Economic and Social Impact of French Private Equity at the End of 2023 (France Invest)

Summary

• French portfolio companies employed 2.4 million people and generated a combined revenue of €518 billion.p.1
• Supported French companies generated 8.3 % revenue growth in 2023, surpassing general French SMEs (+ 5.0 %) and mid-caps (+ 5.4 %).p.1
• Private equity-backed companies added 81,000 jobs in 2023 and 530,000 jobs since 2018.p.1
• Business growth drives 68 % of value creation, comprising organic revenue growth (52 %), external acquisitions (34 %), and margin improvement (14 %).p.1
• Valuation multiple expansion between entry and exit contributes 36 % to total value creation.p.1

Key insights

1. French private equity-backed firms outperform the national averages for SMEs and mid-caps in terms of revenue growth.p.1
2. Business expansion is the single primary driver of value creation for private equity-backed firms, accounting for 68 % of overall gains.p.1
3. Organic revenue growth remains the largest component of business expansion at 52 %, while add-on acquisitions contribute 34 %.p.1
4. Valuation multiple expansion provides 36 % of value creation, enabled by stronger market positioning and scale.p.1
5. Lack of deleveraging slightly hampered value creation because companies generally incurred extra debt to finance build-up acquisitions.p.1
6. Job growth has been notably strong in industrial goods and services sectors.p.1
7. France Invest gathers active French private equity teams, representing over 400 active members and 180 associate members.p.2