European Middle-Market Private Equity Update

According to newly released data from Pitchbook, middle market private equity investment showed further signs of recovery in Europe over Q3. Year-on-year data revealed that European PE investments increased by 27.5%, supported by lowered interest rates and dry powder bolstered dealmaking.

Recent Pitchbook insights from Q3 European Private Equity Report indicated that corporate divestitures have shown a significant recovery, particularly for those deals above €1 billion, in addition to fundraising remaining strong over the quarter.

Europe is now experiencing certain economic conditions as inflation rates begin to stabilise. Facing such, central banks over Europe have lowered interest rates, this resulting in an improvement in the increase of mega-deals.

The most interesting development has been an improvement in market sentiment that has driven the huge rise in mega-deals. Recent figures indicate that €109 billion worth of European PE deals came from mega-deals, marking an impressive 40% increase compared to 2023.

European exits remained consistent year-on-year, with a total exit value of €167 billion by the end of Q3. For more exits to occur, successful large IPOs will be essential.

Regarding PE, 2024 has shown promise, especially for carve-out PE deals after €64.5 billion has been transacted this year alone, a notable increase compared to €61.4 billion from 2023.
The middle market in the European Union, having raised between €100 million and €5 billion, is set for an upturn despite an adverse fundraising atmosphere indicated by the middle-market fund count.

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