 50 Family offices & Private individuals
Fund of funds & Other asset managers 20% 40 Government agencies
15% 30 Insurance companies
Pension funds 10% 20 Sovereign wealth funds 5% 10 New funds raised (excluding capital gains)
0% 0 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 25 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Growth - Funds raised by type of investor 2016-2020 - Incremental amount raised during the year - % of total amount
35% 18
16 Academic inst. Endowments / Foundations 30% €15bn Banks 14 25% Capital markets 12 Corporate investors
20% €11bn 10 Family offices & Private individuals €10bn Fund of funds & Other asset managers 15% 8 Government agencies €7bn 6 Insurance companies 10%
€5bn 4 Pension funds
5% Sovereign wealth funds 2 New funds raised (excluding capital gains) 0% 0 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 26 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Fundraising geographic breakdown 2020 (2019) - Source of funds - % of total amount
5.5% (4.5%) North America 25.9% Australia & Asia (27.2%) 15.1% (16.1%) Rest of the world 1.3% 11.6% (1.0%) (9.6%) 7.1% (8.4%) 0.6% 24.4% (1.2%) (26.0%)
Unclassified Europe 3.4% 4.9% (2.1%) (3.8%) Source: Invest Europe / EDC www.investeurope.eu/research 27 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Venture Capital - Fundraising geographic breakdown 2020 (2019) - Source of funds - % of total amount
6.6% (8.3%) North America 9.6% Australia & Asia (10.2%) 3.8% (4.8%) Rest of the world 0.4% 10.0% (0.7%) (12.6%) 6.4% (16.2%) 3.5% 44.3% (5.0%) (32.4%)
Unclassified Europe 1.2% 14.3% (2.0%) (7.8%) Source: Invest Europe / EDC www.investeurope.eu/research 28 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Buyout - Fundraising geographic breakdown 2020 (2019) - Source of funds - % of total amount
3.5% (6.9%) North America 31.4% Australia & Asia (32.9%) 20.9% (20.7%) Rest of the world 2.0% 13.7% (1.2%) (8.9%) 6.4% (4.3%) 0.1% 12.4% (0.4%) (20.4%)
Unclassified Europe 2.4% 2.9% (1.5%) (2.4%) Source: Invest Europe / EDC www.investeurope.eu/research 29 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Final closing - Funds raised by fund stage focus 2016-2020 - Final closing during the year - Amount(1)
Total Venture Capital
Venture (all stages) Later-stage Early-stage 12 80 77.4 11.0 11.2 72.7 10.6 10.5
70 € € billion 10 € billion 8.7 60 55.0 55.8 5.4 4.5 8 51.8 50 3.0 6.0 5.9 6 5.5 40 5.0 1.3 5.0 1.4 1.5 4.2 30 4 2.7 4.6 3.1 2.8 20 2.3 4.9 0.3 1.9 2 4.4 4.1 10 0.2 0.9 2.1 0.2 0.4 1.1 0.0 0.0 0 0 Venture Capital Growth Mezzanine Generalist Buyout 2016 2017 2018 2019 2020 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 30 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Final closing - Funds raised by fund stage focus 2016-2020 - Final closing during the year – Number of funds(1)
Total Venture Capital
Venture (all stages) Later-stage 140 Early-stage
120 120 105
100 Number of funds of Number 50 90
42 80 80 76 32 62 61 65 62 60 7 25 12 48 34 34 42 44 40 38 34 31 28 28 30 2 56 23 7 21 20 45 46 26 20 2 1 2 0 0 0 Venture Capital Growth Mezzanine Generalist Buyout 2016 2017 2018 2019 2020 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. www.investeurope.eu/research 31 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Final closing - All Private Equity - Concentration of capital 2016-2020 - Final closing during the year - Amount(1) & Number of funds(2)
80% Number of 70% 17 funds 10 16 60% 14
50% 9
40%
30%
22 20%
% total amount of annual fundraising of total % annualamount 18 28 27 19 49 10% 10 13 21 32 40 54 22 26 63 127 89 106 122 139 0% 2016 2017 2018 2019 2020 < €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 32 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Final closing - All Private Equity - box-and-whisker plot 2007–2020 - Final closing during the year - Median & Interquartile range
1,000 Upper Whisker Greatest observation
900 excluding outliers* € million € 800 Third Quartile (Q3) 700 75% of data are ≤ than the upper box value 600 Median 500 50% of data are ≤ than this value 400 First Quartile (Q1) 300 25% of data are ≤ than the lower box value 200
100 Lower Whisker Lowest observation excluding outliers* - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1st 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 2020
Final closing – Venture Capital - box-and-whisker plot 2007–2020 - Final closing during the year - Median & Interquartile range
400 Upper Whisker Greatest observation
350 excluding outliers* € € million
300 Third Quartile (Q3) 75% of data are ≤ than the upper box value 250 Median 200 50% of data are ≤ than this value
150 First Quartile (Q1) 25% of data are ≤ than the lower box value 100
50 Lower Whisker Lowest observation excluding outliers* - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1st 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 2020
Final closing – Buyout - box-and-whisker plot 2007–2020 - Final closing during the year - Median & Interquartile range
4,500 Upper Whisker Greatest observation
4,000 excluding outliers* € € million 3,500 Third Quartile (Q3) 75% of data are ≤ than 3,000 the upper box value
2,500 Median 50% of data are ≤ than this value 2,000
First Quartile (Q1) 1,500 25% of data are ≤ than the lower box value 1,000
Lower Whisker 500 Lowest observation excluding outliers* - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1st 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: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Final closing – Growth - box-and-whisker plot 2007–2020 - Final closing during the year - Median & Interquartile range
800 Upper Whisker Greatest observation
700 excluding outliers* € € million
600 Third Quartile (Q3) 75% of data are ≤ than the upper box value 500
Median 400 50% of data are ≤ than this value
300 First Quartile (Q1) 25% of data are ≤ than 200 the lower box value
100 Lower Whisker Lowest observation - excluding outliers* 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1st 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 36 Investing in Europe: Private Equity Activity 2020
ACTIVITY 2020 INVESTMENTS
www.investeurope.eu/research 37 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments at a glance 2020 Analysis
All Private Equity > The total equity amount invested in European companies decreased 12% year-on-year to €88bn in 2020, of which €26bn were follow-on investments from the fund. This remains 18% above the 2015-2019 average. 8,163 companies received investment, 5% €88bn into 8,163 companies below 2019 but 7% above the average for the previous five years, 85% of which were SMEs. 64% of equity invested was domestic (within the country), 29% was intra-European, and 7% from non-European sources. Investments were concentrated in three main by 1,508 firms & 2,968 funds sectors: ICT (37%), consumer goods & services (19%), and biotech & healthcare (15%). ICT received almost €33bn of investments, and biotech & healthcare €13bn, both achieving their highest levels of investment ever recorded.
> Distribution of investments made throughout the year does seem to have been affected - to a certain degree - by the pandemic: Venture Capital the % of the 2020 total amount invested in Q2 was the smallest of all Q2 percentages from 2016-2020. In a similar vein, follow-on investments for funds in H1 2020 as % of total follow-on investments for the year reached a high for the period 2016-2020: 56%. €12bn into 5,005 companies This is probably due to a move by GPs to provide increased support to existing portfolio companies. by 1,024 firms & 1,782 funds > Venture capital investment reached €12bn in 2020. This is 7% growth from the year before and represents uninterrupted growth in the stage since 2012. 5,005 companies received a venture investment in 2020 - 97% of these being SMEs - representing more than 60% of the total number of companies backed during the year. Start up investments surpassed the 2019 record amount with a 3% increase from 2019, taking 52% of total Venture capital investment. By sector, ICT remains key (half of Venture capital Buyout investment), followed by biotech & healthcare (23%), and consumer goods & services (10%). €60bn into 1,181 companies > Buyout investments decreased by 11% year-on-year to €60bn (still representing 68% of total investment). The mega buyout segment (> €300m equity) has been subject to record levels of investment since 2017, and for the first time accounted for the by 441 firms & 769 funds most investment within the broader buyout investment stage: €24bn equity invested, representing 41% of the buyout investments. Mid-market buyout (€15 - €150m) closely followed with €22bn, or 36% of the total. By sector, ICT companies received €20bn of investments, representing the largest share with 35% of the total buyout investments, followed by consumer goods & services (20%), and business products & services (17%). Growth > Growth investments saw a 26% year-on-year decrease to €14bn in 2020. The number of companies receiving growth investment €14bn into 1,886 companies dropped 9% to 1,886. ICT received the highest level of investment (41%), followed by consumer goods & services (18%), and business products & services (12%). by 569 firms & 1,182 funds > Private equity continued to be a significant contributor to European GDP. By location of the PE firm, investments represented 0.51% of European GDP in 2020. This is a slight decrease compared to 2019, which was the highest level ever recorded at 0.58%. www.investeurope.eu/research 38 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments at a glance 2007-2020 – Europe – Market statistics – Amount & Number of companies
6,000 4,788 5,003 5,005 160 3,958 Venture 3,635 3,848 3,664 3,742 3,714 3,407 3,378 3,399 3,526 3,552 4,000 140 Growth 2,313 2,272 1,945 2,019 2,130 2,003 2,181 2,066 2,136 2,082 1,677 1,886 1,456 1,381 2,000 Buyout 120 1,181 1,376 1,317 1,249 1,353 1,011 909 1,017 984 938 1,063 1,077 1,083 777 €100.4bn 0 100 €88.1bn €85.0bn 19.5 €75.9bn €75.3bn -2,000 80 14.5 Other 14.1 5.4 €59.7bn 11.9 -4,000
€ billion companies of Number € billion €58.2bn Growth 60 €55.7bn €47.9bn €48.7bn 9.0 €43.6bn Buyout €41.3bn €41.2bn 11.4 11.5
67.4 -6,000 40 8.1 9.8 59.7 62.4 7.7 60.2 Venture Capital €25.8bn 6.5 6.8 53.2 42.7 39.4 37.4 -8,000 34.1 20 6.4 29.9 29.3 28.7 33.1 13.5 11.2 12.0 5.6 5.8 7.2 8.9 0 3.5 3.5 3.8 3.2 3.6 3.8 4.7 5.0 -10,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Invest Europe / EDC. Note: Other includes Rescue/Turnaround and Replacement capital www.investeurope.eu/research 39 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Quarterly investments 2016–2020 – Quarterly investments – Amount & Number of companies
Amount - € thousands Number of companies invested into
100% 100%
90% 90%
80% 80%
70% 70%
60% 60% Q4 Q4 50% Q3 50% Q3 Q2 Q2 40% 40% Q1 Q1
30% 30%
20% 20%
10% 10%
0% 0% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 40 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity – Follow-on investments (GP perspective1) 2016-2020 – Investments – Market statistics – Amount & No. of companies
Amount Number of companies
€14.3bn 2,556 2,490 €13.0bn 2,405 2,306 2,311 2,342 2,303 2,239 €11.4bn €11.0bn 2,044 €10.7bn 1,960 €9.9bn €9.6bn
€8.1bn
€6.9bn €7.0bn
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Note 1: follow-on investment levels stated in this slide are based on classification of the investment from the perspective of the GP Source: Invest Europe / EDC www.investeurope.eu/research 41 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by stage 2020 - Market statistics - Amount & Number of companies
Seed 0.9% Start-up 7.1% Buyout Seed Later-stage 14.4% 15.8% venture Replacement 5.7% capital 0.7%
Rescue/ Growth Turnaround capital 0.8% 16.4%
€88bn invested 8,163 European companies in European companies invested with Private Equity
Buyout 67.8% Growth Rescue/ capital Turnaround 22.9% 1.0% Start-up 33.6% Replacement capital 1.2% Later-stage venture 11.7%
Source: Invest Europe / EDC www.investeurope.eu/research 42 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by stage 2016-2020 - Market statistics - Amount
20 70
18 € € billion € € billion 60 16
14 50 12.0 12 11.2 40 10 8.9 19.5 5.0 67.4 4.3 30 60.2 59.7 8 7.2 2.8 53.2 14.1 14.5 6 2.6 11.9 5.0 11.5 20 39.4
4 2.0 6.0 6.2 5.3 3.8 10 2 2.6 2.3 1.8 1.6 2.1 0.9 1.0 0 0.5 0.6 0.8 0.7 0.8 0.3 0.8 0.3 0.8 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital
Source: Invest Europe / EDC www.investeurope.eu/research 43 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by stage 2016-2020 - Market statistics – Number of companies
6,000
4,788 5,003 5,005 5,000
790 816 958 3,958 4,000 3,552
700 Number of companies of Number 772 3,000 2,779 2,977 2,766
2,324 2,000 2,088
2,272 2,066 2,136 2,082 1,000 1,886 1,433 1,303 1,353 1,376 1,108 1,237 1,249 1,181 918 1,083 66 102 71 86 57 74 48 78 66 61 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital
Source: Invest Europe / EDC www.investeurope.eu/research 44 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Buyout - Investments by equity bracket 2016-2020 - Market statistics - Amount & Number of companies
100 826 856 764 759 Mega (> €300m) 671 536 536 90 438 489 443 Large (€150m - €300m) 500
80 Mid-market (€15m - €150m) 47 46 52 64 42
70 39 0 Small (<€15m) 13 38 35 36
60 22.7
-500 50 20.2 24.3 18.3 Mega (>€300m)
40 5.6 14.7 Large (€150m - €300m) 11.8 -1,000
30 9.9
10.2 9.3 Mid-market (€15m - €150m) € billion € of companies billion Number
20 Small (<€15m) 23.6 24.8 -1,500 19.9 21.3 21.8
10
4.3 4.6 5.3 3.7 0 3.6 -2,000 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 45 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Mid-market buyout - Investments by equity bracket 2016-2020 - Market statistics - Amount & Number of companies
45 600
396 417 414 40 Lower mid-market (€15m - €50m) 344 316 400 Core mid-market (€50m - €100m) 35 119 200 82 81 100 93 Upper mid-market (€100m - €150m)
30
0 25 29 32 48 33
25
-200 4.2 5.9
20 3.8 4.0 Upper mid-market (€100m - €150m) 3.1
-400 7.1 15 6.3 5.6 Core mid-market (€50m - €100m) 5.9 8.6
-600 Lower mid-market (€15m - €50m) € billion € of companies billion Number 10
11.9 12.3 12.6 -800 5 10.9 9.2
- -1000 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 46 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Geographical investment flows 2020 - Domestic vs. International investments - Amount
Non-European private equity firms investing into portfolio companies in Europe €6.3bn €56.1bn €25.7bn Domestic Cross-border investments investments in European within Europe countries
€4.6bn European private equity firms investing into portfolio companies outside Europe
Source: Invest Europe / EDC www.investeurope.eu/research 47 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Venture Capital - Geographical investment flows 2020 - Domestic vs. International investments - Amount
Non-European private equity firms investing into portfolio companies in Europe €1.7bn €6.8bn €3.5bn Domestic Cross-border investments investments in European within Europe countries
€1.5bn European private equity firms investing into portfolio companies outside Europe
Source: Invest Europe / EDC www.investeurope.eu/research 48 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Investments by region 2020 - Industry vs. Market statistics - Amount
CEE CEE Nordics 1% Nordics 2% 6% 8% Southern UK & Ireland Europe 25% 9% Southern UK & Ireland Europe 39% 14%
DACH Industry statistics Market statistics 14% Investments according to Investments according to the Private Equity firm’s location the portfolio company’s location
DACH 21% France & Benelux France & 30% Benelux 31%
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 49 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by stage and region 2020 - Market statistics - Amount
6 20
18 17.5 € € billion 5 € billion 16
13.9 14 13.6 4 3.4 12 3.1 3 10 9.6 2.6 1.5 4.9 8 1.6 4.5 0.7 2 6 1.3 1.2 4.2 4 1.7 1 1.7 0.5 0.6 1.4 1.7 1.5 1.3 0.4 2 0.6 0.7 0.8 0.5 0.1 0.5 0.4 0.0 0.3 0.0 0.0 0.2 0.0 0.0 0 0.2 0.1 0.2 0.1 0.2 0.2 0.1 0.2 0.1 0.1 0 UK & Ireland France & Benelux DACH Southern Europe Nordics CEE
Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital Source: Invest Europe / EDC www.investeurope.eu/research 50 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by stage and region 2020 - Market statistics - Number of companies
1,400
1,180 1,200 1,074
261 1,000 927
Number of companies of Number 348 124 800 696 654 101 600 91 600 727 474 505 588 500 546 33 880 400 392 342 400 171 300 194 200 176 200 397 140 132 289 274 100 189 194 218 206 222 34 19 21 143 120 11 20 8 4 12 12 13 5 1 1 0 0 57 UK & Ireland France & Benelux DACH Southern Europe Nordics CEE
Seed Start-up Later-stage venture Growth Rescue/Turnaround Replacement capital Buyout Venture Capital Source: Invest Europe / EDC www.investeurope.eu/research 51 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Investments as % of European GDP 2000–2020 - Industry statistics - Location of the private equity firm
0.70%
0.58%
0.60% 0.57% % of GDP of % 0.55% 0.51% 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% 0.26% 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 2017 2018 2019 2020
Source: : IMF, World Economic Outlook Database (GDP) / Thomson Reuters (2000-2006) & Invest Europe / EDC (2007-2020) www.investeurope.eu/research 52 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Investments as % of GDP 2020 - Industry statistics - Location of the private equity firm
2.5% % of of % GDP 2.0%
1.5%
1.394% 1.193%
1.0%
0.819%
0.780%
0.608% 0.512%
0.5% 0.403%
0.358%
0.319%
0.299%
0.281%
0.245%
0.228%
0.214%
0.142%
0.105%
0.070%
0.068%
0.060%
0.048%
0.044%
0.034%
0.026%
0.024%
0.009% 0.008% 0.0%
2020 2016-2020 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 2020
Venture Capital - Investments as % of GDP 2020 - Industry statistics - Location of the private equity firm
0.30% 0.246% % of of % GDP 0.25%
0.20%
0.15% 0.139%
0.116%
0.111%
0.107%
0.100% 0.098%
0.10%
0.087%
0.079%
0.078%
0.070%
0.064%
0.056% 0.051%
0.05% 0.043%
0.037%
0.023%
0.023%
0.020%
0.020%
0.019%
0.015%
0.013%
0.012%
0.007% 0.004% 0.00%
2020 2016-2020 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 2020
Buyout - Investments as % of GDP 2020 - Industry statistics - Location of the private equity firm
2.0%
1.8% % of of % GDP
1.6%
1.4%
1.2%
1.0% 0.970% 0.793%
0.8% 0.623%
0.6% 0.532% 0.405%
0.4% 0.346%
0.266%
0.231%
0.225%
0.166% 0.141%
0.2% 0.121%
0.107%
0.069%
0.062%
0.032%
0.017%
0.014%
0.005%
0.001%
0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.0%
2020 2016-2020 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 2020
Growth - Investments as % of GDP 2020 - Industry statistics - Location of the private equity firm
0.30% 0.254%
% of of % GDP 0.25%
0.20%
0.180% 0.152%
0.15% 0.114%
0.10%
0.087%
0.087%
0.085%
0.073% 0.055%
0.05% 0.038%
0.036%
0.023%
0.022%
0.022%
0.022%
0.021%
0.017%
0.014%
0.013%
0.012%
0.006%
0.004%
0.004%
0.004%
0.002% 0.001% 0.00%
2020 2016-2020 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 2020
All Private Equity - Investments as % of GDP 2020 - Market statistics - Location of the portfolio company
1.2% % of of % GDP
1.0% 0.953% 0.902%
0.8%
0.736%
0.731% 0.613%
0.6% 0.553%
0.546%
0.522%
0.478%
0.446%
0.391% 0.386%
0.4% 0.354%
0.341%
0.339%
0.326% 0.179%
0.2% 0.167%
0.132%
0.107%
0.083%
0.072%
0.067%
0.040%
0.034% 0.015% 0.0%
2020 2016-2020 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 2020
Venture Capital - Investments as % of GDP 2020 - Market statistics - Location of the portfolio company
0.25%
% of of % GDP 0.209%
0.20%
0.15%
0.118%
0.113%
0.098% 0.093%
0.10% 0.093%
0.090%
0.084%
0.083%
0.081%
0.072%
0.071%
0.070% 0.058%
0.05%
0.033%
0.028%
0.027%
0.022%
0.020%
0.020%
0.019%
0.013%
0.012%
0.011%
0.007% 0.005% 0.00%
2020 2016-2020 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 58 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Buyout - Investments as % of GDP 2020 - Market statistics - Location of the portfolio company
0.8% 0.734%
% of of % GDP 0.7%
0.6% 0.579% 0.498%
0.5% 0.481% 0.420%
0.4%
0.356%
0.354%
0.349%
0.296%
0.294%
0.276% 0.274%
0.3% 0.268% 0.231%
0.2%
0.152%
0.114% 0.082%
0.1% 0.075%
0.052%
0.039%
0.038%
0.008%
0.005%
0.000% 0.000% 0.000% 0.0%
2020 2016-2020 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 59 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Growth - Investments as % of GDP 2020 - Market statistics - Location of the portfolio company
0.30% % of of % GDP
0.25% 0.241% 0.214%
0.20%
0.187% 0.154%
0.15%
0.101% 0.101%
0.10%
0.087%
0.086%
0.085%
0.077%
0.051%
0.047%
0.043% 0.040%
0.05% 0.040%
0.038%
0.030%
0.028%
0.028%
0.024%
0.023%
0.022%
0.020%
0.013%
0.012% 0.003% 0.00%
2020 2016-2020 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 60 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Investments by sector 2020 - Market statistics - % of Amount & Number of companies
ICT 37.1% 37.6% Consumer goods & services 18.9% 16.5% Biotech & healthcare 15.1% 16.3% Amount Business products & services 14.2% 13.8% Number of companies Financial & insurance activities 7.1% 3.6% Energy & environment 2.2% 3.9% Agriculture 1.5% 1.0% Transportation 1.4% 1.8% Construction 1.3% 1.8% Chemicals & materials 0.8% 1.4% Real estate 0.2% 0.9% Unclassified 0.3% 1.4%
Source: Invest Europe / EDC www.investeurope.eu/research 61 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by sector 2016-2020 - Market statistics - Amount
All Private Equity Venture Capital 120 14
100 12
10 € billion € € billion € 80 8 60 Transportation 6 40 Real estate 4 ICT 20 2 Financial & insurance activities 0 Energy & environment 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Consumer goods & services Buyout Construction Growth 80 Chemicals & materials 25 70 Business products & services 20
60 Biotech & healthcare € billion € € billion € Agriculture 50 15 40 30 10 20 5 10 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 62 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments by sector 2016-2020 - Market statistics – Number of companies
All Private Equity Venture Capital 9,000 6,000 8,000 5,000 7,000 6,000 4,000 5,000 3,000 4,000 Transportation 3,000 Real estate 2,000 2,000
ICT 1,000
Number of companies of Number Number of companies of Number 1,000 Financial & insurance activities 0 Energy & environment 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Consumer goods & services Buyout Construction Growth 1,600 Chemicals & materials 2,500 1,400 Business products & services 2,000 1,200 Biotech & healthcare Agriculture 1,000 1,500 800 600 1,000 400
500 Number of companies of Number 200 companies of Number 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 63 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Investments in SMEs 2020 - Market statistics - % of Number of companies & Amount
97%
85%
78% 80%
48% % Number of companies 37% % Amount invested
25%
13%
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 64 Investing in Europe: Private Equity Activity 2020
ACTIVITY 2020 DIVESTMENTS
www.investeurope.eu/research 65 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at a glance 2020 Analysis > Divestments at cost (by amount of former equity invested) in 2020 are down 34% from the year before, to €23bn. This is the All Private Equity lowest divestment level in a decade. 3,160 European companies were exited during the year, an 18% decrease from 2019. By amount, sale to another private equity firm was the most popular exit route (35%), followed by trade sale (25%), and public €23bn from 3,160 companies offering (12%). By number of companies, repayment of preference shares / loans or mezzanine was the most popular exit route (34%), followed by trade sale (15%), and write-off (12%). By country of portfolio company, France & Benelux were the principal by 676 firms & 1,750 funds markets (35% of total divested at cost) followed by the UK & Ireland (21%). The same ranking holds true when looking at the country of private equity firm: France & Benelux (37%) and the UK & Ireland (35%) were the main markets. Average holding period for companies divested during the year was just under six years for all strategies except buyout, where it was just above. Venture Capital > Venture divestments measured at cost in 2020 returned to 2018 levels, after a record year of the past decade in 2019. €2.3bn at €2.3bn from 1,240 companies cost was divested, an 18% decrease year-on-year. 1,240 companies were divested, an 8% decrease from the year before. The main exit route by amount was by trade sale (36%), followed by write-off (15%), and public offering (12%). The main exit routes by by 342 firms & 808 funds number of companies were repayment of preference shares / loans or mezzanine (34%), write off (17%), and trade sale (17%). 39% of exited companies were in the ICT sector, followed by biotech and healthcare (18%), and business products and services (16%).
> Buyout divestments represented 67% of the total by amount at cost and saw the heaviest year-on-year decrease: 40% to €16bn in Buyout 2020. 619 companies were divested (20% of total), down 29% from 2019. The main exit routes by amount were sale to another private equity firm (42%), trade sale (23%), and public offering (12%). The main exit routes by number of companies were trade €16bn from 619 companies sale (21%), sale to another private equity firm (21%), and repayment of preference shares / loans or mezzanine (20%). 69% of companies exited were in three main sectors: business products & services (31%), consumer goods & services (22%), and ICT (17%). by 278 firms & 484 funds > Growth divestments saw a reduction of 24% year-on-year, to €4bn at cost in 2020. 1,309 growth companies were divested, 41% of all private equity divested companies for the year. The main exit routes by amount were sale to another private equity firm (23%), trade sale (20%), and repayment of preference shares / loans or mezzanine (19%). The main exit routes by number of companies Growth were repayment of preference shares / loans or mezzanine (40%), management / owner buyback (12%), and trade sale (10%). Companies in the consumer goods & services sector (24%) saw the most exits, followed by business products and services (23%), from companies €4bn 1,309 and ICT (22%). by 262 firms & 785 funds
Note: the stages relate to the initial investment stage of the portfolio company www.investeurope.eu/research 66 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost at a glance 2007-2020 - Market statistics – Amount & Number of companies 80 2,000
1,579 1,607 1,510 1,560 1,563 Venture Capital 70 1,629 1,373 1,375 1,500 1,276 1,306 1,276 1,274 1,309 1,391 1,089 1,344 1,357 1,354 1,308 1,352 Growth 1,208 1,209 1,240 60 801 1,086 1,099 1,000 809 1,009 991 985 Buyout 933 904 924 858 827 836 875 725 703 €47.4bn 50 654 619 500 541 €44.9bn €44.5bn €43.1bn 6.8 40 €36.8bn 5.6 €37.2bn 0 Other €35.8bn 6.8 €35.4bn 7.5 Growth 5.3 €28.4bn 8.2 5.7 30 6.8 -500 €25.0bn Buyout 3.7 €23.4bn € billion companies of Number billion € €20.7bn 2.7 36.4 Venture Capital 20 34.9 33.9 4.4 -1,000 €15.4bn€15.1bn 2.9 31.2 27.7 25.0 25.0 26.0 20.9 2.4 2.6 19.3 10 14.5 15.6 -1,500 10.0 8.7
3.1 2.6 2.7 2.5 2.7 0 2.4 2.2 1.9 2.4 2.2 2.0 2.1 2.3 2.3 -2,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Invest Europe / EDC. Note: Other includes Rescue/Turnaround and Replacement capital www.investeurope.eu/research 67 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost by exit route – All Private Equity 2020 - Market Statistics - % of Amount
6% 8% 4% 15% 3% 25% Trade sale 11% Public offering 7% Write-off 3% All Private Equity Repayment of preference shares / loans or mezzanine All Private Equity €23.4bn divested at cost Sale to another private equity firm 3,160 companies divested 10% 12% Sale to financial institution 35% 12% Management / Owner buyback
Other means 7% 8% 34%
Source: Invest Europe / EDC www.investeurope.eu/research 68 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost by exit route - Venture Capital / Buyout / Growth 2020 - Market Statistics - % of Amount
2% 5% 3% 23%
Buyout €15.6bn divested at cost 12% 12% 6% 42% 9% 20% 4% 4% 4% 36% 8% 5% Venture Capital Growth 8% €2.3bn divested at cost €4.4bn divested at cost 16% Trade sale 23% 9% Public offering Write-off 3% 12% Repayment of preference shares / loans or mezzanine 15% Sale to another private equity firm 19% Sale to financial institution Management / Owner buyback
Source: Invest Europe / EDC Other means www.investeurope.eu/research 69 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost by exit route - Venture Capital / Buyout / Growth 2020 - Market Statistics - % of Number of companies
10% 21%
15%
Buyout 4% 619 companies divested 4% 5% 7% 8% 10% 17% 7% 12% 3% 10% 21% 20% 7% 8% 3% Venture Capital Growth 1,240 companies divested 1,309 companies divested 9% 8%
Trade sale 17% Public offering Write-off 34% Repayment of preference shares / loans or mezzanine Sale to another private equity firm 40% Sale to financial institution Management / Owner buyback
Source: Invest Europe / EDC Other means www.investeurope.eu/research 70 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Divestments at cost by exit route 2016-2020 - Market statistics - Amount at cost
18
16 € billion € Trade sale 14 Public offering
12 Write-off
10 Repayment of preference shares / loans or mezzanine 8 Sale to another private equity firm
6 Sale to financial institution
Management / Owner buyback 4
Other means 2
- 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 71 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Divestments at cost by exit route 2016-2020 - Market statistics – Number of companies
1,600
1,400 Trade sale
Public offering 1,200
Write-off Number of companies of Number 1,000 Repayment of preference shares / loans or mezzanine 800 Sale to another private equity firm
600 Sale to financial institution
Management / Owner buyback 400 Other means 200
- 2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 72 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Divestments at cost by sector 2020 - Market statistics - Amount & Number of companies (excluding write-offs)
6 800 5.6 Amount at cost (€ billion) Number of companies exited 5.1 700 5 600 4 3.8 500 3.1 3 400 756
617 300 2 561 1.5 200 338 1 0.6 0.6 0.6 0.5 100 0.2 84 87 109 0.1 0.0 49 35 43 65 0 52 0
Source: Invest Europe / EDC www.investeurope.eu/research 73 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost by sector - Venture Capital / Buyout / Growth 2020 - Market statistics - Amount (%, excluding write-offs)
43% ICT 22% 29% 15% Consumer goods and services 28% 15% 25% Biotech and healthcare 15% 10% 9% Business products and services 18% 17% 2% Financial and insurance activities 7% 11% 3% Energy and environment 2% 5% 0% Transportation 2% 7% 0% Construction 3% 3% Venture Capital 0% Chemicals and materials 3% Buyout 0% 0% Growth Agriculture 1% 1% 1% Real estate 0% 1% 1% Other 0% 0%
Source: Invest Europe / EDC www.investeurope.eu/research 74 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Divestments at cost by sector - Venture Capital / Buyout / Growth 2020 - Market statistics – Number of companies (%, excluding write-offs)
39% ICT 17% 22% 16% Business products and services 31% 23% 13% Consumer goods and services 22% 24% 18% Biotech and healthcare 10% 9% 5% Energy and environment 2% 4% 1% Construction 5% 4% 2% Financial and insurance activities 4% 3% 1% Transportation 2% 2% Venture Capital 1% Chemicals and materials 2% Buyout 2% 1% Growth Real estate 1% 2% 1% Agriculture 1% 2% 1% Other 4% 3%
Source: Invest Europe / EDC www.investeurope.eu/research 75 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity - Divestments at cost by region 2020 - Industry vs. Market statistics - Amount
€9.2bn €8.7bn €8.1bn
€4.9bn
€3.5bn €3.2bn
€2.4bn €2.3bn €2.0bn €2.1bn €1.4bn €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 76 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
All Private Equity – Average Holding Period 2016-2020 – Average holding period in years
8
Years 7.0 7
6.2 6.3 6.3 6.0 6.1 5.8 5.9 5.9 6 5.8 5.7 5.7 5.7 5.7 5.7 5.6 5.6 5.5 5.5 5.4 5.3 5.4 5.4 5.1 5 4.7
4
3
2
1
0 Venture Capital Growth Buyout Rescue/Turnaround Replacement capital
2016 2017 2018 2019 2020
Source: Invest Europe / EDC www.investeurope.eu/research 77 Investing in Europe: Private Equity Activity 2020
ACTIVITY 2020 METHODOLOGY & GLOSSARY
www.investeurope.eu/research 78 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
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 79 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Methodology & Glossary Investments
INVESTMENTS STAGES INVESTMENT 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 a company. The equity value Replacement Capital: Minority stake purchase from This stage contains also the investments reported as includes equity, quasi-equity, mezzanine, unsecured another private equity investment organisation or “Other early stage” which represents funding from another shareholder or shareholders. debt and secured debt provided by the private equity 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 80 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Methodology & Glossary Divestments
EXIT ROUTE DIVESTMENT 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 81 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
Methodology and glossary
MARKET STATISTICS A Domestic investments / divestments in European countries C B Cross-border investments / divestments within Non-European private equity Europe firms investing in / divesting portfolio companies in C Non-European private equity firms investing in Europe / divesting portfolio companies in Europe A B Domestic Cross-border investments / investments / INDUSTRY STATISTICS divestments divestments A Domestic investments / divestments in in European within Europe European countries countries B Cross-border investments / divestments within Europe D European private equity firms investing in / divesting portfolio companies outside Europe D European private equity firms investing in / divesting portfolio companies outside Europe
www.investeurope.eu/research 82 Investing in Europe: Private Equity Activity 2020
ACTIVITY 2020 ACKNOWLEDGEMENTS
www.investeurope.eu/research 83 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
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):
Active Owners Denmark - Denmark FVCA – Finland AIFI – Italy LPEA - Luxembourg ASCRI - Spain NVCA - Norway BVA - Belgium NVP - The Netherlands BVCA - Bulgaria PSIK - Poland BVCA - UK SECA - Switzerland BVK - Germany SEEPEA - South Eastern Europe CVCA - The Czech Republic SVCA - Sweden
France Invest - France
www.investeurope.eu/research 84 Investing in Europe: Introduction Fundraising Investments Divestments Methodology & Glossary Acknowledgements Private Equity Activity 2020
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 1,600 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 Sofian Giuroiu Andreea Anca Adriana Craciun [email protected] Alexandra Ehupov www.investeurope.eu Ana-Maria Cristea Bianca Ostropet Cristina Porumboiu Dragos Tanasescu Iuliana Petre Luiza Dima Paul Buzoianu Silvia Costea [email protected]
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