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European private equity investment reaches €68.3bn - preliminary figures
19/03/2008. Source: AltAssets. 
 European equity capital invested in 2007 could exceed the €71bn of 2006, according to preliminary figures released by PEREP_Analytics, a new and independent data-gathering body endorsed by the European Private Equity and Venture Capital Association and 14 national associations in Europe. Preliminary figures in 2006 showed lower investment levels than in the current data for 2007. Final figures for 2007 may, therefore, be revised upwards from the current €68.3bn.
Buy-outs accounted for 77.4 per cent of the total amounts invested and 27.9 per cent of the total number of investments. Expansion financing accounted for 12.9 per cent of the amounts invested and represented 35.6 per cent of all investments. Early stage investments showed similar patterns, the report found, making up 4.1 per cent of the amounts invested, but accounting for 34.6 per cent of all investments.
The sector that attracted the most capital was consumer goods and retail (13.5 per cent), followed by business and industrial products (13.4 per cent). However, as in 2006, the sectors with the largest number of investments were computers and electronics (19 per cent) and life sciences (17.3 per cent) of the total number of investments. Energy and environmental businesses recorded the biggest growth in terms of amounts invested.
Divestments at cost in 2007 totalled €23.1bn - this amount is expected to rise in the final figures. Compared to the preliminary figures of 2006, divestments register an increase, though looked at next to the final figures for 2006, the preliminary results of 2007 are down.
Repayment of principal loans accounted for 25.4 per cent of the total number of divestments in 2007, followed by trade sales and sales to other private equity houses (representing 23 per cent and 9.3 per cent of the total respectively).
When looking at divestments by amount at cost, the ranking reverses. Secondary deals are at the top of the list, with 29.6 per cent. This was followed by trade sales at 24.9 per cent and repayment of principal loans, with 19 per cent.
Business and industrial products was the most popular sector for divestments, accounting for 18 per cent of the total amount divested at cost and 15.4 per cent of the total number of divestments. By amount, this was followed by consumer goods and retail (15.9 per cent), whereas by number of divestments, the second largest sector was computer and consumer electronics (12.2 per cent).
Professor Stefano Caselli of Bocconi University Milan, a member of the governing body of PEREP_Analytics, said, 'PEREP has been able to bring a new level of detailed analysis to the industry and its stakeholders. This includes sector coverage, which is now mapped according to the NACE sectoral classification, allowing for better comparisons across a wider set of asset classes and industries. Despite record fundraising in 2006 and difficult market conditions in the second half of 2007, last year's fundraising figures would suggest that the appetite of investors towards the asset class remains undiminished.'
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