In a previous blogpost, we concluded that 2022 and especially Q1’23 were bad in terms of capital raising and M&A activity. But there is light on the horizon. One sign that there should be better times ahead, is visible in fundraising by funds themselves. Typically, mostly pensions funds, asset managers, sovereign wealth funds, insurance companies, government agencies and private individuals invest in these funds.
Looking at the numbers, from research by Invest Europe, we see that Private Equity in Europe has reached an all-time high in 2022, raising a whopping €170bn. This figure represents a 30% increase from the previous year and was raised by 801 funds. Although the number of funds has decreased compared to 2021, the amount raised by those funds is higher.
Taking a closer look at the major categories, we can see that Buyout fundraising was the highest performer, raising €111bn, while Growth fundraising raised €21bn. The Venture fundraising category raised €23bn by a total of 343 funds, of which 25% were new, first-time, funds. This was a record year! Within the Venture category, 42% of the funds focused on investments for all venture stages, 42% focused on early stages, and 16% focused on later stages. The primary sources of capital for these venture funds were corporate investors, family funds, and private individuals. Notably, France and the Benelux made significant contributions to the overall fundraising amount.
Belgium is experiencing a similar trend where several new funds are emerging and have successfully completed their first funding rounds. Among these new funds are Strada Partners, Miles Ahead and Angelwise. Next to these new entrants, seasoned funds like Fortino, Smartfin, Ergon and Sofindev continue to make waves, either having raised or currently in the process of raising fresh funds.
Despite a drop in investments in 2022, these figures show that private equity is gathering dry powder for 2023 and 2024. As we look ahead to the next few years, it's clear that private equity will continue to be major force in the European market.