The State of European
Private Equity
Executive Summary
Entries — PE deal activity made a comeback in 2024, up 12% year-over-year. Investors are starting to deploy dry powder as overall market conditions improve. Cross-border deal activity from North American investors is rising, up by +3pp in the last 6 years.
Add-ons — Add-on deal activity in Europe is slightly muted compared to previous years (down ~14% yoy). Services was still the largest sector for add-ons (43% of deals), followed by TMT (18%) and Industrials (15%).
Exits — PE exit activity picked up in 2024, up 24% year-over-year. Quarterly data shows a ‘V’ shape recovery in exit volumes. Despite subdued valuations, investors are prioritizing liquidity for LPs, bringing a backlog of delayed exits to the market.
Holding Periods — The median company that exited in 2024 spent 5.7 years in the portfolio, up from 4.7 years in 2020.
Multiples — PE multiples were down a third year in a row. TMT and Science & Health commanded a healthy premium vs. other sectors while the discount for add-on deals narrowed vs. platform multiples.
Growth — Growth for PE-backed assets is coming off cycle highs, down vs. 2022 and 2021. The median PE-backed business grew 12.4% in 2023 vs. 19.5% in 2022 and 17.1% in 2021. Margins expanded slightly from last year.
If you have any questions about the data or the report, do not hesitate to reach out to sid.jain@gain.pro.
Chapter 01: Entries
Overall Trend
PE deal activity made a comeback in 2024, up 12% year-over-year. Investors are starting to deploy dry powder as overall market conditions improve.
After a slow Q1, the pace of PE entries picked up. 2022 was a year of decline, 2023 of stabilization and 2024 of recovery. Looking ahead, we remain bullish about the outlook for private markets in 2025.
By deal type, sponsor-to-sponsor deals made a comeback, with their share rising from 26% of deals in 2023 to 31% in 2024. Family-to-sponsor deals still accounted for the largest share of deals (53% of entries), followed by sponsor-to-sponsor deals (31%), carve-outs (14%) and public-to-private transactions (3%).
Chapter 02: Buy-and-Build
Overall Trend
Add-on deal activity in Europe is slightly muted compared to previous years. Even after estimating for reporting delays and annualizing the data, we expect add-on activity levels to be down ~14% yoy. Services was still the largest sector for add-ons (43% of deals), followed by TMT (18%) and Industrials (15%).
2024 also marks the first year in a long time where add-ons as a percentage of total activity declined. With the narrowing gap between PE platform and add-on multiples, investors focused their attention on acquiring platforms.
Chapter 03: Exits
Overall Trend
PE exit activity picked up in 2024, up 24% year-over-year. After two consecutive years of decline, the market has rebounded. Despite subdued valuations, investors are prioritizing liquidity for LPs bringing a backlog of delayed exits to the market.
Quarterly PE exit activity shows strong momentum. Data shows a ‘V’ shape recovery in exit volumes although the most recent data points to stabilization. Fundraising dynamics, greater availability of credit and improved market sentiment all contributed to the recovery.
Chapter 04: Multiples
Overall
PE multiples were down a third year in a row. Tighter financing conditions and less competition for deals meant PE sponsors no longer needed to pay top dollar. As we look ahead, we expect deal multiples to bottom out as interest rates stabilize and deal activity returns.
Growth remains the #1 factor for an asset's valuation and multiple. Assets that grow faster (>25% revenue CAGR) sell at ~50% premium to those that grow slower (<5% revenue CAGR).
Chapter 05: Portfolio Stats
Revenue Growth
Growth for PE-backed assets is coming off cycle highs, down vs. 2022 and 2021. The median PE-backed business grew 12.4% in 2023 vs. 19.5% in 2022 and 17.1% in 2021. Growth is key to PE value creation and a further weakening could become a worrying factor.
Energy & Materials, TMT and Services are the fastest-growing PE sectors, while Consumer and Industrials lag behind. The Energy sector, particularly assets in renewable and EV distribution plays, have benefited from the record-level of energy prices and regulatory stimuli. TMT and Science & Health, in addition to having strong organic growth, also have above-average buy-and-build activity.
Methodology
The data for this report comes from Gain.pro.
We define PE-backed entries as those in which a PE firm took a minority or majority stake. We define PE-backed exits as those in which a PE firm sold a minority or majority stake. We exclude any VC rounds from our analysis. Both entries and exits exclude aborted deals. Post 2023 data includes live deal count.
We only focused our analysis on assets HQ’d in Europe.
We estimate the deal count for the last 4 quarters based on prior deal history and the percentage of deals that are announced or added post-quarter close.
Our historical data might change as we add and update new deals to the platform.
For metric calculations, we only included assets that had a hand-curated profile on Gain.pro (10+ hours of primary research). Where possible, we have used 2024 metrics. But in cases where numbers are still being reported, we have relied on 2022-23 metrics.
All EBITDA-related aggregates such as EBITDA margin and EV/EBITDA multiples exclude Financial Services from calculations.
