European private equity fundraising increased 37% to €74.5 billion ($81.4 billion) in 2016, hitting an eight-year high, said private equity, venture capital and infrastructure association Invest Europe. Pension funds provided 34% of all capital raised by European managers, said an update by the association. Funds of funds contributed 18% and insurance companies added 12% to fundraising. Sovereign wealth funds invested a further 10%, while family offices and private individuals provided 9%. Buyout fundraising increased 70% to €56.3 billion in 2016, driven by larger strategies. Buyout funds that reached between a €250 million and €1 billion target raised about twice as much capital in aggregate as in previous years. While venture capital fundraising increased 16% to €6.4 billion in 2016 from €5.5 billion in 2015, growth capital fundraising fell to €3.9 billion from €4 billion, Invest Europe added. “This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment,” said Michael Collins, CEO at Invest Europe, in a news release. “Over 40% of capital raised by European private equity last year came from investors outside of Europe, while a third of investments made into companies were cross-border,” said Mr. Collins. “Connecting global investors with local fund managers and working with policymakers to facilitate such cross-border flow of capital is an ongoing priority. This is an important source of funding for thousands of European companies.” France and Benelux-based companies received more than a third of private equity investments in 2016. Investments in Southern Europe were 19% of the total, driven by increased investments in Italy and Spain.
European private equity inflows reached an eight-year high in 2016 – increasing 37% to €74.5bn ($81.4bn), according to trade association Invest Europe. Pension funds made up 34% of all capital raised by European managers, while funds of funds accounted for 18% and insurance companies contributed 12%. Meanwhile, buyout fundraising rose 70% to €56.3bn in the year and venture capital fundraising rose 16% in 2016 to €6.4bn, up from €5.5bn the previous year. Invest Europe's CEO Michael Collins said: “This data demonstrates high investor confidence in European private equity in an otherwise low-yield global investment environment.”