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Introduction

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Introduction

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Introduction

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Authors

Sid Jain

Head of Insights

Mikołaj Zegar

Insights Associate

Welcome to the inaugural edition of “The State of European Private Equity” report. In this report, we go deep into the PE landscape in Europe. We share insights on entries, exits, multiples, add-ons, holding periods, growth rates, margins and much more.

Welcome to the inaugural edition of “The State of European Private Equity” report. In this report, we go deep into the PE landscape in Europe. We share insights on entries, exits, multiples, add-ons, holding periods, growth rates, margins and much more.

Welcome to the inaugural edition of “The State of European Private Equity” report. In this report, we go deep into the PE landscape in Europe. We share insights on entries, exits, multiples, add-ons, holding periods, growth rates, margins and much more.

Executive Summary

Here is a summary of our key findings:

Entries — Buyout deal activity in 2023 was the lowest it’s been in 6 years (down 32% from peak). Energy & Materials (-18%), Services (-27%) and Industrials (-25%) sectors proved to be more resilient. Q1 2024 data shows promise with the deal count exceeding both 2023 and pre-pandemic levels.

Add-ons  — Add-on activity also took a hit in 2023 (down 31% YoY). Despite the decline, the ratio of add-ons to total PE deal activity remains near the decade-high. Close to half (47%) of PE-backed businesses employ a buy-and-build strategy (making at least one acquisition), with assets in Services and Financial Services leading the charge.

Leading the sector 50 rankings are CVC (Services, Industrials and Financials), EQT (Science & Health), KKR (Energy & Materials), Hg (TMT) and TDR Capital (Consumer). American and British investors switch between #1 and #2 positions across all sectors. 

Leading the region 50 rankings are CVC (Nordics and CEE), Cinven (DACH and Iberia), TDR Capital (UK&I), F2i SGR (Italy), Ardian (France) and KKR (Benelux). UK & Ireland (UK&I) is the most international region, with 55% of EV in the region owned by North American and RoW investors.

Leading the sector 50 rankings are CVC (Services, Industrials and Financials), EQT (Science & Health), KKR (Energy & Materials), Hg (TMT) and TDR Capital (Consumer). American and British investors switch between #1 and #2 positions across all sectors. 

Chapter 01: Entries

Overall Trend

Buyout deal activity in 2023 was the lowest it has been in 6 years. Entries were down 32% from their 2021 peak. The slowdown in entries can primarily be attributed to high interest rates which raised borrowing costs for PE sponsors. However, the most recent data from 2024 is starting to show promise.

Leading the sector 50 rankings are CVC (Services, Industrials and Financials), EQT (Science & Health), KKR (Energy & Materials), Hg (TMT) and TDR Capital (Consumer). American and British investors switch between #1 and #2 positions across all sectors. 

Leading the region 50 rankings are CVC (Nordics and CEE), Cinven (DACH and Iberia), TDR Capital (UK&I), F2i SGR (Italy), Ardian (France) and KKR (Benelux). UK & Ireland (UK&I) is the most international region, with 55% of EV in the region owned by North American and RoW investors.

Leading the sector 50 rankings are CVC (Services, Industrials and Financials), EQT (Science & Health), KKR (Energy & Materials), Hg (TMT) and TDR Capital (Consumer). American and British investors switch between #1 and #2 positions across all sectors. 

Chapter 02: Buy-and-Build

Add-on Activity

In line with the overall market, add-on activity in 2023 also took a hit. Deals were down 31% YoY though they still outpaced pre-pandemic levels. By sector, Services accounted for the largest share of add-on deals (39%) followed by TMT (21%) and Industrials (13%). 

Discover trends on buy-and-build activity

Access the full report for more buy-and-build trends by region and sector.

Discover trends on buy-and-build activity

Access the full report for more buy-and-build trends by region and sector.

Chapter 03: Exits

Overall Trend

Exits slowed down meaningfully in 2023 and were down 33% from their 2021 peak. Higher interest rates, macro uncertainty, lower valuations and dormant IPO markets all contributed to this slowdown.

Discover insights on PE exits

Access the full report for a breakdown of trends in exits by region and sector.

Discover insights on PE exits

Access the full report for a breakdown of trends in exits by region and sector.

Chapter 04: Portfolio Stats

Revenue Growth

Growth for PE-backed assets is the strongest it has been in years. On average, PE-backed assets grew 18.8% YoY in 2023, well above their pre-pandemic averages. Over the last 5 years, the median PE business had a CAGR of 13.8%.

Discover portfolio stats for European PE

Access the full report for a view on overall revenue growth and EBITDA margins.

Discover portfolio stats for European PE

Access the full report for a view on overall revenue growth and EBITDA margins.

Methodology

The data for this report comes from Gain.pro. 

We define PE-backed entries as those in which a PE firm took a minority or majority stake. We define PE-backed exits as those in which a PE firm sold a minority or majority stake. We exclude any VC rounds from our analysis. Both entries and exits also exclude live and aborted deals.

We only focused our analysis on assets HQ’d in Europe.

We estimate the deal count for the latest quarter based on prior deal history and the percent of deals that are announced or added post quarter close.

For metric calculations, we only included assets that had a hand-curated profile on Gain.pro (10+ hours primary research). Where possible, we have used 2023 metrics. But in cases where numbers are still being reported, we have relied on 2022 metrics. 

All EBITDA related metrics such as EBITDA margin and EV/EBITDA multiples exclude Financial Services from calculations.

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© 2023 Gain.pro, all rights reserved