Private Equity Investments on the Rise across Europe
Last week we reported on the latest statistical release by HM Treasury regarding the amount of money being invested through the Enterprise Investment Scheme (EIS). The numbers were very positive, showing that EIS investment volumes had risen year-on-year by £90 million.
One week on and there has been further research revealing the buoyancy of private investment. This time the figures have come from Invest Europe, with the industry association stating that private equity investment across Europe rose to €47.4 billion in 2015, a 14% rise on the year before. Moreover, the UK and Ireland accounted for 27% of all private equity investment in 2015, putting the two countries (combined) second only to France and the Benelux nations, which together took 29% of investments.
While this is to be celebrated, Invest Europe’s findings become more interesting when you consider that the data also showed that the number of companies receiving growth equity fell by 13% last year. With the total value of private equity investment rising but the number of firms receiving funding of this sort on the decline, the data seemingly indicates that private equity investors are increasingly focusing their efforts on a more select group of high-growth businesses. Rather than offering small amounts of finance to a broader number of companies, larger sums are being directed into larger, better established or more promising SMEs – this is a trend that has already been seen in the US.
Over recent months IW Capital has stressed the importance of directing private investment towards a more refined group of established businesses looking for scale-up funding, rather than focusing too heavily on start-up businesses. That is why we have developed Race to Scale – a £100 million funding drive dedicated solely to Britain’s scaling businesses. Launched in partnership with Crowdfinders, the UKBAA, Seedrs, SyndicateRoom, Smith & Williamson, Envestors, Crowdcube, and international crowdfunding partner Invesdor – the nationwide call for SME entries is now live.