Europe’s private-equity market remained “robust” last year but the value of the deals done slipped from 2018’s record levels, according to Pitchbook.
Almost 3,900 deals were done, down from about 4,000 in 2018, Pitchbook’s Annual European Breakdown report showed. They were worth$501.2 billion, a 2.4% decrease from a year earlier but were still the second highest in the dataset.
Access to cheap financing and greater competition for deals from nontraditional investors has caused PE deals’ median annual size to more than quadruple in the past decade to about $34 million, Pitchbook data show.
That’s created “an industry that has graduated from the fringes of the capital markets closer to the mainstream,” the report said. “An ever-growing number of institutional investors who previously shied away from PE allocations now see the asset class as fundamental to their portfolios in order to achieve diversified global outperformance.”
Brexit hasn’t negatively affected deal activity, and in fact, Pitchbook expects the number of deals to increase in the near term as investors pull the trigger on transactions that had been delayed amid the uncertainty over the U.K.’s exit from the European Union.
Top sectors for PE deals were information technology and healthcare, which were the only two to post year-on-year gains in deal value. IT hit an annual record.
A noteworthy deal occurred in the third quarter, when a consortium of investors led by EQT Partners bought Nestle Skin Health for about $11.7 billion. Pitchbook said it was the second-largest European buyout since the global financial crisis.
- Private equity firms raised more than $300 billion in 2019 in about 5,100 deals together worth more than two-thirds of a trillion dollars, according to Pitchbook’s 2019 Annual U.S. PE Breakdown report. The figure was down slightly from 2018.
- Private-equity deals in India gained 2.8% in 2019 to $37 billion, according to Venture Intelligence, an Indian research and analysis firm, up from the previous high of $36 billion in 2018. The number of transactions slowed to 861 from 937 a year earlier.