Q2 Barometer: European private equity hot streak continues

Unquote and Aberdeen Standard Investments
01 August 2018

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European private equity built on a strong start to the year in Q2 2018, reaching the highest quarterly volume on record and the largest average deal value since Q2 2007, according to the latest Unquote Private Equity Barometer, published in association with Aberdeen Standard Investments.

Dealflow gained momentum in Q2 with 543 buyout, expansion and early-stage transactions. Not only was it a solid increase on Q1, but it was the most transactions recorded in a single quarter on comparable records.

The clearest upward trend has been in the buyout space, with expansion and early-stage investments remaining within relatively stable ranges over the last 10 quarters. There were 255 buyout transactions in Q2, which was also a record high. This ongoing momentum is illustrated by the fact that deal numbers have surpassed the 200-mark for five consecutive quarters, a feat not accomplished since the pre-crisis era.

Of the 255 buyouts completed, 119 were in France and the UK, which both experienced especially strong quarters. There was also a substantially higher number of secondary buyouts, while the number of buyouts sourced from private vendors declined slightly, despite the uptick in dealflow. Moreover, it was a record quarter for the mid-cap segment of the market in volume terms with 84 transactions, up from 47 in Q1.

Transaction volume and value both declined marginally in the growth capital space, but remain at elevated levels compared with the last few years. There were 219 investments worth €5bn in Q2, down from 221 investments worth €5.3bn in Q1.

Early-stage deals declined, with 69 in Q2, down from 85 in Q1. However, value bounced back to €893m. The amount of capital invested in early-stage deals has never exceeded a quarterly value of €1bn, but has come close in the past year. Q2's deal value was the 2nd highest in the last 10 years.

Click here to download the full report, including detailed commentary and statistics for the growth capital and venture capital markets, as well as regional breakdowns.