Invest Europe, an association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has released Mid-Market Private Equity: Europe’s Engine for Growth, the 2024 edition of its report that reveals the far-reaching economic and social benefits of mid-market private equity investment across Europe.
Mid-market private equity funds delivered returns of 16.90% net IRR to investors since inception to the end of the 2023, accelerating from the previous year. The figure was well in excess of the 7.15% generated by the equivalent European public equities benchmark over the same period and far ahead of the 13.29% return created by North American peers.
Companies backed by mid-market private equity added over 160,000 net new jobs in 2021-2022, equating to 7.9% employment growth, almost four times the European job creation total of 2.0%. Those jobs were added in companies at the heart of Europe’s sustainable and Digital Transformation, with 20% more workers hired in the energy and environment sector, 15% more in ICT and 10% in finance and insurance, a sector fuelled by Europe’s strength in dynamic FinTechs.
Europe’s mid-market private equity segment could not avoid the turbulence affecting markets in 2023, with investment contracting to €35 billion and the number of companies backed dropping to 1,067. However, investment by value and number of companies remained ahead of the pre-pandemic levels and roughly two times the total witnessed a decade earlier.