Private Equity Trend Report 2020
25 February 2020
Mergermarket is pleased to present the Private Equity Trend Report 2020 published by PwC, the 14th annual survey on current developments in German and international private equity investment.
In 2019 PE has pulled off another fantastic year of dealmaking in Europe. With alternative assets having delivered in both bull and bear markets, it is hardly surprising that investors are continuing to put their faith in them and increasing participation in PE funds. If the PE industry is going to continue to deliver exceptional returns to investors, it will need to continue to adapt and evolve, upskill and find new creative ways to invest in response to the market and all its players may bring. As every year, 250 GPs in Europe shared their view of 2019 and the way ahead. The results are all combined in PwC’s Private Equity Trend Report 2020.
Key findings include:
- Strong leap in European PE activity. Ample dry powder generates focus on capital deployment. Total PE activity (including exits) in Europe increased by 16% year on year in terms of volume.
- Exits lead the fall in deal value. At 945, the number of European target exits remained stable to 2018, still under the values of the 2015–2018 period. The €121bn in exit value is the lowest figure since 2013.
- Competition running high. 66% of respondents say competition among PE firms increased in 2019. Furthermore, 68% expect competition for investments among PE firms to increase in 2020, including 20% who say they expect it to increase significantly.
- What economic crisis? While 51% of respondents expect the world economy to experience low growth, and none expect high growth, 74% do not believe the next financial crisis will occur in the short to medium term.
- Data analytics prevails. 84% of respondents say they will invest in digitalisation over the next year, and 81% of this group are planning to invest in data analytics. Most (95%) of these have used analytics in their own work to identify potential deal opportunities.
- Germany prime market. The top country in the EU in which to make PE investments is Germany. Almost half (46%) of respondents singled out the country as the top choice for making buyouts.