【安永EY】2024年欧洲私募股权PE市场状况回顾报告_28页_2mb

Summary of the State of Private Equity (PE) Report Europe 2024

Core Content

The State of Private Equity (PE) Report Europe 2024 provides an overview of the European PE market's performance in 2024 and outlines the outlook for 2025. It highlights a resurgence in deal activity after a period of decline, driven by improved financing conditions and increased CEO optimism. However, the report also acknowledges ongoing macroeconomic and geopolitical uncertainties that continue to shape the market.

Key Trends in 2024

• Deal Activity: PE deal activity in Europe increased by 5% in 2024 compared to 2023, marking the first increase since 2021. The UK and Ireland (UK&I) led the growth with a 23% increase in deal activity.
• Sector Composition: The T&T (Technology & Telecommunications) sector remained the largest, accounting for 30% of all deals, while the consumer sector represented 16%. The industrials sector saw a decline, with 112 deals in 2024 compared to 121 in 2023.
• Holding Periods: Median holding periods for PE assets reached 5.7 years, a 21% increase since 2020. This trend is attributed to high inflation, elevated interest rates, and macroeconomic uncertainty.
• Exits: PE exits in Europe rose by 13% in 2024, with a 32% increase in secondary exits and a 67% surge in IPOs. However, the IPO market remains below pre-COVID levels.

Valuation Gap

A valuation gap persists between European and US companies, with European firms commanding lower multiples. This is due to stronger growth prospects and deeper capital markets in the US, as well as higher capital expenditures and R&D spending. The valuation gap is expected to narrow in 2025, which could lead to increased PE exits.

Main Views

• Positive Momentum: Despite challenges, the European PE market has shown renewed momentum, with optimism among CEOs and PE firms.
• Cautious Outlook: The report maintains a cautious outlook for 2025, as the market remains sensitive to macroeconomic and geopolitical shifts.
• Strategic Shifts: PE firms are increasingly focusing on resilient sectors such as digital infrastructure, energy security, and localized manufacturing to navigate a more protectionist environment.

Impact of Trump 2.0 and Geopolitical Developments

• Policy Shifts: Trump's return to the presidency is expected to bring deregulation, lower corporate tax rates, and increased scrutiny of foreign investments, particularly in strategic sectors like semiconductors, biotechnology, and energy.
• Trade Protectionism: The administration may implement higher tariffs and export controls, which could disrupt supply chains and cross-border M&A. This is likely to push PE firms to reshore or nearshore operations.
• Strategic Sectors: PE firms with exposure to strategic sectors (e.g., technology, life sciences, energy) may face increased regulatory pressure, but also new opportunities due to national security concerns and trade rebalancing.
• Global Rebalancing: Geopolitical shifts are expected to lead to new M&A activity as firms seek to optimize investments based on tariff arbitrage and regulatory changes.

Regional Deep Dives

• BeNeLux: The region saw a stable number of deals in 2024, with a notable increase in the second half of the year. Exit processes were postponed due to high interest rates, but a buildup of high-quality assets is expected in 2025.
• Central and Eastern Europe (CEE): PE activity remained stable, with Poland leading the region. Technology and health care were top sectors, while consumer and industrials saw declines. Romania experienced subdued exits due to high borrowing costs.
• DACH (Germany, Austria, Switzerland): The region is expected to face pressures from trade policies and regulatory changes, particularly in export-driven industries.
• France, Iberia, and Others: France and Iberia saw declines in deal activity after reaching record highs in 2021. Other regions like the Nordics, UK&I, and Italy showed varied performance, with the UK&I leading the overall recovery.

Key Considerations for PE Firms

• Agility and Flexibility: PE firms must remain agile in response to rising populist policies, regulatory pressures, and geopolitical uncertainty.
• Portfolio Optimization: Many CEOs are reshaping portfolios and divesting non-core assets to maintain flexibility and long-term performance.
• Exit Strategies: Secondary markets have become a critical exit channel, with transaction volumes reaching US$162b in 2024. PE firms are increasingly using continuation vehicles to extend ownership while returning capital to investors.
• Geopolitical Risk Management: PE firms are advised to stress-test portfolios, monitor regulatory changes, and optimize supply chains in response to transatlantic volatility and trade uncertainty.

Conclusion

The European PE market has shown resilience and rebound in 2024, with a 5% increase in deal activity and a 13% rise in exits. However, the outlook for 2025 remains cautious, with the potential for increased IPO activity and secondary market exits. The Trump 2.0 administration and geopolitical shifts are expected to reshape investment strategies, particularly in strategic sectors and supply chain management. PE firms must adapt to new regulatory environments, optimize portfolios, and focus on resilient assets to navigate the evolving landscape.