Private Equity - Europe

Europe

The deal value in the Private Equity market is projected to reach €0.29tn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 3.45% resulting in a projected total amount of €0.30tn by 2025.
The average size per deal in the Private Equity market amounts to €67.98m in 2024.
From a global comparison perspective it is shown that the highest deal value is reached in the United States (€550,900.00m in 2024).
In the Private Equity market, the number of deals is expected to amount to 5.17k by 2025.

Marché

Région

Comparaison de régions

Monnaie

Analyst Opinion

The Private Equity market in Europe has seen a mild decline, influenced by factors such as economic uncertainty, regulatory changes, and shifting investor sentiment. These elements have contributed to a more cautious approach towards investments in the region.

Customer preferences: Investors in the European Private Equity market are increasingly prioritizing sustainability and social responsibility in their investment choices. There is a growing trend towards backing businesses that align with environmental, social, and governance (ESG) criteria, reflecting a shift in consumer preferences towards ethical consumption. Additionally, younger demographics are driving demand for innovative, tech-driven solutions, prompting funds to explore sectors like renewable energy, healthcare innovation, and digital transformation, which cater to evolving lifestyle factors and broader societal values.

Trends in the market: In Europe, the Private Equity market is experiencing a notable shift towards investments that prioritize sustainability and social responsibility. Investors are increasingly favoring portfolios that meet rigorous ESG criteria, reflecting a broader societal push for ethical practices. Simultaneously, funds are channeling resources into sectors like renewable energy, sustainable agriculture, and healthcare innovations, driven by younger investors' demand for tech-forward solutions. This alignment with evolving consumer values not only enhances brand reputation but also positions firms for long-term growth, influencing acquisition strategies and stakeholder engagement.

Local special circumstances: In Europe, the Private Equity market is shaped by diverse cultural attitudes towards sustainability and robust regulatory frameworks emphasizing ESG compliance. Countries like Germany and Scandinavia lead in green investments, reflecting societal values that prioritize environmental stewardship. Additionally, the European Union's stringent regulations on carbon emissions and corporate governance create a conducive environment for funds targeting sustainable sectors. This unique landscape fosters innovation in renewable energy and responsible agriculture, differentiating Europe from regions where such factors are less pronounced.

Underlying macroeconomic factors: The Private Equity market in Europe is significantly influenced by macroeconomic factors such as central bank policies, particularly interest rates. Low-interest rates tend to boost private equity activity by making borrowing cheaper, thus facilitating leveraged buyouts and enhancing deal-making capabilities. Conversely, rising rates can dampen investment appetites as financing costs increase, leading to more cautious investment strategies. Additionally, overall economic stability and GDP growth within member states contribute to stronger exit opportunities, making private equity investments more attractive. In this context, the interplay between monetary policy and market dynamics shapes the landscape for private equity in Europe.

Methodology

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.