Invest Europe, the association
representing Europe’s private equity, venture capital and infrastructure
sectors, has released Investing in Europe: Private Equity Activity 2025,
its annual report examining performance across the region.
The report provides a comprehensive
breakdown of activity across segments, stages, sectors and geographies. It also
introduces new data on continuation funds and investment in strategic areas
such as defence and deep tech, supported by strong momentum in biotech and life
sciences.
According to the report, fundraising
remained concentrated among fewer, larger funds, with pension funds and
international investors playing an increasingly prominent role. Buyouts
continued to drive activity, while venture investment showed signs of recovery,
exceeding its longer-term average. Across segments, ICT remained the leading
sector, alongside continued momentum in biotech and life sciences.
The report’s findings highlight a
resilient private capital market, with both fundraising and investment reaching
their second-highest levels on record. Private equity and venture capital firms
raised €147 billion in 2025, a 16 per cent increase on 2024 levels and second only to
2022’s record. Buyout funds were the primary driver, accounting for €103
billion, a 33 per cent increase, reflecting renewed demand from global investors
despite ongoing geopolitical and economic uncertainty.
Total investment rose 3 per cent to €135
billion, marking the second-strongest year after 2021. Buyout investment
reached €90 billion, broadly in line with 2024 and 16 per cent above the five-year
average. The mid-market segment accounted for 34 per cent of total buyout value, reflecting
continued capital allocation to SMEs and scaling businesses. Venture capital
investment increased to €20 billion, 20 per cent above the five-year average.
The report also finds that activity
accelerated in the second half of the year as markets stabilised following
earlier uncertainty, with investors refocusing on long-term fundamentals. Exit
value remained solid at €45 billion in 2025, supporting distributions to
limited partners.
Commenting on the findings, Eric de Montgolfier, CEO of Invest Europe, said:
Private equity and venture capital
activity showed great strength in 2025 against a backdrop of geopolitical and
macro uncertainty. Europe provides a predictable and stable environment for
global LPs to deploy their money, as well as being full of dynamic and
high-potential businesses for skilled managers to back and grow.
Overall, the report provides a
detailed breakdown of activity across sectors, stages and geographies, and for
the first time includes data on continuation funds and strategic investment
areas such as defence and deep tech.