Forward
Welcome to my monthly activity roundup of the European private equity and venture capital industry.
June 2024 was another active and productive month for Invest Europe. Johannes Huth has taken on the role of Invest Europe Chair, succeeding Frans Tieleman. Ahead of the European elections, we launched our ‘Forward’ publication, our policy agenda urging policymakers to drive investment in innovation, climate action, and infrastructure, aiming to create a sustainable and thriving Europe. We also tackled the complexities of European private equity and venture capital tax regimes in a well-received article, proposing a standardized EU-pooling vehicle to simplify investment processes. A new Human Rights Library was published exclusively for our members - a valuable resource to help integrate human rights principles into investment activities.
Our expanded annual report on the CEE region's private equity and venture capital activity highlighted its continued potential for long-term growth. And our 2023 Benchmark Report revealed that the industry continues to deliver superior long-term returns compared to public equities, and for the first time, included infrastructure funds - underscoring their vital role in investor portfolios. It’s worth noting that for the first time since our media monitoring began in 2022, positive articles about our industry outnumbered neutral ones - partly driven by key Invest Europe reports.
Looking ahead, we have a number of reports in the pipeline, including the Transaction Value update and Dry Powder reports in July, and our unmissable Venture Capital Forum event taking place in Amsterdam in September!
More below.
Invest Europe’s policy agenda for 2024-2029 and beyond, published amid the European elections in June, calls on incoming policymakers to take bold and swift action to unlock a wave of investment that empowers innovation, tackles climate change, strengthens infrastructure, and ensures European sovereignty, thereby creating a Europe that is thriving, sustainable and a global leader. It sets out the case for more long-term capital channelled towards private equity, venture capital and infrastructure funds and highlights 12 priorities across four themes to help the EU accelerate progress towards its ambitious goals.
The new EU political mandate presents a compelling opportunity for the European Union to elevate its ambition, and for private capital to deploy capital at scale and cement its role as a cornerstone of Europe’s economy and society.
Johannes Huth , Senior Advisory Partner, KKR, has assumed the role of Invest Europe Chair for 2024-2025, succeeding Frans Tieleman , Advisor, Eurazeo, and Partner of Leto Partners. Johannes will also serve as Vice-chair for the association’s Global Private Equity Platform Council until June 2025. In addition, Elias Korosis (Corossis) , Global Investment Partner, Federated Hermes Private Equity, Vice-chair of the LP Platform Council, was named Chair-elect.
I’d like to take the opportunity, on behalf of the entire association, to extend my heartfelt thanks and appreciation to Frans for his work to promote the industry’s involvement in combating climate change and in supporting Europe’s strategic, technological and industrial sovereignty, while defending the values of diversity and inclusion.
Our new resource library on Human Rights helps Invest Europe members gain an understanding of human rights, what your role is as an investor, and how to integrate the right principles and approach into investment activities.
This practical tool has been developed by Invest Europe’s Human Rights Working Group, under our ESG Committee – our thanks to them for their efforts.
CEE Report - 20 June
Our most comprehensive study of private equity and venture capital fundraising, investment and divestment activity across the CEE region was produced in partnership with Gide Loyrette Nouel and compiled with the help of?our Central and Eastern?Europe?Task Force (chaired by William R. Watson ) and PSIK, the Polish Private Equity & Venture Capital Association , the Polish national association.
There is no denying the challenges facing the investment ecosystem in Central and Eastern Europe. Despite the headwinds, CEE countries – collectively and individually – continue to move forward, with private equity and venture capital managers playing an active and essential role.
This year’s statistics include for the first time macro data that highlights long-term progress on key economic metrics, both in individual countries and across the region. When combined with our private equity activity data going back to 2009 and job creation figures from 2017-2022, these figures confirm that the CEE story is not about a single year’s results: they demonstrate the continuing role and impact that private equity and venture capital can – and will – have in this environment of long-term growth.
Opinion: Driving the Positive Tax Agenda - Rethinking the taxation of European PE/VC funds – 25 June
Investing in European private equity (PE) and venture capital (VC) funds involves navigating diverse tax regimes across countries, each with its complexities. These diverse tax regimes are hard to manage when investing in a diversified portfolio of European PE and VC funds. The article describes how a standardised EU-pooling vehicle can contribute to overcoming this complexity and why is this important for Invest Europe's agenda for transformation in the 2024-29 EU political mandate and beyond.
With thanks to Thijs van Dongen for this well-documented article. Thijs heads the Tax Operations team at the European Investment Fund (EIF) and is the Limited Partners Representative in Invest Europe’s Tax Committee.
Our fifth annual study into European private equity’s net returns shows that over the timeframes that matter to long-term investors, our industry continues to deliver performance far in excess of public equities benchmarks.
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I am pleased that this year’s edition includes European private infrastructure funds returns for the first time, recognising infrastructure’s essential role in long-term investor allocations, delivering outperformance and diversification, as well as yield and stability. The inclusion of this dynamic and evolving asset class also underlines the importance of private infrastructure managers in a growing and representative Invest Europe, not to mention their place in driving a greener, more energy efficient and more digitally connected Europe.
Furthermore, our ongoing ‘LP Voice’ series was this month penned by Elias Korosis, Vice-chair, LP Council and Invest Europe Chair-elect, on the topic of industry performance in Europe.
Reputation management: shifting perceptions
In May 2024, for the first time since our members’ only Daily Media Monitor started tracking sentiment in 2022, positive articles about our industry outnumbered neutral articles, partly driven by key Invest Europe reports: Private Equity Activity data , Private Equity at Work .
Events
Relaunching the SuperReturn media dinner in Berlin – 4 June
We were delighted to relaunch our SuperReturn media dinner, last held in 2019. Some 30 members of our Communications Advisory Group, Council members and senior journalists from leading European and national financial and trade media gathered for the event. With an almost 1:1 ratio between media and our members, it was a welcome opportunity to update media on industry trends and developments.
EIC Forum: Building a Trusted Investor Network in Brussels – 12 June
Following my attendance at the EIC Forum Plenary on March 18 in Brussels, I joined other key stakeholders on 12 June in a meeting with EU Commissioner, Iliana Ivanova . This meeting was part of an effort to develop a trusted network of investors. We are delighted to represent the industry at this high-level discussion, explore co-investment opportunities with the EIC Fund, and contribute to establishing a network of investors aligned with supporting European technology businesses.
I was thrilled to be invited as the guest of honour at Private Equity Magazine's Grands Prix 2024 awards ceremony in Paris. During my speech I highlighted the current European context and the industry's priorities for the next 5 years. The 19th edition of the Grands Prix recognises the most active investment teams and advisors on the French market in 2023.
Les Echos Capital Finance in Paris – 25 June
On Tuesday 25 June, Invest Europe Research Director Julien Krantz delivered the keynote address at the LBO Conference, organised by Les Echos Capital Finance in Paris. His presentation provided an overview of the European market and examined the investment and fundraising landscape in France.?He highlighted that French GPs invested €102bn from 2019 to 2023, with €72bn invested domestically, showcasing France's pivotal role in the European ecosystem.
Coming up
Transaction Value (update) – 11 July
Invest Europe's transaction value analysis presents you with a new analysis of investments into European companies in the past decade. The report looks at the transaction value of Venture Capital and Private Equity investments, including equity provided by the fund, co-investments, and leverage.
Looking at Capital Under Management and Dry Powder across private equity segments, from Buyouts to Generalist funds, and Growth Capital to Venture Capital.
Venture Capital Forum in Amsterdam – 25, 26 September
Join us for the first time in Amsterdam for the annual leading European conference for Limited Partners (LPs) and GPs engaged in VC and growth capital.
Yours,
Eric.
#PrivateEquity #VentureCapital #Infrastructure #InvestEurope #BuildingBetterBusinesses
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