Mid-Market private equity: Europe's engine for growth

Many of the companies that lead the world today in technology, healthcare, business services or consumer goods have their roots in small and medium-sized businesses created in recent years and decades. So, it stands to reason that the global business champions of tomorrow can be found in the Mid-Market today, developing the products and services that will be indispensable to companies and consumers in the future. While varied, what all funds in Europe’s Mid-Market share is private equity’s sharp focus on building better businesses through the application of deep and wide expertise, hands-on operational improvement, and capital investment.

The Mid-Market forms a large part of the private equity ecosystem in Europe. Of all the funds that have had a focus on Europe since 2007, 1,279 fit within the Mid-Market space and of those, 1,044 of these were still active in 2020.

Mid-Market funds, by the numbers:

• 17.01% net IRR return vs. 14.88% for European large and mega buyouts and 7.07% for MSCI Europe (mPME)
• +6.4% 2018-2019 job creation rate vs. +0.9% all European businesses
• €144 billion invested by Mid-Market funds into European companies, 2016-2020
• 3,320 European companies invested into by Mid-Market funds, 2016-2020
• €137 billion raised from 2016-2020 vs. €83 billion 2011-2015
• €223 billion Capital under Management in 2020

The European Mid-Market covers a wide range of businesses across all industry sectors – including fast-growing technology and biotech companies, consumer goods and business services. They also vary in size with equity investments ranging from €15 million-€150 million. However, many general partners also have the capacity – either through their investment strategies or dedicated funds – to invest under €15 million in companies, allowing them to target dynamic businesses in the SME space.

IF you are interested in the Mid-Market private equity theme, feel free to read the full report below.