Private Equity - Industry - Europe Market, Share and Trends 2023-2028

Summary of Private Equity

The private equity (PE) industry in Europe has expanded robustly over the past decade, supported by strong macroeconomic backdrop, increasing investor allocations, and a deepening pool of attractive investment opportunities across the region. Total assets under management (AUM) for European-focused PE firms approached €1 trillion in 2022 (~ $ 1.11 trillion) which is more than double the level from 2012.

Based on our estimates, we can say that the regional European Private Equity industry is forecasted to be a $ 1454.06 billion industry in 2029 from $ 1075 billion in 2023 with a CAGR of 5.14 %.

Key factors fueling the rapid growth include swelling dry powder reserves enabling firms to pursue deals through market cycles, elevated fundraising from global institutional investors, and the ongoing shift towards alternative assets like PE by pension funds and sovereign wealth funds.

Deal value and volume have repeatedly breached new highs over the past several years. The UK and France hold the largest PE markets, together representing over 50% of capital deployed, while Germany, the Nordics, Southern Europe, and Central Eastern Europe have all seen rising investor interest.

Even through periods of political uncertainty like Brexit, PE firms have leveraged their operational expertise and flexible capital to drive transformation in companies across the market cap spectrum. Looking ahead— while the prospect of an economic slowdown could temporarily slow activity, the secular expansion of European PE still has a long runway.

Recent Trends and Insights

European PE firms raised over €150 billion (~$ 192 billion) in 2022 that is shattering previous records. Dry powder sits at all-time highs of €300+ billion (~$ 381 billion), providing ample firepower even if markets soften.

Similar to the US— the growing scale of fundraising has given rise to more mega-sized PE funds over €5 billion and even €10+ billion— focused exclusively on Europe. While large-cap deals draw attention, European PE penetration in the middle market and lower mid-market has grown substantially. First-time institutional investments under €25 million (~$ 32 million) also hit new highs.

Germany has consolidated as Europe’s second largest PE market after the UK, while the Nordics punched above their weight given long-term oriented LPs and technology innovation. Special purpose acquisition companies (SPACs) gained momentum in Europe in 2021-early 2022 as PE firms utilized them to take portfolio companies public faster than the traditional IPO approach.

European PE firms are also providing more minority-stake growth capital to founder-led companies, positioning themselves to buy larger stakes over time as founders look to retire. Top-tier PE firms in Europe have developed in-house operations teams spanning digital, pricing analytics and supply chain to drive post-acquisition transformation and value creation.

Product Insights

As in North America—traditional control buyouts still represent the majority of European PE investment. Firms use buyouts to implement operational changes and accelerate growth.

Minority-stake growth capital investments into privately-held, high-growth businesses have seen major growth. Tech-enabled companies are attractive targets before eventual buyout phases.

European private debt deployed by PE firms has grown at a 20%+ CAGR since 2012 – providing an adjacent market to pursue differentiated value creation strategies.

Europe pioneered infrastructure investing by PE firms— with assets like renewables, transportation, digital infrastructure now representing a key fixture in portfolios and benefiting from secular tailwinds.

Several leading PE firms have successfully raised London or Euronext-listed permanent capital vehicles (PCVs) in Europe, following the US blueprint for recurring management fees and dividend yields.

As in the US, European LPs have markedly increased co-investment activity to boost net returns and strengthen partnerships with GPs. Co-invests allow PE firms to underwrite larger deals.

Retail investor access to PE strategies has gradually increased in Europe, via listed PCVs, feeder funds, and vehicles providing periodic liquidity. Democratization broadens fundraising reach.

Key Companies

Some major players within this vast domain of industry are

• CVC Capital Partners
• The Blackstone Group Inc.
• The Carlyle Group Inc.
• EQT Partners AB
• Advent International
• Apax Partners
• Bridgepoint
• Permira
• BC Partners
• PAI Partners

Regional Analysis

United Kingdom – is taken into account as Europe’s largest PE market given London’s global financial hub status. The most active region for large-cap buyouts and take-privates. Deep bench of operational talent and advisors to support deals. High activity in tech, healthcare, financial services, consumer, industrials.

Germany – is Europe’s second largest PE market with mid-market strength. Strong manufacturing and industrial heritage provides deal pipeline. Munich and Frankfurt have developed as key PE hubs. Engineering expertise supports German PE value-add capabilities

France has an established PE market with mid-cap and small-cap activity. Technology, consumer, healthcare and business services are active spaces. Parisian PE firms expanding across borders into Belgium and Switzerland

Nordic states within the region have a disproportionate PE success given long-term LPs and regional innovation. Sweden and Denmark lead way in tech and life sciences investing. Sovereign wealth capital provides dry powder despite smaller economies. ESG investing embedded given progressive policies

Italy and Iberia have seen rising PE penetration over the past decade. Tourism, infrastructure, renewables, and consumer products attract capital. Distressed opportunities could arise depending on economic backdrop.

Market Segmentation

By Type:

• Buyout funds
• Venture/growth capital
• Distressed/turnaround
• Mezzanine
• Infrastructure

By End User:

• Institutional investors (pension funds, sovereign wealth funds, endowments)
• High-net-worth individuals
• Corporations (corporate venture arms)

By Enterprise Size:

• Large Industries
• Small & Medium Industries

By Country:

• Germany
• United Kingdom
• France
• Italy
• Russia
• Netherlands
• Switzerland

Our Methodology

We have offered a well-founded review of the European regional Private Equity Industry market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.