The Insight: Keeping an Eye on the Horizon (Invest Europe)

Summary

• Divestment activity softened to €14 billion in H1 2022, down from €22 billion in the second half of 2021.p.10
• A broad consensus expects lower valuation multiples, with 81.3% of GPs and 83.3% of LPs anticipating declines in the next 12 months.p.12
• Digitalization remains the leading operational improvement lever for portfolio companies, prioritized by 68.6% of GPs.p.18
• Attention to ESG factors continues to increase, expected by 90.5% of GPs and 83% of LPs in their daily operations.p.16

Key insights

1. A total of 72.4% of GPs expect private equity fundraising to be weaker over the coming 12 months compared to the prior year.p.6
2. Some 80% of GP respondents confirmed an interest in marketing future private equity funds to retail investors and high-net-worth individuals.p.7
3. Over half of GPs (55%) expect an increase in public-to-private transactions as market conditions change.p.9
4. Renewable energy leads sector investment outlooks, with 63% of GPs expecting higher activity in the next 12 months.p.9
5. An overwhelming 87% of GPs expect IPOs to be less common as an exit route over the next 12 months.p.11
6. High inflation was cited as the single most negative factor impacting business operations by both GPs and LPs.p.14
7. About 72.0% of GPs see distinct advantages in registering new funds as green funds.p.17