Private equity (PE) is money (capital) invested into companies that are not publicly traded. Private equity consists of investors and funds that make investments directly into companies with the mission of seeing a high rate of return on their investment. Private equity deals have a timeline in which investors will look to exit from their investment and ultimately make profit.
The two main types of private equity funds include venture capital (VC) and buyouts. Venture capital consists of funding pools that tend to be invested in small business or start-ups that have a high potential for considerable growth. As a strategy, VC funding may carry higher risks as new emerging companies tend not to have a proven track record of success, but the potential return on investment (ROI) can be far higher. Private equity buyouts look at mature firms that may be undervalued or underperforming and consist of more than a 50 percent acquisition of the company.
The European PE landscape has been growing in recent years. 2019 has seen the highest number of private equity deals ever made in Europe. Within Europe, the United Kingdom (UK) is the largest market, with average deal sizes far higher than in any other European country. On a global scale, North America is by far the largest PE market.
Although private equity deals may not live up to the size of the largest acquisitions, they can still reach huge values. In 2019, the largest PE deal came to more than 10 billion euros. The ultimate goal for any PE or VC investor is to find to find a unicorn. Unicorns are companies with a valuation of one billion U.S. dollars and above at the time (or shortly after) of their initial public offering (IPO) or acquisition.
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In the following 5 chapters, you will quickly find the 31 most important statistics relating to "Private equity in Europe".