Interview
The Active Private Equity Landscape in Europe
- European sponsored deal volumes have risen 25% year on year, with broad-based activity across P2Ps, secondaries, and IPOs projected through the remainder of the year against difficult comparative figures from the prior year.
- Structural growth in technology, telecom, and healthcare sectors, which currently represent approximately 50% of deal volume, is expected to persist as funds seek to correct underweight positions.
- The emergence of large European tech companies has accelerated over the last 12 months following a 24 to 36-month start, with VC funding levels in Europe reportedly exceeding U.S. growth levels in specific instances.
- Primary deal acceleration is evident with 21 P2Ps recorded since 2019 and 11 in the last 12 months; sponsor M&A and carve-outs are forecast to continue due to public board receptiveness and private equity confidence.
- Secondary market activity will evolve into a segmented environment where P2Ps, carve-outs, and secondaries coexist, necessitating a strong value-driving rationale for new sponsors.
- Large global buyout funds (10 to 15 billion USD per fund), multi-line alternative managers, and regional mid-market funds in the Dachregion, Nordic, UK, or France are significantly expanding activities, aligning with a trend of increased LP direct deals.
- Despite high valuations, clients remain aggressively active in pursuing deals, driven by supportive capital markets and the imperative for private equity to generate yield for pension funds and other LPs.
- There is anticipated growth in impact funds and net carbon zero oriented funds, alongside ongoing industry initiatives regarding diversity, inclusion, and governance.
- The industry expects to collaborate with clients, peers, and competitors on "daily blocking and tackling" and bold actions to drive large-scale diversity and inclusion change.