The Role of Private Equity in the Recovery in France and Europe (Andera Partners)

Summary

• In 2020, capital raised by private equity funds in Europe reached €100.5 billion across 672 funds, while investments totaled €88.1 billion in 8,183 companies.p.8
• Over a 10-year period, the annual return on private equity in France was 60% higher than the return on the CAC 40.p.3
• Between 2010 and 2020, total capital raised through IPOs by biotech companies reached $3.9 billion in Europe compared to $51.6 billion in the United States.p.12

Key insights

1. European private equity fundraising remained resilient during 2020 at €100.5 billion, compared with a 2017-2019 average of €104.7 billion.p.8
2. Private equity divestments in Europe fell by one third in 2020 to €23.4 billion, largely due to delayed exits in buyout funds.p.8
3. Over 15 years from 2005 to 2019, French private equity delivered an average annual return of 11.4%, compared to 6.0% for the CAC 40.p.11
4. Funding for French Medical/Pharma/Biotech and Digital/Telecoms companies jumped 37% to €8.49 billion in 2020.p.11
5. Between 2016 and 2020, US biotech IPO capital raised was 53 times higher than Europe's total of $710 million.p.12
6. France faces a structural external current account deficit of 1.6 points of GDP over the 2020-2022 period due to two decades of deindustrialisation.p.6
7. Eliminating France's trade deficit will require creating 1 million productive jobs in high-growth midcaps and SMEs.p.13
8. Reindustrialising France requires tripling private equity investment from approximately €12 billion to at least €36 billion annually.p.14
9. Directing €89 billion of additional private equity funding over 2022-2026 represents 3.90% of French life insurance and savings accounts.p.15