A study by Frontier Economics outlines the positive contribution to EU economies in work commissioned by the European Private Equity and Venture Capital Association (EVCA). The report has a strong focus on innovation financing and is based on secondary research, more of a review and compilation of existing data and studies
Here are some of the findings:
- As shown in the figure above, 30% of funds raised by the private equity industry between 2007 and 2012 came from institutional investors (i.e. pension funds, insurance companies, academic institutions, and endowments and foundations).
- Private equity contributes to the creation of up to 5,600 new businesses in Europe annually and attracts significant investible funds into Europe, providing much needed risk capital for businesses.
- Between 2007 and 2012, private equity invested almost EUR 250 billion in the 12 largest private equity markets in Europe, of which an estimated EUR 50bn was raised from outside Europe.
- PE was linked to a 6.9% increase in earnings before interest tax, depreciation and amortization per employee in large PE-backed companies.
- Private equity-backed businesses between 2006 and 2011 are likely to be worth up to EUR 350 billion. (Image source: Frontier)