The flagship event of the European Private Equity and Venture Capital Industry took place last week in Vienna. It was striking to see how the dialogue is moving on from regulatory implementation to investment, jobs and growth.
Private equity investment has a significant role in the economy. Institutional investors such as pension funds and insurers supply private equity with capital, which private equity managers invest in portfolio companies. The returns from these investments are used by the institutional investors to meet their long-term liabilities which could be an insurance claim or pension.
Since 2007, European private equity has backed in excess of 21,000 portfolio companies, to the tune of more than € 271 billion. The companies range from innovative start-ups needing capital to grow to mid cap businesses looking to take the next step in their development and struggling companies that need help to get back to growth, as well as larger businesses.
The European Private Equity and Venture Capital Association (EVCA) regularly publishes data on private equity fundraising, investment and divestment across industry sectors. It also studies and encourages academic research to show private equity’s economic impact at portfolio company level. The EVCA commissioned Frontier Economics to produce an independent report on the contribution private equity can make to growth. As well as pointing the way for future research, it found that private equity investment boosts innovation, productivity and competitiveness.
The EVCA flagship conference, 'The EVCA Symposium' was billed as the event of the year for private equity’s stakeholders to look beyond day-to-day operations and exchange ideas that will shape the growth path of the industry.
Whilst there is still much to do to absorb and implement the significant swathe of regulation that has featured so prominently in recent years, the mood of the conference was certainly much more focused on investment opportunity and Private Equity's substantial contribution to jobs and growth, especially important at this time given the constrained supply of lending from conventional banking sources.
It looks like 2014 will be a good year for Private Equity investment and for the increased economic and employment activity flowing from it.