Private capital investment in Europe reaches a record-breaking €1.25 trillion in 2024, marking a significant 2.6-fold increase over the past ten years.
In a significant milestone, the European private equity and venture capital industry has surpassed €1.25 trillion in assets under management, according to Invest Europe's "Positioned for the Challenge: Capital Under Management & Dry Powder 2024" report. This marks over a decade of continuous growth, with the industry's assets 2.6 times higher than a decade ago in 2015.
Key Highlights
The growth is evident in the distribution of portfolio assets. For the first time, venture capital funds held assets worth over €111 billion, while buyout funds reached €507 billion, surpassing the €500 billion mark. The total portfolio assets at cost stood at €834 billion.
Moreover, private equity and venture capital dry powder reached a record €414 billion in 2024. This represents 81% of the €511 billion invested over the previous four years, signifying a strong alignment with ongoing investment opportunities.
Growth and Challenges
The industry's growth is attributed to its role in driving innovation and economic stability. Private equity and venture capital support future-focused businesses and industries key to growth, innovation, and economic sovereignty.
However, challenges such as high valuations, cautious buyers, and macroeconomic pressures persist. Despite these challenges, opportunities abound in transformative technologies and business models, such as AI, climate tech, and healthcare innovation.
Industry Outlook
The European private equity and venture capital industry is well-positioned to continue to develop further in fields such as green and digital transitions, critical infrastructure, and security and sovereignty. With more managers than ever invested in European companies, the industry's growth is set to continue, providing a robust foundation for the continent's economic future.
Eric de Montgolfier, CEO of Invest Europe, emphasised the importance of the industry's role in supporting innovation and sustainability across Europe. The report, available for download from the provided link, also offers a detailed breakdown of assets managed by first-time funds and follow-on funds from established managers.
The time taken for closed funds to see dry powder fall below 30% of capital raised is typically 5-6 years. Uncalled commitments to venture capital reached €59 billion in 2024, indicating sustained investor interest in backing start-ups.
In conclusion, the European private equity and venture capital industry is poised for continued growth, with a focus on supporting innovation and sustainability across the continent. The report serves as a comprehensive guide to understanding the current state and future prospects of this dynamic industry.
The continuous growth in the European private equity and venture capital industry is evident in the distribution of portfolio assets, as venture capital funds held assets worth over €111 billion, and buyout funds reached €507 billion. Additionally, private equity and venture capital investing presents opportunities in transformative technologies and business models, such as AI, climate tech, and healthcare innovation, ensuring the industry's future growth and alignment with ongoing investment opportunities.
