Many countries across the world have had their economies severely impacted by the COVID-19 pandemic. The European landscape, however, exhibited resilience in terms of investments and VC fundings. Invest Europe, the association representing Europe’s investors, private equity, venture capital and infrastructure sectors, has released a new report, which reaffirms the same.
Private equity’s investment in H1 2020 is in line with prior year
Even though COVID-19 had an impact on the European economy, private equity funds raised a notable €49B in the first half of 2020. This is in line with 2019’s first half figure, which suggests that the industry might go on to raise a full-year total that’s on a par with average fundraising level achieved over the last three years, the report claims.
Over the same first six months of 2020, private equity funds backed 3,401 companies by pouring in €36B. About 60% of this value is said to have been used as follow-on investment as “the industry supported its businesses through the intense liquidity crisis caused by the introduction of economic lockdown measures across Europe.”
“While the outlook remains uncertain as governments tighten restrictions on people and businesses, private equity is well placed to help Europe weather the tough conditions and emerge stronger. Indeed, Europe’s private equity managers have shown a clear focus on steering their businesses through the crisis and have the support of pension funds and other long-term investors that are clearly committed to the asset class,” says Eric de Montgolfier, CEO, Invest Europe.
The figures in the report also highlight the industry’s piqued investments in ICT, biotech & healthcare, which accounted for over half of capital invested. Furthermore, VC investment set a new half-year record with €5.6B invested into innovative startups and scaleups. Overall private equity investment is reported to be 17% lower in value as investments were impacted by tougher trading conditions and worsening outlooks.
Another report to be out soon
Invest Europe is also set to release another report, following the current report on the first half of 2020. It will be launched in collaboration with Arthur D. Little, the international management consulting firm. The upcoming report is slated to be a pan-European survey that captures inputs from private equity managers and investors on the future of the industry, in the context of the coronavirus pandemic.
The new report will be released during a webinar this month, which will be hosted by Invest Europe and Arthur D. Little. It will highlight the impact of COVID-19 on private equity and venture capital, as well as reveal that around 60% of managers and investors expect that capital allocations to private equity will rise over the next three years. Additionally, ICT, biotech & healthcare and business services are expected to be some of the important sectors for investment in the future.
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