Europe's private equity industry surges to raise the most since the crash

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Private equity firm 3i recently bought European opticians group Hans Anders (Source: 3i)

Investment in European private equity funds surged by 37 per cent in 2016 as investors look to lock in higher returns in an improving economy, new data has revealed.

European private equity funds raised the most money last year since the global financial crisis, gathering €74.5bn (£63.2bn) for investment in 2016, according to the data from industry body Invest Europe.

The private equity industry has seen assets under management recover slowly after diving in 2009 amid chaos on financial markets.

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European fundraising peaked at an all-time high of €112bn in 2006 as the industry in illiquid but also high-return investments in private companies boomed.

After the crash European fundraising dipped to only €20bn, with growth in the industry further held back by the Eurozone debt crisis that started in 2011.

However, an improving European economy has seen the appetite for private equity investments increase.

Since the start of 2013 European private equity funds have raised over €240bn, more than twice the amount raised in the preceding four years.

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The consumer goods industry was the biggest target for private equity investors last year, with more than a quarter of funds invested in the sector. The technology sector was the second most popular sector, with a fifth of investment.

Some 17 per cent of funds raised were directed at the UK, while France and the Benelux nations (Belgium, Netherlands and Luxembourg) was the most popular region for investments, accounting for more than a third of the assets raised.

Michael Collins, Invest Europe’s chief executive, said: “This data demonstrates high investor confidence in European private equity, in an otherwise low-yield global investment environment.

“All European economies are now growing and investors value the proven ability of European fund managers to find attractive investment opportunities across sectors and geographies.”