The Europeanisation of Private Equity: Transcending Borders to Build an Integrated Platform (Andera Partners)

Summary

• In 2021, nearly 40% of CAC 40 dividend payouts went to US pension funds, highlighting Europe's financial dependence amidst German and French household savings rates of 20% and 17%.p.2
• London remains the dominant European financial hub, currently accounting for 80% of private equity and private debt asset management.p.5
• Over the last 25 years, Andera Partners completed 363 company investments, including 94 abroad and 70 in Europe outside France.p.10
• In 2024, private equity investments in the German-speaking region reached €7.1 billion in buyouts and €1.8 billion in venture capital.p.20
• Private equity funds represented 44% of transactions in Italy in 2024, completing around 240 acquisitions of Italian target companies.p.22
• In Spain, private equity recorded 264 deals for a total volume of 22 billion dollars during 2024.p.24

Key insights

1. Increasing trade tensions and US tax threats are driving European institutional investors to seek domestic private equity platforms.p.2
2. High interest rates call into question traditional LBO models that rely heavily on excessive debt leverage.p.3
3. Institutional LPs favor simplified continental platforms to streamline governance and capture cross-border macroeconomic diversification.p.4
4. The fragmentation of European stock and bond markets hampers exit opportunities and limits the creation of continental champions.p.12
5. Life Sciences venture capital operates transnationally by necessity, heavily relying on cross-border M&A and US Nasdaq IPOs for exits.p.14
6. Private debt lenders in Spain gained permanent market share by stepping in during bank retrenchments following macroeconomic shocks.p.17
7. Private equity penetration in Germany lags behind France due to strong local banking relationships and family-owned Mittelstand structures.p.19
8. Italian private equity acts as a critical consolidation mechanism for fragmented family businesses looking to scale internationally.p.21
9. Spanish private equity management companies face cross-border expansion constraints because most manage funds below the €1 billion threshold.p.23
10. Belgium serves as an early-stage laboratory where academic spin-offs are de-risked locally before handing off to pan-European growth funds.p.25