PE-backed SMEs show increased employee numbers

The average 26% increase equates to the creation of more than 140,000 jobs. The increase is measured as the difference between employee numbers at the time of the investment and at the time of exit.

Adveq found the small buyout bracket, backed by funds worth around €500m, to be the best performer in terms of job creation. Portfolio companies in this segment increased their workforce by an average of 33%.

The only private equity segment that shows a drop in the size of the employee base is the turnaround segment. Adveq nonetheless argues that when investing in businesses on the brink of bankruptcy, turnaround players manage to safeguard an average of 87% of staff.

"This clearly shows the benefits of the hands-on approach taken by private equity, which has enabled their portfolio companies to weather the worst of the financial crisis," said Dörte Höppner, secretary general of EVCA, in response to Adveq's findings.

The study included 34 of Adveq's private equity fund managers, accounting for 460 portfolio companies across Europe over a period of eleven years.

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